The first of what it assures will be just two updates to the list, with the second and final update due on June 30th, exposed more issues in how the process has been handled so far, leading to criticism from the wider CBD industry.
Though the FSA publicly apologised to the brands which were left off the list on March 31st due to an unspecified ‘clerical error’, those temporarily omitted have seen their businesses impacted in the interim.
While mistakes can (arguably) be expected when regulating a never before regulated market, the FSA’s ‘muddled’ handling of the process has had a wider impact on the CBD industry and the UK economy.
The update, made public on Wednesday April 27, saw over 1700 new products added to the list which the FSA says ‘required further evidence’, but had submitted applications before its March 31 deadline.
A further 700 products were added ‘to correct a clerical error’. When asked to give details on this error, the FSA told BusinessCann: “We have apologised for the small number of omissions from the original list that were the result of clerical errors. These products have now been added.”
Additions included brands stocked in major retailers across the UK like Vita Coco, Leaf Life, Kiki, Pollen and CBDfx, all of which faced seeing their products pulled from both physical and online retailers’ stores in the interim while incurring significant reputational damage.
The FSA’s decision to call for products not featured on the list to be pulled from shelves, despite the list not being final by its own admission, has been at the core of the industry backlash against its process.
CBDfx’s Managing Director Carlo Buckley said in a LinkedIn post that after ‘inexplicably’ being left off the list on March 31, he received confirmation from the FSA his products would be added to the list on April 4, before finally being added last week.
During the interim period, Mr Buckley says he was left to ‘reassure stakeholders’ they would be added soon, seeing one major retailer remove the brand from sale ‘costing us tens of thousands of pounds in lost revenues’.
Sian Phillips, Executive Director of the Cannabis Trades Assocation (CTA) said: “The list isn’t definitive, and it was very wrong of (FSA CEO) Emily Miles to say if you’re not on the list, you’re not on the shelf.”
BusinessCann asked the FSA if it had put any measures in place to protect the commercial interests of the companies whose products were omitted from the list between March 31 and April 27, it said: “Local authorities and retailers can contact the FSA if they need to verify the status of products not currently on the public list.
“Where a company was sent confirmation that they were part of the update they could share that with retailers as proof they would be added to the list.”
As to why it chose to call for the removal of products not included on the list while it was incomplete, a spokesperson told us: “Our announcement on 31 March that the CBD public list should be used to help prioritise efforts to enforce the novel food regulations prompted a number of companies to come forward with new evidence linking large numbers of individual products to applications.
“This was an unexpected development as this product information should have been provided to us much earlier in the process.
“Therefore, to support businesses to achieve compliance for their products, we have made one final call for evidence from businesses to link their products to credible applications.
“If local authorities and retailers are unclear about the status of products not currently on the public list, they can contact us for clarification.”
Aside from the impact on companies directly involved in the application process, the regulation has had a major effect on the wider UK cannabis industry and economy.
While acknowledging that the industry needs to be regulated, Ms Phillips said the process has wiped out many small independent CBD businesses.
She explained that the novel foods had seen the CTA lose around 40% of its members, with many smaller members simply not being able to afford the thousands of pounds it costs to go through the application process.
“I have a small business. I’ve pulled the CBD I had off the shelf. It’s affected my business… the only option for small businesses now is to sell other people’s products.”
On Friday April 22, Cellular Goods confirmed to investors that it had been forced to remove its ingestible products from sale by Trading Standards, seeing the company’s stock dive a further 12%.
This followed weeks of confusion as to whether Cellular Goods products could remain on the market, after it found that its products were not included on the 31 March list.
The CBD brand argued that as its “ingestible products are identical to products which are entitled to remain on the market”, namely Chanelle McCoy’s Pureis products.
However, the FSA argued that they’d received no evidence that Cellular Goods’ products, identical to Pureis or not, were on the market before the 12 February 2020 cut-off date.
This means that any companies who have put their own brand on any of the nearly 6000 products on the public list after February 2020 will not be allowed to remain on sale.
In a statement released last week, the Association for the Cannabinoid Industry (ACI) said the ‘decision by Trading Standards to intervene with regard to Cellular Goods was a signal that there will be a zero tolerance of new branded products launched after the FSA cut-off date of 12 February 2020’.
Not only does this position provide no clear consumer safety benefit, but Ms Phillips argues that ‘it is killing an industry of white labellers’.
“At the end of the day if it’s a closed bottle and I put my label on it, it’s the same stuff inside.”
The FSA clarified its position to BusinessCann: “From the date of our application deadline announcement (13 February 2020), no new CBD extracts, isolates or associated final products using the novel ingredient, including new brands, should be put on the market until they have the necessary authorisation.
“A validated application is not sufficient to put new products on the market. If the secondary product was on sale before our announcement date, and it matches the other required criteria for the public list, then it can continue to be sold. When an application is authorised, the product may be sub-licenced and rebranded.”