CBD producers faced with being told to cease trading in the coming days are weighing up their options.
Wednesday 31 March marks the deadline for applications to the Food Standards Agency (FSA) under the new novel foods approach to CBD products.
Businesses were told to apply for novel food status to keep trading under the new rules in mid-February after the UK adopted Europe’s categorisation of CBD in its post-Brexit regulations.
Successful companies will be added to a public register and allowed to keep trading in the UK.
The tight turnaround to turn over extensive data to the FSA has put companies under significant strain but another problem is looming: There is no established appeals process for companies denied validation.
Companies which are unsuccessful and have to cease trading in the UK immediately under criminal law do not have a formal avenue to challenge the decision.
In circumstances where a validation is withheld and the FSA declines an informal request to reconsider a decision, the only avenue available to CBD companies will be a costly legal one.
Robert Jappie, partner at legal firm Ince and expert in cannabis regulations, told Cannabis Health the lack of route for redress was certain to be an issue over the coming weeks and months.
He said: “The fact there’s no appeals process suddenly means getting on the public list is the difference between having a trading businesses and not having one at all.
“You would expect there to be clear guidelines detailing what the FSA expects to see for validation, there should be very detailed information.
“That would negate the need for an appeals process but we’re seeing information sent out two or three weeks before the deadline and some companies just don’t have the time to prepare.”
“You get the impression this has not been very well thought through. It seems to be reactive rather than proactive.”
Despite the deadline being on 1 April, the register will not be available until ‘later in April’ according to the FSA. A spokesperson for the agency was unable to provide a precise publication date to Cannabis Health.
On 29 March, Jappie addressed more than 200 CBD industry figures online alongside trading standards barrister Jonathan Kirk QC at an online event organised by major CBD marketplace Alphagreen.
A leading expert on consumer law, Kirk has represented several major retailers in cases against regulators – and he believes the novel foods issue could yet end up in court.
If informal mediation with the FSA fails, companies denied novel food status face the prospect of launching a judicial review, a costly and time-consuming process.
Jappie said: “[Kirk] was very clear that if you do no get validation you are talking about weeks and weeks of preparation so if a company is worried they should be taking action now.”
A group action undertaken by CBD companies against the FSA remains a likely avenue if several validations are refused, although Kirk speculated the threat of litigation may be enough to induce concessions from the regulator.
An FSA spokesperson said novel foods system ‘is an established process’ that has been used successfully in other sectors.
They added that the ‘onus is on applicants to produce a good quality applications’, pointing to assistance offered to the CBD industry in recent months.
The spokesperson added: “While there is no appeal system built into the legislation, our risk assessment process includes an independent science committee and we consult on the applications so the process is open and transparent.”