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The Deloitte report: A Controversial Collaboration Shrouded in Industry Influence

An opinion piece from The Hemp Hound Agency



On 08/06/2023, the FSA released a report by Deloitte that reviewed Novel Food Regulations (NFR) and explored options for the UK to separate itself from EU guidance. However, there are concerns about the contract process and Deloitte's independence due to their past and present client relationships.

20230331 FSA Novel Foods Review _Final Report
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Before delving into the FSA's interpretation, let's examine the intent behind this review.


One aspect of Deloitte's contract caught my attention: the review of when an Article 4 determination is required, and when a food can be considered novel. Prior to the FSA tendering the contract, there were concerns in the industry that cold press hemp oil products with an advertised cannabinoid content were bypassing NFR. Although The Hemp Hound Agency challenged this belief, the FSA's lack of substantial evidence, such as an Article 4 determination recognizing the history of consumption of hemp oil containing CBD, kept people skeptical despite the FSA saying that they deemed cold press hemp oil as not novel.


When an Article 4 determination was finally shared on 26/05/23, it revealed inconsistencies. The EU's published version in December 2019 did not mention cold press or ethanol extraction, unlike the recent document. This raises questions about why the FSA withheld this information when trade associations and others were trying to address the issue of cold press hemp oil. The FSA even discouraged companies from submitting Novel Food applications containing ethanol extraction products, and dissuaded Article 4 applications for cold press hemp oils.


Furthermore, the Article 4 determination primarily focuses on CBD isolate rather than full spectrum hemp-derived products containing CBD. So is that document what is actually driving novel foods for CBD products?


On the left is the FSA version of the EU article 4 on the right, and you'll see that the FSA version has 'more words'

These events lead to the belief that the FSA intentionally avoided Article 4 applications for cold press hemp products, anticipating Deloitte to address perceived loopholes. Contrary to claims that cold press hemp oils circumvent NFR, they work within the regulations, as there is a history of consuming raw plant extracts and knowledge of cannabinoids predating May 1997.



FSA's Interpretation and Concerns


The FSA's interpretation of the review presents several issues. They claim that innovation in novel foods necessitates potential future challenges within the current regulatory framework.


However, If the current legislation is sufficient for early CBD applications, why is it considered inadequate for other products? The FSA has mentioned previously that lab-grown meat, edible insects, and climate change are factors that are influencing the review, but these do not seem to require different regulations than those applicable to CBD products.


Email response to a press request from the head of novel foods, 09/03/23


Additionally, the FSA and Deloitte did not involve any stakeholders from the hemp and CBD industry in the NFR review, despite acknowledging the industry's significance in future novel food authorizations.


Public interest disclosure complaint response, 12/05/23
Update on that very soon!


This raises suspicions about whether the FSA or Deloitte intentionally excluded CBD companies and industry stakeholders at the instruction of either the FSA or Deloitte's clients, just in case stakeholders' independent opinions compromised the review.



Future Models and Policy Development


The report introduces five strategic choices for the FSA to consider. The first option, "No regrets" opportunities, aims to benefit all stakeholders without evident downsides. The FSA suggests retaining key features of the current model while removing pain points and improving accessibility, transparency, and information around the framework. However, the decision-making process for determining the value added to stakeholders and regulatory outcomes remains unclear.


Furthermore, the lack of transparency displayed during Deloitte's review raises doubts about the FSA's commitment to accessibility and information sharing.


The FSA's report acknowledges that policy development and legal advice are necessary before implementing any changes. Considering the recent reports of a U-turn on plans to revise EU law and the upcoming general election, it raises questions about the feasibility and timing of policy




While the FSA emphasizes that the Novel Foods Framework is evidence-led and safety-based, it raises questions about whether this approach has been consistently applied to CBD products. The CBD industry has faced challenges in establishing safety due to changing regulations and the lack of clear guidance. The burden of proof for safety has been placed on CBD manufacturers, who often lack the resources and expertise to conduct extensive safety studies.


Another concern is the proportionality of the safety requirements. Hemp products are generally considered low-risk, with a long history of use by consumers. However, the FSA's approach to novel foods for CBD has imposed stringent safety standards that may not be commensurate with the actual risks involved. This has led to delays, uncertainty, and financial burdens for small businesses in the CBD industry.



Transparency and consistency


The FSA acknowledges the importance of transparency and consistency in its regulatory approach. However, there have been instances where transparency and consistency seem lacking in the novel foods process for CBD. The FSA's engagement with stakeholders, particularly those in the CBD industry, has been lacking.


It is essential to ensure that all relevant stakeholders, including industry representatives, are consulted and their perspectives considered in decision-making processes, but that hasn't happened for the CBD industry



Consumer involvement


The FSA recognizes the need for consumer involvement in shaping regulations, but it is crucial to ensure that consumer voices are independently represented.


In the case of CBD products, consumer awareness and understanding have played a significant role in shaping the market. However, there are concerns that consumer opinions may be influenced by industry narratives and biased information. It is essential to monitor and assess consumer awareness accurately to ensure their interests are protected.



Regulatory support for SMEs


The FSA acknowledges that small and medium-sized enterprises (SMEs) may require more clarity and guidance due to their limited resources and lack of regulatory expertise. The novel foods process for CBD has placed a disproportionate burden on smaller businesses, many of which have faced challenges in navigating the complex regulatory landscape.



Aligning with international regulatory systems


The FSA considers the possibility of aligning the UK's novel foods regulations with those of other countries, particularly the United States. The US FDA's approach to CBD as a medicinal product rather than a dietary supplement has implications for the UK CBD industry. The potential alignment raises concerns about the future categorization and regulation of CBD products in the UK. It is crucial to carefully evaluate the implications and potential consequences of such alignment before making any decisions.


