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“Shut out and completely disregarded”: We’re being shunned for “big business” say CBD brands

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Small UK brands say they feel "shut out" and "completely disregarded" in favour of big companies.

Two months before the deadline for novel food applications, smaller CBD brands describe feeling “completely disregarded” as the industry appears to take another step towards “shutting out” grassroots businesses.

This week, the Association for the Cannabinoid Industry (ACI) announced a partnership with Trading Standards.

Approved by the Secretary of State last week, the ACI is now the first UK cannabis industry to formalise a partnership with Trading Standards which will allow the ACI and its members to seek advice from the official body that will be enforcing the market from April onwards.

After the FSA’s 31st March 2021 deadline, any CBD product that does not have a validated novel foods application will be illicit.

As part of the agreement the ACI has agreed to run educational webinars and develop literature to enable Trading Standards officers to recognise non-compliant CBD products sold in the UK.

In exchange, the Trading Standards will provide webinars, training, general information and guidance on topics such as, labelling, advertising claims and food safety management plans to ACI members.

“We are thrilled to further support the sale of safe and compliant CBD in the UK through this partnership with Trading Standards,” Leila Simpson, ACI innovation director said at the time of the announcement. 

“This will enable us to ensure our members are getting the best available advice to help raise the standards of the industry and more easily share intelligence with the regulator about non-compliant products after the novel foods March deadline.”

Although the ACI says the partnership hopes to raise the quality standards of CBD for sale in the UK, many CBD advocates and small businesses see it as another step towards “shutting out” smaller companies who are unable to afford the high membership fees.

Peter Reynolds from CannaPro, another UK trade association for the CBD sector, describes the fees as “outrageous” and cites companies that have withdrawn their membership for this reason.

In 2019, members of the ACI reported admission fees of £12,000 or £50,000 per annum. 

The ACI confirmed to Cannabis Health that there is now just one fee, of £25,000 a year, but says this allows it to “hire the best people” in order to engage with those in the scientific and regulatory sectors on a “peer to peer” level.

According to Reynolds, CannaPro, which represents many of the UK’s smaller CBD companies, has not been provided with the same level of information as the ACI.

As a trade association, he believes both bodies should be treated on “exactly the same basis”.

“Essentially what the ACI is doing is setting up a club where the admission fees are tens of thousands of pounds,” Reynolds tells Cannabis Health.

“This is all about a campaign to destroy the small businesses that created the CBD market and seize control of it.

“These arrangements between Trading Standards and commercial organisations are not new. It has happened before but what these [partnerships] are usually trying to do is help retailers clarify what is going on.

“But when you have an organisation like the ACI, which is systematically engaged in trying to close down the majority of the market in favour of its members, it’s deeply shocking.”

Mike Peates, founder of CBD company Medivita, also fears the move will leave smaller businesses at a disadvantage.

“Whilst I understand the need to remove rogue traders from the industry and have helped Trading Standards with this, I can’t see how this will end up being impartial,” he says.

“The ACI has a membership paying huge fees for them to manipulate the decision makers. On the face of it this partnership means they will be both Gamekeeper and Poacher acting in the best interest of their membership.”

This echoes the sentiment of many smaller CBD companies that are feeling “cornered” by the events surrounding the FSA’s Novel Food Applications.

Speaking to Cannabis Health, director of Leafline CBD and All World Products, Paul Shrive, says: “As always, it’s monopolisation. We, the small guys, pave the way then big business comes in and takes over.

“Effectively what we have is a politician-fuelled trade body looking to monopolise and take over the cannabis sector. It’s as simple as that.”

Shrive believes the current situation extends back to 2016, when the UK “gave away” its cannabis sector.

“We gave it away by allowing American and Canadian companies to come over to the UK and influx the market with their products, whether they are isolates, whole-plant or full-spectrum,” Shrive says.

“We are now dealing with the consequences.”

