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european union states

International Supply Chains: Considerations for European Imports

By Marguerite Arnold
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european union states

The recent decision in Germany on the reclassification of CBD (kudos to the European Industrial Hemp Association) as something other than “novel” has now opened an interesting new discussion in Germany and by extension, Europe.

It basically means that hemp plants, if they are European in origin, can be grown (under the right regulatory structure starting with organic) and even extracted without ever being considered a “novel food.”

Look for (hopefully) similar discussions now across Europe and the UK where the Food Safety Authority is also examining similar policies.

What this ultimately means, however, is that the market is clearly opening on the CBD front, but only for products that make the grade.

What should the average producer or manufacturer from North America think about when setting up a supply chain for export?

Regulations

Thanks to the new treaties in place between the United States, Canada and Europe right now, there are market openings in the cannabis industry in Europe. Starting with the fact that the cannabis bug has clearly hit the continent, but there is actually not enough regulated product to be found yet and just about anywhere.

This is keeping prices high right now, but do not expect that to last.

european union states
Member states of the EU, pre-Brexit

Regardless, pricing of imports will not be like anything you have experienced if your background is state or even national market in the U.S. or Canada. There are higher regulations in every direction in Europe. Understanding how to translate the same into equivalencies that do not bankrupt you, overprice your products, or worse, get you in trouble with authorities is a critical first step, and not one to be taken lightly.

Get professional guidance from the country you are hoping to export to, at minimum. And that includes the legal kind. Every step of the way, you have to be certified with, at minimum, federal if not at an international certification.

No matter what cannabinoid is in the mix, this is ultimately a plant-based product. All rules one would normally think about when talking about other food products (for starters) are in the room.

While it is far from “this easy” (although thanks to the USDA’s decision about hemp, not to mention the FDA update on its own deliberations, there are now federal standards), think about the problem this way: If you were the world’s best chocolate bar, or even tomato juice, how would you hit Europe right now?

They have tomatoes here, and unbelievably great chocolate already. What is it about your offering that can stand out?  This is the million-dollar question. There are a few people and companies doing this right now, but it takes experience, and understanding the multiple regulatory guidelines involved. Once you figure that out, then you need to look at your supply chain, piece by piece and literally from the plant through end production for where you fit, and where you might not, into the regulatory discussion and market you hope to enter.

The Medical Discussion

There is now the possibility of exporting medical grade hemp and hemp extracts from the United States to Europe. However, everything must be GMP-certified to a medical standard, from organic production on up. This is an international standard, not an American one.

GMPThat qualification does not exist much in the cannabis industry in the United States (although ISO very much is) yet. Although it is dawning. On the Canadian side, there are plenty of companies in the discussion, because there is already a beaten path to export.

As the German cultivation bid proved, European certification, certainly is a high barrier to reach. Indeed, it is not only GMP certification in the room on the medical side but also rules about the import of all plant products.

From this perspective, it is also easier to import “finished” product rather than plant.

The Recreational Discussion

Before anyone gets too excited about recreational reform, the reality is that Europe is not going to step ahead of the UN (which has now pushed its next deliberation on the topic to the end of 2020). Yes, there are trials in a couple of places, but far from earth-shaking (recreational trials in the land of the coffee shop anyone?)

More interesting, of course, is what has just happened on the CBD side. But before American hemp farmers get too excited about this, they have hemp and farmers in Europe. And quite a few people have seen the light on this one already.

Sure New York state exports to Europe are probably in the offing, but so are hemp exports from the Southern states where the weather is warmer and the labor cheaper.

The European Union’s logo that identifies organic goods.

Certified labs, processing and extraction, and labelling are all in the mix. And every step must be documented as you go.

How to Proceed?

Whatever your crop or product is, take stock of the certifications you have now. If your plant was not organic, forget export anywhere. You are out of the international game.

However, with this taken care of, look at the certification requirements in Europe for extraction, processing and import of food and plant products and obtain production partners with the same – either in the US or abroad.

With luck, patience, skill and knowledge, yes, the doors are slowing opening, even to U.S.-based cannabis trade of the international kind.

Just don’t expect it to be easy, and leave lots of time for workarounds, pivots and even re-engineering at every point of the way.

The Impact of Brexit on the Global Cannabis Industry

By Marguerite Arnold
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HMS Great Britain has now set forth from its European home port for another intriguing and very British escapade on the high seas.

So far the jury is out.

It could be the beginning of the next British Golden Age, Spanish Armada and all that. Or could it could end up (more likely) somewhere up the Khyber Pass (a sordid misadventure of British Imperialism that did not go well in the 19th century with global implications still reverberating to this day). For Netflix fans of The Crown, think “Suez Crisis” as a more recent and apt analogy. Starting with as much as a 6.7% reduction in domestic GDP already on the horizon.

Snarky historical analogies and nostalgia aside, how will Brexit influence and shape a global cannabis industry, starting at home?

The UK Is Not Actually in Regulatory Free Fall

The first thing to realize is that most of the puffery around Brexit was that with the exception of labor conditions, there is little free choice in the world of trade anymore. The players who get export and import licenses, for anything, have to conform to basic equivalency rules, no matter what they are called.

This applies to cannabis in a big way. No matter how the UK market develops domestically in other words, and that is a separate discussion.

