CBD: Medicine, Food, Cosmetic, E-liquid? A risk-based approach to regulation
CBD-based products are stretching existing regulations and highlighting the inconsistencies and overlaps in how product classes are defined. A non-psychoactive cannabinoid promising a wide array of health and wellness benefits, CBD can be a medicine, a food supplement, an e-cigarette liquid, a cosmetic ingredient and even a pillow spray.
This begs the key question: who should be regulating a substance with so many facets? One single market has never seemed so divided, and a clear, thoroughly informed regulatory strategy is critical for the successful placement of new cannabinoid-based products. Whether sought for medical purposes, or as an attractive addition to common foods, drinks and consumer products, the interest from consumers is growing, while regulators are increasingly uneasy and uncoordinated across different jurisdictions.
The regulatory landscape for CBD in the United States is relatively straightforward. The Agriculture Improvement Act of 2018 legalised hemp-derived CBD, and all its applications are subject to regulation by the Food and Drug Administration. Medical products are expected to follow the standard pre-market authorisation procedure, while CBD-based food, cosmetic and other consumer products are typically allowed in the market as long as they are generally regarded as safe, not misbranded, and without drug claims. The safety of e-liquids, in particular, has recently been attracting intense media attention and as such the FDA opinion may be expected to evolve on this issue.
The handling of CBD at European level is an entirely different story. Cultivation of hemp containing less than 0.2% of tetrahydrocannabinol (THC) for food and industrial purposes is indirectly permitted under the Common Agricultural Policy (CAP), and Member States may issue licences for cultivation and processing of higher THC-containing varieties for medical or extraction purposes. As an extract, CBD encounters much divided opinion across Europe: horizontally, different laws and regulatory bodies come to play for each type of end-product that incorporates CBD, while vertically there is also an irregular distribution of responsibilities and remits from central European authorities down to Member State bodies.
Horizontal Differentiation: A problem of definition
The source of horizontal complexity is a problem of definitions. Laws protecting consumers from the risks associated with products in the market are specific to product categories, such as the Medicinal Products for Human Use Directive, Novel Food Regulations or Tobacco Products Directive. In this sort of regulatory system where individual laws define their product scope, the market is sectioned in a way that causes a broad variety of products to fit within relatively narrow definitions.
This categorisation is well suited to conventional products, but struggles to remain relevant in front of all-encompassing products such as those based on CBD. An interesting example of this is one of a full spectrum 5% CBD oil product sold at a major German retailer. The manufacturer, Nutree, published its regulatory journey on its website without missing on some sarcastic humour. The product was initially marketed as a dietary supplement for oral consumption, but it was soon challenged by the German Novel Food Regulation authority, BVL. The company acted promptly to re-label the product as a cosmetic for external use only in order to remain on the shelves. Eventually, the manufacturer was pushed re-label the oil a third time and recommend it only for "drizzling on pillow", yet hinting to the fact that in Switzerland people may even consume it orally. Through this strategy, Nutree circumvented both the Novel Foods and Cosmetics regulations and their product fell under the category of a general consumer product. After being kept on hold for a year, Nutree 5% CBD oil is back on sale at Rossman retailer as of August 2019. As much as this may be a smart product strategy, it shows how little sense the system makes for CBD products, and how strict control procedures can lose relevance simply through creative wording and labelling.
Areas of overlap or gaps left uncovered by legal product definitions also damage trust in the authorities and consumer safety. While regulators are busy debating whose remit it is to regulate a borderline product, companies waste resources in constantly reassessing their regulatory strategy, and products are pushed on the market irrespective of the laws.
Vertical Inconsistency: A fragmented system
Another side of the problem is the irregular distribution of responsibilities between authorities at European and Member State levels, across the vertical of each product category.
Each category's law, whether a European Directive or a Regulation, identifies a European Agency (e.g. EMA, EFSA, or the European Commission) and national Competent Authorities across the Community. It also identifies their respective duties for product approval/registration (where required) and for law enforcement.
In the case of medicines, pre-market approval and post-market reporting may be carried out by a national competent authority - in the UK, this would be the Medicines and Healthcare products Regulatory Agency (MHRA), who is also responsible for issuing manufacturer registration, GMP certificates, and for implementing post-market surveillance. Tobacco and related products as well as general consumer product safety are also managed fully at Member state level, while regulated by means of a European Directive, a legal tool which sets terms that are agreed across the Community, on which base Member states are expected to implement their own laws. In sectors regulated by Directives, we typically see more variability in legal requirements and procedures from country to country.
Other sectors are regulated by means of European Regulations, which directly transpose into the national law of all Member States. This legal device typically allocates centralised management of certain tasks and ensures homogeneous legal requirements and procedures in all Member States. Nevertheless, differences may still exist in practice, especially in the attitude towards enforcement. Novel food products are an example of this, where applications are handled centrally by European Food Safety Authority (EFSA), and enforcement of the law is delegated to national authorities, with some countries actively prosecuting unapproved products and others closing their eyes to them. A similar system applies to medicines via the centralised procedure, where marketing authorisation is issued by the European Medicines Agency (EMA) but most other responsibilities are down to the national competent authority. Cosmetics too require a central registration but leave law enforcement to individual countries.
This complex system of Regulations and Directives with sector-specific arrangements and individual national authorities tasked with enforcement, creates a very challenging environment for businesses. Taking the EU5 countries, United Kingdom, Germany, France, Italy and Spain, as an example across five different product category sectors, there are eighteen different national Competent Authorities for businesses to liaise with, showing very little consistency and coordination.
A Risk-Based Solution
Ultimately, the mandate of authorities is to protect consumers from the risks associated with products placed on the market. Getting lost in the nuances of definitions and in a network of delocalised responsibilities doesn’t deliver any value or safety to consumers, and only feeds a sense of distrust and inefficiency towards regulators. Definitions will never be all-encompassing, and no matter how good and comprehensive they are designed to be, new products will come sooner or later to challenge their validity. CBD highlights the inadequacy of a system that may be due to review. But what could be a solution?
The FDA is taking strong steps to modernise its regulation and it is increasingly adopting a risk-based approach across its operations. By lowering the regulatory burden on low-risk products, they are liberating resources to focus on those products that carry the biggest unknowns, irrespective of the product category. Similar efforts could be adopted in Europe too, with the aim of harmonising the legal requirements both horizontally across sectors, and vertically from European to state level.
A similar solution is proposed by the European Industrial Hemp Association (EIHA), with a three-tier system for regulating CBD-based products based on dose. "At high doses, CBD can be a medicinal product and should be regulated as such. At physiological doses CBD should be regarded as an OTC-product (= over the counter) or a food supplement."
This approach may be seen as simplistic until more clinical evidence on the effects at different doses is gathered. Yet, at that point, it would allow reducing the overall number of relevant national authorities discussed above from eighteen to ten across EU5, resolve the debate over who and how, and allow a fair level of scrutiny on products based on dose and concentrations rather than on wording. Having fewer authorities focused on risk across consumer product classes doesn’t mean looser controls. Quite the opposite, it would facilitate coordinated and effective action on the newest and least understood products regardless of their application.
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