Having first experienced the benefits of cannabis in the 1980s while living in Africa, Shrive has had a passion for the plant’s medicinal properties for over thirty years. Having launched his first CBD company in 2016, he says “it’s the most frustrating and soul-destroying situation to be in”.

Sam Connolly, owner of CBD oil brand, Bnatural is more understanding of the ACI’s actions.

“I get where [the ACI] is coming from,” Connolly says. “They want to police the industry because their members have forked out tens, if not hundreds of thousands to become members. They need to make sure they do what’s right for their members.”

Despite this, Connolly still feels that the UK’s CBD sector is under “systematic attack from all angles”.

Aside from its own brand, Bnatural has multiple other businesses relying on it to have its products available after the Novel Foods deadline. The company prepared itself early and took other routes to compliance without the help of consortiums such as the ACI.

“We have direct contact with the FSA and we’re getting information that way,” Connolly explains. 

“But the [ACI] subscription is designed for the elite, isn’t it? It’s not designed for smaller [businesses] like us. Fees are way too high for most people.”

For CBD company, Karma Coast, the health of its customers is its primary concern.

As a producer of full-spectrum oils, the Newcastle-based company expects that many of its products will be deemed illicit after the March deadline, despite claiming that they are more effective than isolates. 

Karma Coast’s founder, Dylan Mortimer says data from his company’s product development showed that an isolate product with a 50 percent concentration of CBD was less effective than a whole-plant product with just six percent CBD.

With many people now relying on Karma Coast’s products for managing their health conditions, the company is concerned about the future of the business.

“Our business is just a bit up in the air at the moment,” Mortimer says.

“We will look to supply something else, but unfortunately, it will be an inferior product.

“I feel like we’re being shut out and completely disregarded.”

In 2019, the ACI carried out the first major third party testing of CBD products in the UK. The report found only 38 percent of the products were within 10 percent of the advertised CBD content and 38 percent actually had less than half of the advertised CBD content, with one product containing no CBD at all.

According to the report the test exposed “regulatory gaps” and highlighted a need for “well-regulated, innovative and responsible industry” to protect consumers. 

Speaking to Cannabis Health, Shomi Malik, external affairs director at the ACI, says: “This market has existed in a grey area for a long time and we in no way want to diminish the good work of a lot of the companies that have been around for a little while. 

“We’ve got the same mission, we want to increase access to cannabinoids. We want to increase the levels of education and decrease the stigma and to see real mass adoption. If retailers can’t engage with the sector meaningfully [due to a lack of regulation] this will be harder to achieve.”

Malik admits that some of the events around the novel food applications have caused confusion in the sector and the situation has not been “ideal”.

He continues: “I understand that the novel food process is out of reach for a lot of companies, but the ACI didn’t push for novel foods, we pushed for consumer protection. 

“We want safe CBD products out there and novel foods regulation is an imperfect model, but a happy compromise. If you look at any other food products, you have to prove it’s safe.”

However, he refutes the idea that the ACI is “in cahoots” with the FSA.

“We are supporting them and making this process simpler and smoother for companies. But we are diligent about what we want to achieve and won’t compromise on our quality standards and that gets used as a stick against us for favouring big business,” says Malik.

“Our membership fees allow us to hire an incredible team and carry out developmental work in science and policy, which in turn will make things more accessible for our members. We’ve made tremendous strides and the speed with which we’ve achieved clarity and a measure of quality controls can only be a good thing.”

He adds: “Not everyone can afford them, and we’re very open about that, but we’re also open about how smaller companies can work with the industry at large. 

“We do have a lot of startups in our core cohort and we’re about to launch a project to help smaller brands work with larger companies.”

Cannabis Health has approached Trading Standards but they did not wish to comment.

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Industry

Cannabliss to open brick and mortar dispensary

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Michael Dobson - Cannabliss founder

UK-based medical cannabis group, Cannabliss aims to help patients transition from the illicit market into the legal cannabis space.

Following a long, “drawn-out” application process, Cannabliss has secured a pharmacy licence for dispensing medical cannabis through its online platform.