Currently, shamefully, the domestic medical guidelines for prescription of cannabis exclude chronic pain patients and a few other obvious groups. The NHS medical market in other words, is a monopoly, set up by the current and previous governments, mainly serving GW Pharmaceutical patients who qualify for Sativex and Epidiolex. Not to mention company shareholders.

Everyone else, including those for whom these drugs do not work well, or work less well than other alternatives, are left in an international trade negotiation in their living rooms as they and or their children suffer.

The import barriers for cannabis – both from Europe and from Canada are absolutely in the room and in a very personal way for the British right now.

How they actually define cannabis, will also clarify. This will be driven now by the UK’s biggest import partners – namely Europe, the United States and Canada (although South Africa and Australia of course, will always be in the picture).

Which regulatory scheme the UK adapts, including for cannabis and of both the THC and CBD variety (not to mention other cannabinoids), in other words, will at minimum have to be broadly equivalent with all of the above. Not the other way around. No matter how much the Food Standards Agency (FSA) wants to fuss and fiddle with “Novel Food.” That alone is a canard.

Cannabis is a plant. It is time to start acting like that. And it is no more “novel” than tomatoes in many, easy-to-understand environments, including commercial ones. Not to mention will increasingly be regulated like commercial food crops – even if those crops are then also bound for dual purpose medical use.

The regulators will eventually get there – but not without a lot of tortuous twists and turns.

A “New” Market? Not So Much…

There is a lot of consultant palaver and baloney in the room right now. There is no more a new market in the UK as there was in Germany (or Canada or Colorado). Local producers are already organizing, and on the hemp front. The big ones are hip to regulations and are getting certified to enter it. Everyone else is being left on the dangerous sharp end of police raids, even with prior local approvals.

GW logoThat said, foreign producers are of course looking at the UK right now, and in a big way. The lock GW Pharmaceuticals has on the domestic market will not hold long. European producers are absolutely in the room (starting with Tilray in Portugal and Alcaliber in Spain). Not to mention what is going on in other places right now, even if of less well-known corporate branding.

Every big Canadian company is already in the room in the UK, and many Americans are now beginning to show up in the market.

However, for the most part, such ventures are doomed outside of conference sponsorships until the regulatory questions are answered if not met.

And that includes federal certifications that are easy to find – there is no one single authority that handles cannabis internationally. And there never will be. Supply chains are already global.

A Perfect Export Market

One of the biggest, so far widely discussed questions is who in Europe will start exporting to the UK (forget Holland for the moment). Not to mention producers in Spain, Greece, Poland if not Macedonia. That conversation is also on the table now. For the first time, so is Germany, and on the medical side.

Pharmaceutical producers in particular who meet international pharma standards may be the best hope yet – although right now policy makers are still looking at cars rather than cannabis to help keep Germany’s trade export quota where it feels “comfortable” domestically.

Image credit: Flickr

That too will change. And fairly quickly. See Greece, if not South Africa.

The political roil of branding and politics afoot in Germany right now makes this new kind of export market idea as a part of economic development, an inevitability.

Not to mention, at least for the present, a reverse trade in regulated British CBD products – if producers are smart about regulations – throughout the continent right now.

Of all countries, outside Switzerland, the UK has the ability to develop a broad and intriguing market in the EU – but only if they are compliant with regulations in Europe.

And this is where the policy makers in Parliament and 10 Downing Street have already misjudged if not broadly misled, not in a regulatory environment of their own, but in fact in a diplomatic “room” where the rules are already set via international standards and certifications, not to mention treaties.

USDA Announces Risk Management Programs for Hemp

By Aaron G. Biros
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According to a press release published earlier this month, the U.S. Department of Agriculture (USDA) announced two new programs available for hemp growers to mitigate their risk.

The first is called Multi-Peril Crop Insurance (MPCI), which is a pilot hemp insurance program designed to cover against “loss of yield because of insurable causes of loss for hemp grown for fiber, grain or Cannabidiol (CBD) oil.” The second plan is Noninsured Crop Disaster Assistance Program, which protects against losses from lower-than-normal yields, destroyed crops or “prevented planting” where permanent crop insurance is not available.

Both of the programs are now accepting applications and the deadline to apply is March 16, 2020. “We are pleased to offer these coverages to hemp producers. Hemp offers new economic opportunities for our farmers, and they are anxious for a way to protect their product in the event of a natural disaster,” says Bill Northey, Farm Production and Conservation Undersecretary.

The MCPI program is available for hemp producers in 21 states, according to the press release. Th program is available in certain counties in Alabama, California, Colorado, Illinois, Indiana, Kansas, Kentucky, Maine, Michigan, Minnesota, Montana, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Tennessee, Virginia and Wisconsin.

There are a handful of requirements to be eligible for that program, such as having one year of growing under their belt and have contracts in place for the sale of their crops. Hemp growers producing CBD must have at least 5 acres and hemp growers producing fiber must have at least 20 acres cultivated.

In 2021, the press release states, “hemp will be insurable under the Nursery crop insurance program and the Nursery Value Select pilot crop insurance program.” With those programs, hemp crops can be insured if grown in containers and in accordance with federal law.

To apply for any of these programs, hemp growers must have a license and must be totally compliant with state, tribal or federal regulations, or be operating under a state or university research plot from the 2014 Farm Bill. Growers need to report their hemp acreage to the Farm Service Agency, a division of the USDA.

The press release also mentions that if the crops have above 0.3% THC, the crop becomes uninsurable and ineligible for any of the programs.