In light of the UK’s CBD novel foods deadline and recent changes to CBD EU regulation, such as the addition of CBD cosmetics, Medical cannabidiol has taken a bit of a back seat. With all of the stigma and misinformation surrounding cannabis, particularly its medical applications, the future of medical CBD in Europe has begun to fog over. Fortunately, there may not only be hope for investors looking to enter the European CBD market; there may also be significant opportunity.
The State of the European CBD Market
As the European Union tightens its focus on the COVID-19 vaccine rollout, other developments such as the medical applications of CBD have been made a lower priority. But just because medical CBD is not currently at the forefront of the healthcare industry does not rule it out as a worthwhile investment, particularly in the long-term.
In 2020, according to Grand View Research, Europe had only the fourth largest CBD market of any region. Sitting behind North America, Asia Pacific, and Latin America, Europe has been a victim of its own CBD EU regulations. Unable to muster the universal approval of the European Commission, cannabidiol and its variants have failed to be included on the EU’s Novel Food Ledger. While this may seem like a disadvantage, it may, in fact, be an opportunity.
Prior to the pandemic, the unregulated UK CBD market was valued at about $373 million. In the same report, 59% of survey respondents were found to be in support of CBD regulation. What makes medical CBD particularly unique is its inherent regulatory systems. While products like CBD oils, edibles, drinks, food, etc., must rely on a new form of CBD regulations, medical CBD can leverage the existing measures currently used by drug agencies and healthcare providers. This eliminates the need to wait for CBD’s Novel Food status to become more favourable for investors and distributors. As a result, medical CBD, out of the various cannabidiol market segments, may have the greatest financial opportunity over traditional forms of CBD.
Why Medical CBD Has An Advantage Over Other CBD Applications
In 2018, Epidiolex became the first FDA-approved drug to contain a marijuana derivative (CBD) as an active ingredient. Its success in the treatment of rare and severe forms of epilepsy has been a huge step forward for medical CBD in Europe and beyond. It illustrates that CBD, when properly extracted and manufactured, can be safely used for therapeutic purposes.
Investors looking to enter the European CBD market are often dissuaded by the ‘lack’ of medical evidence surrounding cannabidiol and its safety profile. Most investors interpret this as there being a lack of supporting evidence. But that isn’t completely accurate. When agencies like the FSA (Food Standards Agency) issue recommended CBD consumption limits of 70mg per day, it is often from a place of precaution as opposed to one of information. In the original press release for the UK’s CBD novel foods deadline, the chair of the Committee on Toxicity (COT) is cited as saying: “We don’t know enough to be sure about such a risk, but I am pleased with the sensible and pragmatic approach the FSA is taking.”
Essentially, due to the lack of mainstream medical testing, the FSA has decided to provide a recommended consumption limit out of an abundance of caution. Why this is an interesting case study is that it highlights the opportunities that medical CBD has over novel food applications.
Scrutiny Can Be A Good Thing
Medical CBD, unlike CBD oils or tinctures, already has a strict regulation process if it’s being used and promoted by medical professionals. The FDA, for example, has one of the most rigorous screening procedures in the world when it comes to the sale and prescription of medical drugs. According to the FDA website, all drug companies that are looking to sell their drug in the United States must first test it and provide the results to the CDER (Center for Drug Evaluation and Research). From there, a team of CDER scientists, including physicians, statisticians, chemists, and pharmacologists, must objectively review and evaluate the data, proposed labelling, and test results. Once it has been established that its benefits outweigh its risks, the drug can then be approved for sale with the presentation of a doctor’s prescription. In outlining the FDA’s meticulous drug approval process, one can better identify the value of Epidiolex and medical CBD.
With medical CBD, rather than being victim to a government’s validation process (or lack thereof) where legal ambiguity is abundant, distributors and manufacturers can instead have their products legally sold and produced with little to no obstacles. Similarly, once a drug has been approved by one drug administration, it is much easier to seek approval of sale elsewhere. The same, however, cannot be said for other CBD applications such as edibles and tinctures.
Remaining Obstacles for Medical CBD
Health Europa recently published an interview with Medical Cannabis Europe’s Secretary-General and Deputy Secretary discussing the role of medical cannabis and CBD in the greater European cannabis industry. During this interview, Secretary-General Stuart Lambie was asked about 2020’s late successes for the cannabis industry in terms of relaxed CBD regulations, citing the UN’s reclassification of cannabis and the Court of Justice of the EU’s ruling that CBD is not a narcotic. Lambie noted that this “opens the door” for regulators to talk more seriously about the issue of cannabis as a medical product and not a recreational drug. CBD, for instance, in Lambie’s opinion, is easier for regulators to discuss due to the lack of psychotropic effects and attached wellness labels. For this reason, medical CBD may be one of the most lucrative avenues for investors looking to take advantage of the rapidly growing industry.
One of the best ways to start investing in CBD is on the supply side. Wholesale CBD manufacturers like CanX provide their clients with high-quality CBD products and reliable delivery. To learn more about how CanX’s vertical integration and investment opportunities, contact our team for more information.