Why Cannabis Businesses Should Embrace Increased Regulation

France has been at the centre of cannabis industry news in recent months as it brought in new cannabis laws that meant users with more than 100 grams could face an on-the-spot fine of €200.

The country also limits the cultivation, processing and marketing of hemp to the plant’s fibre and seeds and drew criticism in 2014 when it prosecuted the founders of KanaVape for selling cannabidiol (CBD) products that had been extracted from hemp plants grown in the Czech Republic, despite them being grown and processed following the EU’s guidelines.

Related: Cannabis is Gaining in France, Drug Reform Overdue

But, in recent weeks, the EU’s highest court ruled that France’s ban on the marketing of hemp-derived CBD products contradicted EU Laws on the free movement of goods.

In a recent press release, the court wrote that ‘A decision to prohibit the marketing of CBD, which indeed constitutes the most restrictive obstacle to trade in products lawfully manufactured and marketed in other Member States, can be adopted only if that risk appears sufficiently established.’

While this is great news for KanaVape’s founders Antonin Cohen and Sébastien Béguerie, and the wider European CBD industry, I do think there were good intentions behind France’s legal restrictions.


The problem with cannabis

Cannabis has been stigmatised for years by the media, and that stigma has followed the cannabis plant from recreational use across to the hemp industry, with a surprising number of customers I encounter incorrectly believing that using CBD products will get them high or leave them red-eyed and craving junk food like the stoners portrayed in Hollywood movies.

Part of the issue is that the existing lack of meaningful regulation — that is, regulation that goes further than simply restricting the claims you can make — and research into any medicinal effects of cannabis use has led to an inability for businesses to make any claims about any of the potential upsides of using CBD products.

Related: The Science of CBD Oil and Cannabidiol Concentration

While it’s right that companies shouldn’t be able to make unsubstantiated claims about their products being miracle cures without unequivocal proof, the current restrictions mean that many quality brands are simply avoiding making any efforts to educate their customers about the cannabis plant.

In contrast, the companies within the industry who are willing to push the boundaries of what they can and can’t say, and who care little about the quality of their products, are being seen by more and more people.

The most recent target was Olivia Newton-John, who, last month, was forced to release a statement on social media to warn fans that a CBD business was fraudulently claiming that she endorsed their products and that they should avoid being scammed by the statements.

In fact, I recently performed a search on Amazon for ‘Hemp Oil’ and was shocked when I saw businesses selling 50 ml bottles of hemp seed oil at similar prices to CBD oil, with people even leaving five-star reviews for the ‘CBD oil’ they had purchased!

The sad reality is that, while the industry continues to operate in the grey areas, without well-structured regulation or the ability to properly educate potential customers, it’s ultimately the consumers who are missing out.


Are stricter regulations the answer?

While France’s regulatory changes may have pushed the boundaries of rationality and logic, I do think there were good intentions behind them.

With the global CBD market estimated to be worth $23.6 billion by 2025, it’s clear that we are still yet to reach the peak of the ‘Green Rush’.

Related: How to Identify the ‘Third Wave’ of Cannabis Investments

The sheer size of this potential market and the current lack of strict regulations and extensive research leave the entire industry open to fraudsters and scammers looking to make a quick profit off of inferior products.

However, when new regulations come in, they must be proportionate and not deliberately expensive to drive out good quality products.

Using pharmaceutical rules for a natural and complex product will be inappropriate since it is clearly not intended to be a pharmaceutical drug, but I do have concerns that regulators will deliberately bring in rules that are a sledgehammer to crack a nut due to the cynical world of protecting vested interests.

While the industry is still in its infancy, and it will take time for the research to catch up to the current state of the market, we must do everything in our power to maintain transparency with our customers and work together to drive the industry forward.

Related: What Does Organic CBD Actually Mean?

Ultimately, as cannabis business owners, we owe it to our customers to embrace increased regulations and advanced research, and we should all be working with policymakers to ensure that our products are held to the highest standards.

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