Now, after handing out its first private prescription this month, the company has announced it will be opening a brick and mortar site in Preston in April 2021.

Set to open on 12 April, the store will sell legal, over-the-counter cannabis-based products and also offer advice and guidance to people who are seeking to secure a medical cannabis prescription.

Cannabliss was founded by Michael Dobson, who was involved in a legal battle for several years over the legality of cultivating cannabis plants. In a saga that climaxed with him taking the then Home Secretary, Amber Rudd to court, he fought for a judicial review of cannabis legislation.

Having spent many years involved with the illicit cannabis market, including a period behind bars for growing several of his own plants, Dobson is now on a mission to widen access to legal medical cannabis.

“The vast majority of people have very little understanding of the legal cannabis market,” he tells Cannabis Health.

“What we’re doing is effectively creating a concierge service in which we help guide [people] through the process of becoming a legalised cannabis patient.”

Cannabliss says it aims to build trust with its customers and establish itself as a “go-to” place for trusted information about the medical cannabis landscape.

Dobson explains: “Customers have the opportunity to have a face-to-face conversation with somebody who specialises in this particular area, rather than it just being a vape shop or health food store that has added cannabis products to its already existing range.

“If we do have somebody coming in and asking about the process of getting access to medical cannabis, we can explain that to them.”

Currently, in the UK, there are qualifying conditions that must be met before being considered for cannabis-based treatment.

Although an estimated 1.4 million people consume cannabis for medicinal purposes, very few can access it via a prescription.

Dobson believes that there is a “great deal” of people that could meet the criteria for a medical cannabis prescription but have never considered it due to the cost and exclusivity of private healthcare.

He says Cannabliss will provide support to its customers if they choose to go through the official process.

“Even though the prices have dropped significantly over the past few years, we still think there’s going to be a hurdle to overcome in terms of breaking down that barrier; that stigma that is there for a lot of people,” he says.

The company is already putting plans in motion to expand into a franchise with two provisional stores set to open this summer in Leicester and Essex.

As part of this franchising effort, Cannabliss aims to provide opportunities for people who may have previously been involved with the illicit cannabis market.

Dobson believes that it is “morally right” to give people the chance to enter the burgeoning legal market.

“I always wanted to include as many people as possible within what we’re doing, and support people that have been in a similar position to myself,” Dobson adds.

“We will not discriminate on somebody because they maybe have a criminal history like myself.

“In actual fact, these people are actually the best people to have running our franchises because they’re so knowledgeable.”

Dobson also believes that this approach could help reduce the influence and scale of the illegal market.

“By removing people from the illegal market and bringing them into the legal market, you’re getting rid of the black market rather than putting something in place that’s in competition with it,” he says.

Looking ahead, Dobson says the company is feeling “very positive”. It has formed partnerships with suppliers in the UK and Europe, including a distribution agreement with Canopy Growth Corporation subsidiary, Storz and Bickel, for its range of medical-grade vaporisers.

“It’s going very well and we’re anticipating a lot of interest,” Dobson adds.

“Feedback that I’m getting from different people [in the sector] is that a lot of people are interested in what we’re doing, how we’ve got to where we’ve got to and, in particular, my backstory and how that fed into the whole ethos of what we’re trying to do.

“I feel very strongly that the UK is going to become a world leader in the legalised cannabis space over the next few years and I’m looking forward to playing my own small part in that.”

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Twitter’s Katie Ford joins Fyllo to focus on cannabis sector

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Katie Ford - former head of global brands for Twitter

Tech and media leaders are shunning social media giants to bring their expertise to the cannabis industry.

Twitter’s former head of global brands, Katie Ford has announced she is joining cannabis marketing company Fyllo as chief operating officer.

Fyllo is working with major cannabis companies to enable them to advertise to mainstream consumers.

Ford was previously at Twitter where she served for the past two years as head of global brands and is one of the biggest names in digital media, with a career built at Fortune 100 media & technology companies at the intersection of data, marketing, and creativity. 

