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Report explores cannabis regulations of North America and Europe

Analytics firm specialising in the global cannabis industry, New Frontier Data, has released a first-of-its-kind report examining cannabis regulations in North America and Europe.

The New Frontier Data report, 2021 Cannabis Regulatory Landscape: Emerging Trends in North America & Europe, produced in collaboration with SōRSE Technology, reveals emerging trends and compares the evolving regulations of two of the fastest-growing cannabis and CBD markets across the globe.

It highlights that years of prohibition and an international illicit market have presented distinct challenges for establishing, standardising and regulating legal markets, and that as the industry matures, contradictory regulations will impact the global market’s trajectory.

CBD booms across the UK and Europe

Since the introduction of CBD products into the UK market in 2018, the products have proven popular with consumers in the country. The report reveals that the majority of consumers say CBD has a positive effect on their quality of life – using CBD to unwind, for medical treatment, pain management and general wellness.

However, in the largely unregulated UK marketplace, consumers cited the quality of products as one of their primary concerns.

The report discusses the impact of the classification of CBD as a Novel Food in the UK in 2019, and notes that, at the same time, the CBD market was relatively nascent in Europe. Despite this, it reveals that total spending on CBD surpassed expectations in both Germany, at €1.83bn, and in the UK, at €1.71bn. 

The report states that: “Inconsistent regulations have allowed a patchwork landscape for CBD products to spread across Europe.” And that “Differences in respective countries’ allowable THC-levels require producers seeking region-wide distribution to either customise formulations accordingly or to develop products compliant with the most stringent regulations. Such inconsistencies will likely continue to vex suppliers and marketers of CBD products for years to come.”

Regulations in North America

In North America, the report highlights that, given the current state of the federal prohibition of cannabis, the industry is broadly excluded from quality requirement regulatory frameworks, “resulting in a dearth of consistent regulatory guidance and a practical inability to participate in all the respective government-backed certification programmes.”

It explores the impact of the US Food and Drug Administration (FDA), the 2018 Farm Bill, and the role of the Alcohol and Tobacco Tax and Trade Bureau (TTB) on the market, noting that, as a result of the industry’s broad exclusion from the government’s certification criteria, it has been working to create its own standards for product quality and purity. 

The report also highlights the challenges posed by the introduction of the cannabinoid Delta-8 THC, which is “filling a void within a regulatory loophole”, suggesting that Delta-8 is likely to be classified as an analogue of Delta-9 THC – which will ultimately limit opportunities and increase barriers to entry to the market.

Key takeaways

Key takeaways from the report include conflict between regulators and consumers, potency caps as an ongoing issue, federal legalisation remaining elusive, continued scepticism from the international community, complex regulations and that industry self-regulation will set the standards for future guidelines. 

Giadha DeCarcer, founder, publisher and executive chair at New Frontier Data, highlights that the market’s regulatory framework has failed to experience much-needed maturation and remains fragmented and nuanced across national and state borders. 

DeCarcer said: “As our team of researchers and analysts have endeavoured to understand why regulations are evolving as they are, a particular finding emerged as quite telling, and that is that cannabis consumer sentiment and behaviour are ‘the’ consistent driving force behind regulatory evolution, maturation, and hopefully soon, standardisation on a regional, if not global, scale.

“…we found that cannabis consumers are in fact now demanding quality standards that align with more mature consumer good sectors, and as such, are bringing attention to emerging opportunities across compliance, lab testing, packaging, labelling and other ancillary verticals needed to support higher and more standardised regulation.”

To read the report in detail please visit https://info.newfrontierdata.com/2021-cannabis-regulatory-landscape. 

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