April 15, 2019

EU Regulation of CBD in Foods and Cosmetics

Advisory
By Evelina J. Norwinski, Raqiyyah Pippins, Lincoln Tsang, Jeremy Willcocks, Adela Williams, Silvia Valverde

There has been tremendous growth in the number of foods and cosmetics on the market that contain cannabidiol (CBD).
According to recent market research studies, Europe's cannabis and CBD markets are set to continue growing
exponentially over the next few years. Regulators in Europe are now taking a closer look at the market for foods and
cosmetics which contain CBD.

In this Advisory, we summarise the current regulatory environment in Europe for foods and cosmetics containing CBD. We
also comment on the fast-changing environment in the US.

Cannabinoids and CBD

Cannabinoids are chemical compounds, found in certain plants or manufactured synthetically, that act on cannabinoid
receptors to produce a range of physiological effects. Two of the most important cannabinoids are tetrahydrocannabinol
(THC), the principal psychoactive compound in cannabis and cannabidiol (CBD) which, in contrast to THC, does not cause a
"high" and, according to a report from the World Health Organisation (WHO)1, does not exhibit effects indicative of abuse or
dependence potential.

THC and CBD are two of some 113 cannabinoids found in cannabis plants, a genus of flowering plants in the family
Cannabaceae. The classification of cannabis species is controversial; Hillig (2005)2 proposed three species of cannabis: C
sativa, C indica, and C ruderalis, whereas other researchers suggest that cannabis plants comprise a single species, C sativa,
with a number of subspecies.3 Cannabis has been cultivated for thousands of years. Certain varieties are grown for their
fibre or edible seeds (hemp and hemp seeds), which contain low levels of THC (0.3% or less), whereas other varieties serve as
sources of marijuana and hashish, and are high in THC (15 - 40%).

The WHO Expert Committee on Drug Dependence recommended on 24 January 2019 to the United Nations that preparations
considered to be pure CBD should not be scheduled within the International Drug Control Conventions. The Committee
proposed adding a footnote to the entry for "cannabis and cannabis resin" in Schedule I of the Single Convention on
Narcotics Drugs of 1961 to specify that CBD preparations are not under international control. 4

This recommendation was due to be considered by the UN Commission on Narcotic Drugs in March 2019 but the vote was
postponed to allow member states more time to discuss the consequences of potential changes in scheduling of cannabis for
national and international control measures. A new date for the vote has not been set yet.

Foods containing CBD

EU Position
Under European Union law, food that has not been consumed to a significant degree by humans in the EU before 15 May
1997, when the first Regulation on novel foods came into force, is considered as "Novel Food" and controlled in a stricter
manner than regular foods under Regulation (EU) 2015/2283 ("the Novel Food Regulation").5

Novel Food can be newly developed, innovative food, food produced using new technologies and production processes, as
well as food which is or has been traditionally eaten outside of the EU. Examples of Novel Food include new sources of
vitamin K (menaquinone) or extracts from existing food (Antarctic Krill oil rich in phospholipids) or agricultural
products from third countries (chia seeds, noni fruit juice).

Food producers can place a Novel Food on the EU market only after the European Commission has processed an application
for the authorisation of the novel food, has adopted an implementing act authorising its placing on the market and
updated the EU list of novel foods. A food or ingredient will be authorised only if it meets the criteria laid out in Article 7,
namely it is shown to be safe, not nutritionally disadvantageous and does not mislead the consumer. There are three routes
by which an apparently novel food may be approved or authorised under the Novel Food Regulation:

1. by showing the food's significant history of use in the EU prior to 1997, through the official consultation procedure
provided for in Article 4 (i.e. that the food or ingredient is not, in fact, a Novel Food); or

2. as a traditional food from a third country in accordance with Article 15, where a history of safe food use for at least 25
years can be demonstrated; or

3. a full application based on submission of a dossier for registration of a Novel Food in accordance with Articles 10-13.

The EU Novel Food Catalogue lists foods and ingredients viewed as novel foods, for which an authorisation should be
obtained. The Catalogue itself, has no legal status, but is frequently used by EU Member States to assist in enforcement of
the Novel Food Regulation.

The cultivation of Cannabis sativa L. varieties is permitted in the EU provided they are registered in the EU's 'Common
Catalogue of Varieties of Agricultural Plant Species' and the tetrahydrocannabinol (THC) content in the plant does not
exceed a concentration of 0.2 %, which in practice means that cultivation of only the hemp variety of Cannabis sativa is
permitted.

The European Commission's Working Group of Novel Foods has recently reclassified CBD as a Novel Food for the purposes of
the EU Novel Food Catalogue. 6 This currently states in relation to Cannabis sativa L:

"[…] Some products derived from the Cannabis sativa plant or plant parts such as seeds, seed oil, hemp seed flour,
defatted hemp seed have a history of consumption in the EU and therefore, are not novel. Other specific national
legislation may restrict the placing on the market of this product as a food or food ingredient in some Member States.
Therefore, it is recommended to check with the national competent authorities".

