CBD Becomes a Schedule 0 Complementary Medicine – What you need to know!

Written by: Anthony Rees (National Chairman: TNHA)

The interest in cannabidiol (CBD) use in health products, foods, and even as an ingredient in skincare products has gained much momentum in the past twelve months in South Africa, ever since the substance was liberated from prescription-only status. But …. things are about to change and WILL affect the CBD industry and consumers choices of CBD products they currently use.

On the 8th of May Health Minister Zwele Mkhize signed into law the new scheduling status for certain Cannadidiol (CBD) containing products. This was gazetted on the 22nd of May seven days after the previous 12-month exemption period for certain CBD products lapsed. CBD under certain conditions is no longer excluded from the medicines schedules as per the previous year’s framework, and is now a Schedule 0 (zero) human medicine under Category D – Complementary Medicine.

CBD remains a Schedule 4 prescription-only medicine outside of the restrictions of the Schedule 0 provisions.

In order for a product to qualify as a Category D Schedule 0 medicine, the following conditions now apply.

The daily recommended dosage of the product may not exceed 20mg.
The product pack may not contain more than 600mg of CBD in total.
The Tetrahydrocannabinol (“THC”) content contained in the CBD used in a product may not exceed more than 1 part per million (0.001%).
Health claims which may be placed on the labels, packaging and associated marketing materials. However these claims are limited to low risk claims without any reference to specific diseases or symptoms related to these diseases. Only claims for ‘general health enhancement’ and ‘relief of minor symptoms’ will be permissible. It is not certain at this stage if such claims will have to be assessed or pre-authorized.

All products falling within the perimeters above are not required to be registered (licensed) by the South African Health Products Regulatory Authority (“SAHPRA”) before being sold, however they will be subject to all the production, import and distribution regulations of medicines under the Medicines and Related Substances Act (Act 101 of 1965).

All CBD products not within the above defined criteria are by default, Schedule 4 prescription medicines, and need pre-marekt authorization (registration) before being sold.

WHAT HAS CHANGED SINCE THE PREVIOUS CBD EXEMPTION?

Because CBD products under the previous exemption were not scheduled under the Section 22(A) of the official Medicines Act, there were no requirements for importers, wholesalers, manufacturers and distributors to be licensed to produce and sell CBD products within the conditions laid in the exemption notice of 15 May 2019.

There were no legal requirements to prove that the products sold were true to label (of good quality and contained what was stated on the label), or were contaminant free (not containing pesticides, heavy metals etc).

No one knows how many CBD-containing products are on the market in South Africa today, but the guess is that it’s many hundreds. The previous 12-month exemption period led to an expansive and competitive CBD product market taking root. CBD products made by, imported by and sold by CBD products marketers flourished, and are now sold in diverse markets from formal pharmacies to flee market stalls.

The way CBD product companies have been doing business up until now will change dramatically, despite the products still being allowed to be sold without a doctor’s prescription.

Every segment in the CBD product chain from importers, manufacturers (including contract manufacturers), contract packagers, wholesalers and distributors will now be required to be licensed to trade in these ‘medicines’ legally according to Section 22(C) of the Medicines Act.

The only sector which will not be required to be licensed to sell Schedule 0 medicines will be retailers, whether they are brick and mortar shops or online stores, according to Section 22(A)(3) of the Medicines Act

The scheduling of CBD-containing products as Category D medicines will be disruptive to small and medium size businesses currently involved in the CBD product industry, as they will now be required to regularize their businesses with pharmaceutical manufacture, import, wholesale and distribution regulations under the Medicines Act and the Pharmacy Act.

Companies trading in CBD products will now have to satisfy the SAHPRA that their products contain what they claim to have in them on their labels, and do not contain undesirable substances or impurities. Therefore pharmaceutical Good Manufacturing Practice (“GMP”) will be be a non-negotiable prerequisite to get off the legal starting blocks. In terms of Section 22(C) of the Medicines Act all local CBD product manufacturers are now required to be GMP certified and licensed as Medicines Manufacturers by the SAHPRA. Foreign GMP Certifications for raw ingredients and finished products will need to be certified with SAHPRA equivalence standards, and will only be allowed to be imported with the relevant certification. This means nobody will be able to continue to produce CBD products at home or in unlicensed manufacturing facilities.

Importers of bulk CBD and finished CBD-containing products will now have to hold valid Medicines Import Licenses.

Wholesalers of finished CBD-containing products will now have to hold valid Medicines Wholesale Licenses.

Distributors of finished CBD-containing products will now have to hold valid Medicines Distribution Licenses.

All of the above industry sectors above will be required to employ full time Responsible Pharmacists to sign off on the various legal compliance requirements, and pay the licensing fees and annual license renewal fees for their sectors accordingly.

It is noteworthy to mention that there is a long queue of companies awaiting GMP Certification and licenses in the sectors listed above. Some companies have been waiting over seven years to be signed off to trade legally.

All product labels and packaging will have to conform with the Labeling Guidelines for Category D Complementary Medicines.

All of these new requirements for businesses to sell legally will significantly add to the cost of doing business, and will ultimately result in these costs being passed on to the consumer, or businesses closing down. At the end of the day, it is no longer ‘business as usual’ for the CBD product industry in South Africa.

Sadly, many companies in the CBD trade will fall to the wayside as the logistical, technical and financial burden of compliance is fully realized. The biggest market share of the industry will shift to those companies which already have pharmaceutical licensing in place, and those who consolidate their brands under licensed contract manufacturers and licensed supply-chains. CBD is the latest casualty in the ongoing pharmaceutical expropriation of the South African natural health product industry.

What’s happening to CBD now is already a headache for many natural health product companies which a deemed to be selling ‘Complementary Medicines’. Many popular household natural health products are soon poised to be regulated out of existence by an overzealous and inappropriate regulatory regime currently being imposed by the SAHPRA. The TNHA and other stakeholders have joined forces and have taken the SAHPRA and Minister of Health to court to overturn the current regulatory scheme. This matter is set down for trial on the 26th and 27th of May in the Pretoria High Court.

If you are a responsible CBD importer, manufacturer, wholesaler or distributor, and want to keep your finger on the pulse of developments in this regard, please join the TNHA.

To find out more about the different medicines schedules in South Africa, click here.

Amendments to schedules _Cannabis