The Court of Justice of the European Union ruled CBD is not a narcotic drug as it “does not appear to have any psychotropic effect or any harmful effect on human health”.
The decision came about in relation to the prosecution in France of E-Cigarette company KanaVape, which exports CBD oil made from whole hemp plants.
French law prohibits the sale of CBD extracted from the whole plant (meaning only CBD extracted from fibre and seeds is permitted). However, the CBD used in KanaVape products was extracted legally in the Czech Republic, which permits the use of CBD extracted from the whole plant.
The CJEU added: “A Member State may not prohibit the marketing of cannabidiol (CBD) lawfully produced in another Member State when it is extracted from the Cannabis sativa plant in its entirety and not solely from its fibre and seeds.”
It further observed that “the provisions on the free movement of goods within the European Union (Articles 34 and 36 TFEU) are applicable, since the CBD at issue in the main proceedings cannot be regarded as a ‘narcotic drug’.”
‘A crucial decision for the CBD industry’
Sarah Ellson, co-head of regulatory at law firm Fieldfisher, called the ruling a breakthrough for the EU CBD market, which has been facing regulatory confusion after the European Commission postponed Novel Food applications in July as it decided whether to class non-synthetic CBD as a narcotic.
“This decision is crucial for the CBD industry, as it is the first time the CJEU has given its interpretation on the nature of CBD and thus how it should be regulated by Member States and should bring the much needed harmonization to the EU market, which had frustrated many businesses operating in this space,” she told FoodNavigator.
“The case highlighted that the French authorities were taking a harder line on certain CBD products (in this case the sale of CBD vaping products) than other EU countries. The case supported the free movement of these products in the EU but does still allow the French national court (and by implication other EU Countries) to prohibit its sale but only if a real, not hypothetical, risk to public health can be established.”
She now expects the decision to “breathe life into the Novel Foods authorisations process which has, in the EU, been thrown into turmoil by the European Commission’s preliminary view that CBD was a narcotic and so could not be used in foods; delaying and frustrating the novel food applications to the EFSA.”
Optimism the EC will change its tune
UK industry body the Association for the Cannabinoid Industry said the ‘landmark’ ruling will have huge ramifications throughout the European CBD sector.
It said it expects the EU’s decision to classify CBD as a narcotic to ‘likely be overturned’, which would reopen the novel foods pathway to full legal compliance for CBD products sold as food.
“With today’s ruling, CBD companies can expect a clearer route to achieving compliance across the EU. The harmonisation of cannabinoid regulations could finally become a reality,” it said.
“This is clearly an important decision for the European CBD industry,” said Adela Williams, Partner at Arnold & Porter, ACI’s legal counsel. “The EU’s highest court has decided that EU member states may not prohibit the marketing of CBD products lawfully supplied in other member states unless a real risk to public health has been demonstrated.”
The EC has said it will base its position based on the findings of the United Nations Commission on Narcotic Drugs, which will decide on 2 December whether to implement World Health Organisation recommendations to ease restrictions on cannabis and CBD.
The ACI is confident the decision will go in the CBD industry’s favour.
Williams said: “The European Court has confirmed that CBD should not be classified as a narcotic under the 1961 UN Convention on narcotics, removing an obstacle to the continued assessment of novel food applications relating to CBD products.”
The European Industrial Hemp Association said it was similarly optimistic. EIHA President Daniel Kruse said: "If the hemp industry keeps being proactive and comes up with safety assessments and standards, achieved by the EIHA Novel Food Joint Application, then the products will be legally marketable all over Europe in three years at the latest. The market growth will be extremely significant. The value of every Euro invested in the consortium will increase exponentially. This is a big day for the hemp industry, its entrepreneurs, operators, advocates and investors."
EIHA Managing Director Lorenza Romanese added: “EIHA welcomes the positive ruling of the ECJ as, at this stage, what the European hemp sector needs the most is a fair and coherent legal framework, once and for all. We truly hope that the position of the Court of Justice will set an example, and that the European Commission will review its preliminary conclusion on the status of natural CBD accordingly.”
Potential stumbling blocks
However, rulings regarding CBD in individual EU states may prove a headwind to the sector’s growth.
For example, a decree by Italy’s Ministry of Health added CBD to the country’s list of medicines, essentially giving it narcotic status in all applications -- although this decree was ultimately revoked last month.
According to the EIHA, the CJEU’s decision precludes national legislation and sets a binding precedent for the EU. “Its interpretation of EU law is binding at the European institutions level, including the European Commission – the key EU regulator – and other EU member states,” it told us.
However, according to Ellson, the CJEU ‘has left the door open’ for individual countries to justify banning the selling of CBD as long as the justification is on other grounds than it not being a narcotic.
An EU Spokesperson told FoodNavigator: “The Commission takes note of the Court’s ruling regarding the commercialisation of cannabidiol (CBD) and will carefully assess the judgement."