The entry for cannabinoids now states:

"[...] extracts of Cannabis sativa L. and derived products containing cannabinoids are considered novel foods as a
history of consumption has not been demonstrated. This applies to both the extracts themselves and any products to
which they are added as an ingredient (such as hemp seed oil). This also applies to extracts of other plants containing
cannabinoids. Synthetically obtained cannabinoids are considered as novel".

As a result of this change, the European Commission now regards all extracts of hemp and derived products containing
cannabinoids (including CBD) as novel. Hemp seeds, flour and seed oil remain excluded from the categorisation of Novel
Foods in the Catalogue, as long as cannabinoids have not been added as ingredients. While, as stated above, the Catalogue
has no legal status, in practice it will be given substantial weight by national authorities, who may therefore conclude
that foods containing CBD may be placed on the EU market only once an authorisation under the Novel Foods Regulation
has been obtained. Nevertheless, the current approach to CBD, at Member State level, following the amendment to the
Novel Foods Catalogue, is variable:

the Irish Food Safety Authority considers CBD products based on the manufacturing process applied. CBD oil prepared
through cold-pressing of hemp seeds, may be sold on the basis that this oil contains low levels of CBD. In contrast, CBD
obtained through methods such as supercritical CO2 extraction, would be viewed as Novel Foods for which an
authorisation is required.

other authorities (e.g. those in Belgium and Austria) do not permit CBD products to be marketed.

A novel food application for CBD is currently under consideration with the European Food Safety Authority (EFSA) to
authorise the use of CBD in food supplements for adults with a daily intake of up to 130 mg. This application was made by
Cannabis Pharma s.r.o., a company from the Czech Republic and is based on publicly available safety and toxicological
information and toxicity reviews. The opinion of the EFSA is reportedly expected soon. This decision will be closely
monitored by the industry as it may have wider significance for the CBD food products market.

CBD food products lawfully on the market prior to 1 January 2018 may rely on the transitional provisions of the Novel Foods
Regulation. As long as an application for an authorisation is filed before 2 January 2020, the product can continue to be
marketed until an authorisation decision has been taken by the Commission.

Claims
The status of foods containing CBD also determines the claims that may be made when they are marketed. If such products
qualify as foods or food supplements, only specific health or nutrition claims authorised in the EU Register in accordance
with Regulation (EC) No 1924/2006 may be made. Any CBD product taken for a medical purpose and associated with
medical claims must be authorised as medicinal products.

UK position
Following the change in the EU Novel Foods Catalogue, the UK Food Standards Agency (FSA) revised its guidance on CBD:

"The FSA accepts the clarification from the EU that CBD extracts are considered novel foods. We are committed to
finding a proportionate way forward by working with local authorities, businesses and consumers to clarify how to
achieve compliance in the marketplace in a proportionate manner".

In the meantime, the CBD industry groups have criticised the handling of the situation by the FSA. On 26 March 2019,
CannaPro, a UK trade association, wrote to the FSA asserting its members' rights for compensation for associated losses due
to the "misclassification" of their products as novel foods.

CBD in cosmetics
EU position
Regulation (EU) No 1223/2009 (the Cosmetics Regulation) defines a cosmetic product as any substance or mixture
intended to be placed in contact with external parts of the human body for the purposes of cleaning, perfuming, changing
its appearance, protecting, keeping in good condition or correcting body odours.7

Article 3 of the Cosmetics Regulation states that any cosmetic product made available on the market shall be safe for
human health when used under normal or reasonably foreseeable conditions of use. Annex I contains the requirement for
a cosmetic product safety report.

Annex II8, lists the substances that are prohibited from use in cosmetics. This list includes any substance referred to in
Tables I and II of the Single Convention on Narcotic Drugs of 1961 (the Single Convention) 9 , which includes cannabis.10
However, the Single Convention uses a narrow definition of Cannabis limited to "the flowering or fruiting tops of the
cannabis plant" and excludes the seeds and leaves of the plant when not accompanied by the tops.11

It follows that from an EU law perspective, CBD may be used in cosmetics placed on the EU market when obtained from
cannabis, cannabis resin, cannabis extracts and cannabis tinctures originating from the seeds and leaves that are not
accompanied with the fruiting tops of the cannabis plant. In any case, the general legal requirements for cosmetic
products, including those relating to safety are applicable.

UK position
The Cosmetics Regulation is directly applicable in the UK and therefore, CBD may be used in cosmetics placed on the UK
market provided they are obtained from cannabis, cannabis resin, cannabis extracts and cannabis tinctures originating
from the seeds and leaves that are not accompanied with the fruiting tops of the cannabis plant.

Cosmetics operators may contact one of the safety assessors available from the UK industry body Cosmetic, Toiletry and
Perfumery Association (CTPA) to comply with the safety assessment requirements imposed under Annex I of the Cosmetics
Regulations. The Regulation also requires manufacturers to notify the European Commission directly of every cosmetic
product placed on the market, using the Cosmetic Product Notification Portal (CPNP).

In 2013, the UK Government introduced the Cosmetic Products Enforcement Regulations 2013 to create new enforcement
powers, offences and penalties for breaches of the Cosmetics Regulation.

