In 1961, the Single Convention of Narcotic Drugs gave the cannabis plant a definition that classified it as a narcotic. CBD, or cannabidiol, is one of 113 known cannabinoid extracts from the cannabis plant. CBD has many therapeutic uses, such as pain and anxiety reduction. In recognition of its medicinal uses, the European Food Safety Authority (EFSA) classified CBD in Europe as a non-narcotic “novel food” in 2019. In this context, “novel” simply meaning it was not commonly consumed in most households prior to May 1997. This means that CBD, so long as it contains less then 0.2% THC (the active psychotropic ingredient in cannabis) and is approved by the governing nation, can be freely traded as a market good in many EU member countries. The codification of CBD as a novel food has been part of an attempt to increase regulation and ensure quality in production, because a largely unregulated market meant that many CBD products of questionable quality were available for sale online.
However, there are still a few countries that maintain outright bans on CBD products because they are derived from the cannabis plant, countries with typically conservative leaning social ideologies, like Slovakia and Moldova. Some countries like Malta also fall into a legal gray area, where CBD is technically only available with a prescription but many pharmacies sell it over the counter and local enforcement agencies tend to look the other way. On the opposite end of the spectrum, though, are the countries anticipating full legalization, such as Luxembourg. It is holped that these countries will cause a domino effect in the EU similar to the one seen in Canada and the US. A recent report by the Centre for Medical Cannabis estimated that between 8-11% of UK adults have tried CBD, which is approximately 4-6 million people. The CBD market size is also estimated to grow to 1.5 billion dollars by 2025. As the demand for CBD has steadily increased in recent years, growing to the second largest in the world behind North America, the market has been largely unregulated.
While the CBD market is poised for exponential growth, there are a few stumbling blocks in the way, namely the social stigma attached to cannabis and the lack of regulation. Not only has the scheduling of cannabis as a narcotic engendered decades of imputation surrounding its use, medicinal or otherwise, it has also caused some investors to hesitate when investing time and money into hemp byproducts. Investors fear the association of their brand with a product that is still considered a byproduct of an illicit substance, and little to no regulation introduces the possibility of unknowingly investing in a less than quality good.
When it comes to addressing these issues, education and increased regulation are key to increasing interest in CBD. People generally are unaware of the difference between hemp and marijuana, and of the benefits of CBD products. Hemp and marijuana are both cannabis plants, however hemp is any plant with a THC content lower than .2%. CBD is therefore a hemp byproduct, as it is legally required to contain less than 0.2% THC content. When it comes to the purported benefits of CBD, there are many. Most famously it has recently been found to aid in some seizure disorders that don’t typically respond to medication, such as Dravet Syndrome and Lennox-Gastaut Syndrome. Several studies have shown that the number of seizures was greatly reduced, or even stopped altogether. Additionally, CBD offers aid for anxiety, insomnia, and chronic pain. Increased regulation will also help mend the public perception of CBD as questionable and possibly illicit, as it will ensure that products are safe and similar to any regulated and taxable good, such as alcohol. Stricter laws will also help investors feel more comfortable with the quality of product that they are putting money into, further boosting market growth.
Overall, the European CBD market is extremely promising. Hopefully through increased regulation, education, and exposure a new era for cannabis in Europe can be ushered in, possibly paving the way for eventual total legalization. Contact us for a consult if you have questions about the business opportunities for CBD in Europe.