The FSA's review of the Novel Foods Framework presents various options and considerations for the future regulation of novel foods, including CBD products. However, there are significant concerns about the transparency, consistency, and inclusivity of the novel foods process, particularly in relation to the CBD industry. The FSA should address these concerns and ensure that the regulation of CBD products is based on objective evidence, proportionate to the risks, and takes into account the perspectives of all relevant stakeholders.


It is essential to strike a balance between consumer safety, industry innovation, and the sustainable growth of the CBD industry in the UK.


The FSA's interpretation of the review presents several issues. While they claim that innovation in novel foods necessitates potential future challenges within the current regulatory framework, the FSA's exclusion of stakeholders from the hemp and CBD industry in the NFR review raises suspicions about the integrity and independence of the process. The FSA acknowledged before this report the significance of the CBD industry in future novel food authorizations, but fails to involve industry stakeholders in decision-making.



Conflicts of Interest and Key Enablers for Regulatory Reform


The Deloitte report also highlights key enablers that are crucial for successful implementation of new regulatory features and models within the FSA. Cultural change across the entire organization is essential for the revised novel foods regulatory model to be effective. The FSA needs to develop a mindset shift that embraces a different way of working and encourages collaboration with stakeholders and academia to advance scientific capabilities.


Clear drivers, consistent risk appetite, and leadership alignment are critical for building buy-in and momentum to implement the desired regulatory features/models effectively. The FSA must set out clear drivers for enabling innovation and align risk appetite accordingly. Senior leadership commitment plays a crucial role in ensuring successful reform.


Skills and capability are fundamental enablers of any transformation, particularly in the context of novel foods. The FSA needs to assess and strengthen its skills and capabilities to effectively implement the revised regulatory model. Collaboration with other international food regulators may also be necessary to leverage strengths and knowledge, but is it essential?


Funding and capacity considerations are crucial for supporting the transition to a new way of working. The FSA must carefully balance investment needs with its core regulatory operations to ensure the smooth functioning of both aspects.



Conclusion


As the FSA explores regulatory reform within the Novel Foods Framework, conflicts of interest within the organization need to be addressed. Transparency, consistency, and inclusivity are crucial for ensuring the integrity and effectiveness of the regulatory process, particularly in relation to the CBD industry. By embracing the key enablers outlined in the Deloitte report, such as cultural change, leadership alignment, skills development, and adequate funding, the FSA can pave the way for a more transparent and robust regulatory framework that supports consumer safety, industry innovation, and the growth of the CBD industry in the UK.



But...


Is it that simple? No! The FSA recently were informed by myself that Deloitte had some interesting clients that meant they were far from independent, which they chose not to respond to.


They also dismissed the fact that several of their associated agencies (CoT, ACNFP, EU Working Group on Novel Foods) have members who have not declared their interests, they are all of those people who are associated with Reading University, and the University of Plymouth, who are associated with GW through research grants, as well as having ties to Epidiolex and Sativex respectively.


They've also dismissed the facts that they have validated products that didn't exist before 13/02/20 despite that being a key requisite for being on the FSA public list for CBD products, and have chosen to validate products that exceed the 1mg rule (MoDR) even though the Home Office specified after novel food for CBD products was announced by the FSA that these products would be subject to MoDR and MoDA dependent on cannabinoids present outside of CBD.


Further to this they had chased a novel distinction on CBD products from 2015, on behalf of a company whose name has been redacted on the Article 4 highlighted about.


The FSA say that they chased that distinction by engaging with EU member states, but I ask you, don't you think that's a lot of work? They could have submitted an Article 4 in 2015 and allowed the EU to make the distinction, but instead they waited three years to make their move, and when they did, they either submitted a different document to the EU, or got the EU to hide the parts about cold press hemp oil and ethanol extraction.


So my final questions are these:


  • Does the FSA know how to be transparent?

  • Why is it that every point raised by the FSA as a viable alternative to the current NFR is something that the CBD industry has already gone through?

  • The FSA raise the potential of 'pharmaceutical type guidance' with Point 3 on Page 3, so considering the redacted Article 4, it's two versions, and Deloitte's clients, are they sure that this review is not about CBD products?

  • And finally, if the FSA was to embrace regulations from a foreign country, say the US, would that allow for a backdoor pass for the MHRA to agree with the FDA and define CBD as purely medicinal?


Finishing thoughts


There needs to be reform without a doubt, but I question whether that is of the NFR and not the FSA themselves. They have resided over a calamitous show of uncertainty, with little to no dialogue (apart from with the ACI and now Deloitte, who both have ties to GW), transparency, or fairness for that matter, and that's before we talk about redacted Article 4's or this report. The FSA neither announced a review of NFR, or who won it until 14/02/23, two weeks before the contract was to be completed, and then only on LinkedIn. There's no transparency there, and the FSA knew that.


Safety is key for Novel Foods, specifically that of the consumer, but I don't think that's adequately reflected here. Reading between the lines it's about protecting companies, but if you read between them further, companies goes from plural to singular.


International harmonisation scares me, especially when it looks like the FSA has eyes on the FDA, who want CBD supplemental products off the shelves due to a crazy level of thinking that goes along the lines of "CBD and THC can't be foods as research into their medical potential existed first", and that's said with a fist full of GW lab reports on show.


And then there's 'scientific research and evidence' - If the FSA can provide a response to why they disregarded the WHO data on CBD products in favour of 16 lab reports from GW for a pharmaceutical grade CBD isolate, that would be great, especially as that data would have come from many companies, and not just one.



For more information of The Hemp Hound Agency, email cefyn.jones@hemphound.co.uk




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