US position
The US Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) have recently taken action in
relation to companies selling CBD products in the US.

On 28 March 2019, the agencies sent warnings letters to three companies they believe advertised products in a way that
may be in violation of the Federal Food, Drug and Cosmetic Act as well as the Federal Trade Commission Act. We recently
reported on the US Agencies, states and local governments responses to the congressional legalisation of CBD or Hemp (see
our Advisory here).

While FDA maintains its position that CBD is not appropriate for use in conventional food or dietary supplements, the
FDA's departing commissioner Scott Gottlieb M.D. recently stated that the FDA was using its enforcement discretion with
respects to certain products containing CBD. The FDA has said it will take enforcement action against CBD products that
are on the market if manufacturers are making "over-the-line" claims about products. Some examples that the FDA have
given of these types of claims include:

"CBD successfully stopped cancer cells in multiple different cervical cancer varieties."

"CBD also decreased human glioma cell growth and invasion, thus suggesting a possible role of CBD as an antitumor
agent."

"For Alzheimer's patients, CBD is one treatment option that is slowing the progression of that disease."

On 2 April 2019, the FDA announced that in light of the growing interest in the development of therapies and other FDA
regulated consumer products derived from cannabis and its components including CBD, it would be taking "new steps and
actions to advance our consideration of a framework for the lawful marketing of appropriate cannabis and cannabis
derived products". These steps include:

A public hearing on 31 May 2019, as well as a broader opportunity for written public comment, for stakeholders to share
their experiences and challenges with these products, including information and views related to product safety.
Requests to make oral presentation and comments at the hearing should be submitted by 10 May 2019. Electronic or
written comments can be submitted prior to 2 July 2019.

the formation of a high-level internal agency working group to explore potential pathways for dietary supplements
and/or conventional foods containing CBD to be lawfully marketed; including a consideration of what statutory or
regulatory changes might be needed and what the impact of such marketing would be on the public health. This group
will be co-chaired by Principal Deputy Commissioner Amy Abernethy, M.D., Ph.D. and Principal Associate
Commissioner for Policy Lowell Schiller. The working group plans to begin sharing information and/or findings with
the public as early as Summer 2019.

updates to the FDA webpage with answers to frequently asked questions on this topic to help the public understand how
the FDA's requirements apply to these products.

the issuance of multiple warning letters to companies marketing CBD products with egregious and unfounded claims
that are aimed at vulnerable populations (see examples listed above).

Summary
Regulators and competent authorities in Europe and the US are taking a closer look at the market for food and cosmetic
products which contain CBD and are gearing up to bring enforcement action against companies selling CBD products that
make "over the line" claims. European regulators are a few steps behind the US and have yet to take the same proactive
steps, but the recent reclassification of CBD as a Novel Food suggests they might be gearing up to follow suit.

© Arnold & Porter Kaye Scholer LLP 2019 All Rights Reserved. This Advisory is intended to be a general summary of the
law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a
specific fact situation.

1Cannabidiol (CBD) Pre-review Report. World Health Organisation Expert Committee on Drug Dependence. Thirty Ninth
Meeting, Geneva 6-10 November 2017.

2Hillig KW. Genetic Evidence for Speciation in Cannabis (Cannabaceae). Genetic Resources and Crop Evolution 2005;
52(2): 161-180
3 de Meijer EPM. The Chemical Phenotypes (Chemotypes) of Cannabis. In: Pertwee RG, Ed. Handbook of Cannabis.
Handbooks in Psychopharmacology: Oxford University Press; 2014: 89–110.

4"Preparations containing predominantly cannabidiol and not more than 0.2 percent of delta-9-tetrahydrocannabinol are
not under international control" footnote to the entry for cannabis and cannabis resin in Schedule I of the Single
Convention on Narcotic Drugs (1961) recommended by WHO ECDD on 24 January 2019.

5As of 1 January 2018, the new Regulation (EU) 2015/2283 on novel foods (the Novel Food Regulation) is applicable. It
repeals and replaces Regulation (EC) No 258/97 and Regulation (EC) No 1852/2001 which were in force until 31 December
2017.

6 http://ec.europa.eu/food/safety/novel_food/catalogue/search/public/index.cfm

7Regulation (EU) No 1223/2009, Article 2(1)(a) defines cosmetics as "any substance or mixture intended to be placed in
contact with the external parts of the human body (epidermis, hair system, nails, lips and external genital organs) or with
the teeth and the mucous membranes of the oral cavity with a view exclusively or mainly to cleaning them, perfuming
them, changing their appearance, protecting them, keeping them in good condition or correcting body odours"

8 Regulation (EU) No 1223/2009

9 "Narcotics, natural and synthetic: All substances listed in Tables I and II of the Single Convention on narcotic drugs
signed in New York on 30 March 1961."

10 Single Convention on Narcotic Drugs, Schedule 1 "Cannabis, cannabis resin, cannabis extracts and cannabis tinctures"

11"Cannabis" means the flowering or fruiting tops of the cannabis plant (excluding the seeds and leaves when not
accompanied by the tops) from which the resin has not been extracted, by whatever name they may be designated.

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