She spent two plus decades at Publicis Media, rising to the rank of president where she was the Executive lead on P&G, Coca-Cola, USAA, and Kellogg’s accounts.

During her time at Publicis she was recognized by Ad Age as one of the “Women to Watch,” and by Campaign US, as a leading “Media Maven.” 

From there she joined Amobee’s executive team as chief client officer, where she was integral in delivering two successful acquisitions within 18 months, along with achieving positive EBITDA with over $1billion in annual revenue. 

The Fyllo Compliance Cloud is a suite of software and services built to overcome the complexities of highly regulated industries.

With 2021 shaping up to be a transformational year for cannabis, Fyllo now allows cannabis brands to market themselves at a scale that has never been possible for companies that operate in highly regulated industries.

Mainstream brands also seek out Fyllo’s Data Marketplace to target previously inaccessible cannabis and CBD consumers.

Ford was the first person to be appointed to Fyllo’s board of directors, a role she’s held since 2019.

“Katie has been an incredible partner since day one, always believing in the company and its mission,” said Chad Bronstein, founder and CEO of Fyllo.

“She was the first person to join our Board and has been instrumental in Fyllo’s creation, growth and development.”

Ford added: “Fyllo has built incredible products and proven their business model in a very short period of time.

“I look forward to being part of Fyllo’s success as we build breakthrough solutions for companies in highly regulated industries like cannabis, pharma, and alcohol.”

As COO, Ford will depart Fyllo’s board of directors to assume her new executive position.

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Kanabo brings its unique VapePod to UK patients

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The VapePod can administer a measured dose of cannabis extract

Following its listing on the London Stock Exchange (LSE) cannabis company Kanabo is set to make its unique vaporiser available to UK patients. 

A week after it became the second company to list on the LSE, Israeli firm Kanabo, has announced it will supply its medical-grade inhalation device, VapePod and a line of medicinal cannabis formulations in pods for the UK market. 

The company has signed its first distribution agreement with the UK’s biggest cannabis clinic provider, LYPHE Group, which is part of Drug Science’s Project Twenty21. 

Through this new agreement, Kanabo’s VapePod medicinal cannabis formula, will be made available to Project Twenty21 patients under LYPHE Group’s brand NOIDECS.

Kanabo seeks to provide an alternative solution to the smoking of medicinal cannabis flowers.

The VapePod will be the first product of its kind, a medical-grade handheld vaporiser with controlled metered dosage, made available to UK cannabis patients with a medical prescription. 

It can administer an accurate, measured dose of cannabis extract, which the company hopes will improve patient access and boost trust amongst medical professionals.

The initial formula, which Astral Health will distribute under the name NOIDECS 400T, is based on the Israeli medical cannabis pharmacopoeia as a recommended ratio for pain management. 

Kanabo and Astral Health will work closely to make the products available to patients over the coming months.

Avihu Tamir, Kanabo’s CEO commented: “We believe this new product will be revolutionary for medical cannabis patients who need immediate relief of pain, and will replace the smoking of cannabis flowers as a medical delivery method, which is one of Kanabo’s main targets.”

Kanabo founder, Avihu Tamir

Project Twenty21 provides eligible patients with affordable medical cannabis treatment, monitored by Drug Science and aims to create the UK’s largest body of evidence for the effectiveness and tolerability of medical cannabis.

LYPHE Group announced its partnership with Project Twenty21 in December to bring a range of EU-GMP and equivalent GMP medicines to the UK.

LYPHE Group, which has more than 60 percent of the British patient market, recently entered into a supply partnership with Canadian manufacturer, Northern Green to bring a range of indoor grown flower-based products to the market.

Dean Friday, LYPHE’s CEO added: “We have seen the headlines, and we have witnessed the negative impact of opioids. Pain is not going to go away, so a more natural and caring approach to treating it must find centre stage. Thanks to our partnership with Kanabo we now have a metered dose NOIDECS product that can treat patients across the U.K. that suffer from chronic pain.”

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