CBD market outlook overview
- EFSA issued its first positive CBD opinion after years’ pause
- Approval remains uncertain, requiring European Commission and Member States’ support
- EFSA’s low CBD intake limit may restrict commercial viability
- Consumer demand exists but regulation and understanding remain barriers
- Europe’s CBD market faces opportunities, yet widespread growth seems unlikely
After years in regulatory limbo, the European CBD market has at last received some good news. The European Food Safety Authority (EFSA) recently released a positive opinion on a CBD product, the ingredient’s first.
CBD, also known as cannabidiol, is extracted from the hemp plant. With only traces of THC, it does not cause a ‘high’ in consumers.
CBD is also considered a novel food in the EU, meaning products using it must achieve regulatory approval before they can be placed on the EU market. Yet since 2022, EFSA has paused all CBD assessments, due to insufficient data (these data gaps were later confirmed).
The recent positive opinion, then, could be a new dawn for the CBD market. Or its impact could be more limited.
What does it mean for the CBD market?
The use of CBD in beverages has enormous potential. The global cannabis beverages market, of which CBD beverages are a big part, is projected to have a compound annual growth rate (CAGR) of 17% between 2026 and 2036, according to market research company Future Market Insights.
Yet in the EU, regulatory restrictions have long been a stopper on the market’s potential.
Recently, EFSA gave a positive opinion for a CBD product from Irish supplements company Chanelle McCoy. However, this had several caveats. For example, it was considered safe with the exceptions of those under 25, those on medications and pregnant and lactating women.
Furthermore, it was deemed that EFSA’s established safe level of only 0.026 mg per kg of body weight per day, or 2 mg per day for a 70-kg adult, was appropriate for the product. This safe level has already been criticised as too low to be commercially viable.
Even with these caveats, the ingredient must still be authorised by the European Commission and Member States before it can be sold. And there is no guarantee of the ingredient being approved, explains Christofer Eggers, partner at the law firm Squire Patton Boggs. “The European Commission does not always follow the scientific opinion of EFSA for political reasons.”
Even if it is adopted, says Eggers, the approval “would not open a floodgate but rather allow a trickle.” The narrow usage limit in EFSA’s judgement “will be regarded by EU authorities as the absolute maximum they have to tolerate”.
Consumers and CBD
Then there is the case of consumers themselves. The current level of demand for CBD in Europe is there, but it is “emerging and constrained, rather than fully mainstream”, says Saurabh Gandhi, head of nutrition and wellness at market research company Grand View Research. Demand could rise following regulatory breakthroughs, but this is not guaranteed and depends on the nature of the approval.
“A clearer regulatory pathway could support greater product development and retailer participation, but the size of the eventual mainstream food-and-beverage opportunity will depend on the conditions attached to authorisation, particularly permitted dosage and target population.”
Consumer understanding of CBD remains limited as well, Gandhi explains. Its distinction from THC is not always clear to consumers.
“CBD is non-intoxicating, but its association with cannabis can create questions around psychoactive effects, legality, safety and appropriateness for everyday food and beverage consumption. That is especially relevant for mainstream brands and consumers who are less familiar with cannabinoids.”
Furthermore, if approved, CBD would exist in a fiercely competitive functional ingredients market.
Finally, the safe level permitted in the positive opinion of Chanelle McCoy’s product could limit how brands formulate and position products.
European scepticism
Member States have expressed significant scepticism towards CBD. Earlier this year, France banned CBD edibles.
This is in part due to distrust of the ingredient, suggests Eggers, and there is a “general feeling” CBD has no proven benefit for consumers.
Yet the regulatory situation in Europe is complex, he explains. In some Member States, such as Romania and the Czech Republic, certain CBD products are tolerated. Other countries, such as France and Germany, are far more strongly opposed.
Even if there is a limited EU-wide approval, says Eggers, Member States could still decide that there may be a risk.
Nevertheless, “this will only delay the introduction of new products within the EU approval”.
While EFSA’s opinion no doubt marks a watershed moment for CBD in Europe, it does not necessarily mean a booming market in the future. It could, for the wider CBD sector at least, mean very little.
