THIRD party enforcement of the new UK Novel Food rules is imminent after one of the industry’s leading payment providers said it would no longer serve non-compliant CBD sellers.
Worldnet Payments, which is understood to provide merchant services to over 100 UK CBD businesses, says it CBD clients will all have to provide proof of their efforts to secure Novel Foods compliance.
This backs up what many industry observers have been saying for some time.
That, with the Food Standards Agency (FSA) and Trading Standards simply not having the manpower to police the market effectively, enforcement will be accomplished through third parties.
Warning Letter
In January, this year, a UK-based spokesperson for Worldnet Payments told BusinessCann it was monitoring the UK Novel Food situation – this has now changed.
In a letter to its customers Worldnet now says: “As a financial institution we must ensure that businesses comply with the FSA requirement and your CBD products can be sold legally.
“Therefore can you please provide us with the FSA acknowledgement letter confirming the receipt of the application and stating the products and the application number.
“This letter is issued by the FSA to the party (supplier/manufacturer/merchant) submitting the application.
“If for some reason this cannot be obtained, alternatively we can accept a letter (on company letter-headed paper) from the party that made the submission confirming the products and the application number.”
Within the next few weeks the Food Standards Agency (FSA) says it expects all CBD products on sale in the UK to be aligned with a Validated Novel Food application.
While most UK businesses are following this path others are not, either through choice or because of the cost.
One of the CBD trade associations at the forefront of the drive to create a well-regulated CBD industry is the Association for the Cannabinoid Industry.
Supporting Compliant Customers
A spokesperson welcomed the development saying: ”We are in a pivotal moment for the UK CBD industry. Now that legal clarity exists, it is expected that ancillary services, and retailers, will play their role in enforcement by ensuring they only support customers who are compliant.”
Steve Oilver of The Canna Consultants has previously stated that both payment providers and insurance companies will play a part in delivering compliance. He added: “We told people this would happen as far back as June last year, and it will also be the case for Public Liability Insurance.”
The Worldnet statement goes on to say that businesses must provide the confirmation by April 1, although the Cannabis Trades Association (CTA) is requesting a delay, after it emerged that the FSA’s original deadline of April 1 has been rolled back by at least seven weeks.
Sian Phillips, MD of the CTA said: “Worldnet are only one of the many providers who have opened their doors and welcomed the industry following the popularity of cannabis based food products in the UK and other countries over the past few years.
“If Worldnet takes a hard stance, they may lose customers who are in the FSA’s Regulated Foods Authorisation queue, as well as future business clients who will be given no choice but to seek payment provision elsewhere.
“Worldnet’s solution might be to extend their deadline by a few months and follow the rationale of the regulatory bodies instead of this seemingly unrealistic path of closing down on their current clients.”
BusinessCann has approached Fibonatix, another popular payment platform with CBD companies, and is awaiting a response.
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