Five Key Pointers For US Firms Looking To Enter the European CBD Market

Stuart McKenzie, Founder and CEO of Reakiro, offers some guidance for North American firms looking to Europe’s CBD markets

WHILE the CBD boom has been well underway in the US for many years things are just starting to take shape in Europe.

Over the last six months the European CBD industry has started to boom, and Forbes reports that serious investors are really starting to take notice.

The CBD market is incredibly lucrative and popular due to the versatility of this product and the multiple audiences it can reach; from gym buffs who work out seven times a week, to those who suffer from issues such as joint pain and insomnia.

Right now, we have reached an inflexion point for established US brands and companies to expand across Europe – where the appetite is big, but the competition has yet to scale. 

However, this is an area of 44 countries, a union of 27 countries which has 24 official languages, and a whole host of individual laws and regulations.

Here are the five things to consider before expanding your CBD brand to Europe:

1. Make sure your language and label requirements are compliant

Labelling products clearly and accurately is a legal requirement when it comes to selling CBD. Not only will the labelling requirements differ slightly from country to country, but you must also take into account the necessary translations, especially for countries in which there is more than one official language, like Belgium and Switzerland.

2. Make sure you have secure Novel Food approval for both United Kingdom and European Union.

The EFSA (European Foods Safety Authority) classifies CBD as a ‘Novel Food’ – which is widely defined as food that was not used for consumption ‘to a significant degree, within the EU, before May 1997’. 

To make things more complicated, in order to sell any product with a ‘Novel Food’ ingredient, you must first obtain approval from both the UK Food Standards Agency and EFSA. 

From March 31, it is expected that the legal framework of the CBD industry and Novel Food approval will become much clearer and it will create a level playing field in the UK. 

Novel food also only applies to ingestible; the rules for topicals, pets, and vaping products vary once again between jurisdictions.

3. Understand the THC and 1 milligram ruling 

The THC content that is legally allowed throughout the European Union can vary from 0.3% to  1%. However discussions are also underway which could see this change to a system based on the number of micrograms per pack. 

And UK authorities are currently considering a shift from a ruling of 1 milligram per pack to a percentage system – as BusinessCann recently reported here.

We recommend brands seek advice through the European Industrial Hemp Association (EIHA) or your local manufacturing partner.

4. Find a trusted compliant manufacturing partner

When looking to Europe there are two main options. The first one is to go it all alone; from seed to sale, growing, extracting, and processing. Pulling this off is highly-commendable and is a way of assuring that you produce a product of the highest quality.

The second option, and by far the quickest, is to find an already established CBD manufacturer who operates in the area and establish a partnership. An example of this would be a company like ourselves. We offer a variety of turnkey services to US companies to help launch their brand in Europe.  

A partnership can also offer invaluable information and expertise about how the CBD industry operates in a local country, as well as valuable tips and solutions on logistics and distribution, which ultimately minimises risk and any operational difficulties. 

5. Do your research on banking solutions 

The final thing to consider before entering the European CBD market-place is your banking solution. 

One running sore for new businesses is discovering that not all banks or financial services accept CBD as a legal source of income. 

This is not to say that it is an illegal source of income, but due to the ever-changing landscape of regulations some banks still struggle with this grey area, and this can hinder processing payments. 

Check with your bank to see if there are any potential issues, if there is, there are plenty of solutions available on the market which you can discuss with your local CBD partner or EIHA. 

Stuart McKenzie, CEO, Reakiro