Some products are treated as poisons by the media. Some are held back as a wishful last desperate hope for the dying industry. Some are a new financial boom for a lucky few. Others are a bit of all of these, and others still are made to be illegal. When it comes to CBD food and drink, the jury’s still out on whether it’s a miracle cure, a fad, a misunderstood miracle, or something else.
Following the recent announcement by the British Government to broaden the scope of permitted substances in medicinal cannabis products, the UK insurance market have announced their view on the substance’s medicinal qualities. Their position on CBD cannabis products remains unclear, forcing many medical users to take a gamble on whether access to such products will be covered by their insurance.
In the wake of new research into the health benefits of cannabidiol (CBD) and the recent relaxing of the rules surrounding medicinal cannabis use, those in the UK insurance market are taking a closer look at the potential implications. The insurance industry is slowly making the switch from ignoring the issue to actively investigating the potential benefits of cannabis and CBD.. Read more about importing cbd into uk and let us know what you think.
Cannabidiol (CBD) products are becoming more popular across the world, from vitamins and cosmetics to infused chocolates and even pet goods. Despite the fact that the UK’s CBD industry is still in its infancy compared to that of the US and Canada, it is one of Europe’s biggest, with a projected 7.8 million people in the UK claiming to have used CBD products by 2020. 1 Indeed, sales income from the European CBD industry is projected to exceed £1 billion by 2025.
Manufacturers must ensure that they are taking the appropriate measures to manage unexpected hazards when adding CBD products into an existing brand or product line. As consumer demand for CBD grows, so does the need for producers to understand how their risk profile has changed, as well as potential insurance implications.
One of the major growth factors for CBD products is innovation. We’ve noticed a significant change in demand for CBD-infused food and drink items as CBD has become more generally recognized. While CBD oils and supplements are presently the industry leaders, it is becoming increasingly usual to find specialized CBD cafés, restaurants, and boutique shops on the internet, indicating the growing prevalence and popularity of CBD.
CBD’s connection with cannabis means there are numerous unknowns and possible misunderstandings about its usage and effects as it transitions from a new option to a mainstream commercial component. As a result, the insurance industry has yet to develop an uniform underwriting position or standard procedure for CBD food and drink risks. As a result, producers in an already heavily regulated industry have been exposed to a complicated array of risks and scrutiny — difficulties that have caused some insurers to be wary about underwriting CBD products.
Manufacturers intending to create CBD food and drink items should consider not just how those goods will change their risk profile, but also how they will influence their overall insurance program, given the dangers associated and legal limitations. In theory, underwriting CBD risk is similar to underwriting other food and drink goods, however where the liability insurance market has a strong demand for food and beverage businesses, the addition of CBD infused products may stifle that enthusiasm.
We contacted eight major liability insurers at Lockton to learn more about the mindset and readiness of the UK insurance market to cover CBD food and drink risks.
Only three leading markets clearly expressed their willingness for CBD-related risks out of those contacted. Due to possible customer non-compliance and bad procedures, two marketplaces voiced worry about CBD hazards. They were particularly concerned about the product’s quality, purity, and legality. Current legal rules specify that tetrahydrocannabinol (THC), the primary psychoactive component present in hemp, must be less than 0.2 percent in order for goods to be sold in the United Kingdom. However, determining this may be challenging. Indeed, a 2019 research by the Centre for Medicinal Cannabis (CMC) found that seven out of 30 CBD oil products in the UK contained detectable THC levels despite being labeled as THC-free. Similarly, the Food Safety Authority of Ireland (FSAI) discovered last year that 37 percent of the tested products had THC levels that would exceed the European Food Safety Authority’s (EFSA) acceptable limits if eaten as directed. Manufacturers that lack the dependable equipment required to properly monitor and identify these levels risk unintentionally selling an unlawful product.
The remaining three markets are adamantly opposed to CBD-related risks, with one even viewing underwriting them as a violation of their ethical standards and values.
So, although the industry is expanding rapidly, there is a strong feeling of market fragmentation when it comes to insuring CBD risk. While some are adamantly opposed, others are much more open to the idea.
What does this imply for producers?
Manufacturers seeking to capitalize on this trend should keep the following in mind as they try to protect themselves against CBD-related hazards in the future:
Any new product needs considerable study and thought before it can be developed. This is particularly true in the case of CBD, which has a history of stigma, negative associations, and misinformation.
Underwriters are more likely to consider CBD food and drink hazards if the CBD supply is hemp-derived, lawful, and part of a larger product line rather than a manufacturer’s single line of production.
Underwriters may choose for a case-by-case approach. As a result, they may request extra information from manufacturers about their relevant quality control and safety procedures, as well as necessary authorizations to manufacture and sell the product and distribution networks. To prevent ambiguity, producers should clearly explain the source and type of CBD supplies purchased, as well as provide certificates of analysis (COA) that guarantee the purity and quality of the insured goods.
Manufacturers will need to keep a close eye on the evolving regulatory frameworks and rules regulating CBD production and distribution, as changes in law may have an effect on the insurability of CBD food and drink hazards in the United Kingdom.
Before providing or considering quotes for CBD food and drink items, insurers may need chemical engineers and specialized risk managers to participate in the risk assessment.
Manufacturers will need to be nimble, responsive, and thorough in their approach in order to keep up with changing law and regulation. There is still considerable skepticism in the UK insurance industry, with a number of major insurers hesitant to provide coverage. However, with CBD products quickly growing and showing no indications of slowing down, it seems that insurers will need to learn more about the CBD product risk and establish a clear and consistent underwriting position sooner rather than later.
The UK cannabis industry is currently in a period of transition. In the past week, we have seen the government announce that they will be allowing the sale of CBD food and drink, as well as a ruling that production of CBD products should be allowed in all food premises in the UK. These changes are a result of the government’s recent decision to make cannabis-based products available on prescription to certain medical conditions.. Read more about cbd laws uk 2021 and let us know what you think.
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