CANNABIDIOL OIL – THE EUROPEAN COURTS TO PROVIDE A VIEW
Criminal Proceedings against B S and C A
Case C-663/18
A case referred to the European Courts will provide a first glimpse into the place of the free movement of Cannabidiol (CBD) in the EU. Despite the case relating to e-cigarettes containing CBD oil, the case has implications for food law, which given the confusion in the broader retail market is of great interest.
The court is to provide a preliminary ruling regarding the provision in the free movement of goods, and the question asked is: “…whether those provisions must be interpreted as meaning that the derogating provisions introduced by the arrêté (Decree) of 22 August 1990, by limiting the cultivation, industrialisation and marketing of hemp solely to fibre and seeds, impose a restriction that is not in accordance with [EU] law.”
The following provides a brief review of the case, the related legislation and implications for the ruling likely to be published early 2020.
Background
Two Marseilles residents (BS and CA) launched an e-cigarette which used CBD oil sourced from the Czech Republic. The issue at hand related to the production of the oil from the whole plant. In France the Ministerial Decree only permits the cultivation, importation and commercial use of Cannabis Sativa L. verities if two conditions are met, namely delta-9-tetrahydrocannabinol (THC) not exceeding 0.2% and only fibres and seeds are used.
Therefore, the central debate from this case is crucial for the CBD market not only in France but across the EU. The debate is whether the national definitions of Cannabis Sativa L. (permissible use only if from fibres and seeds) and related restrictions of cultivation, import, export, and industrial and commercial use is compatible with European Union law (i.e. the free movement of goods).
French Legislation
It should be noted French legislation does not prohibit the sale of CBD, but because the law regulates the plant from which it is obtained (considered as a narcotic), then CBD is caught. The prohibition is extensive. It includes manufacture, manufacture, transport, import, export, possession, offering, cession, purchase or use of cannabis (including: 1. its plants and resins, products containing or derived from cannabis, its plants or resins. 2. tetrahydrocannabinols, except for delta-9-tetrahydrocannabinol, their esters, ethers, salts and their derivatives and products containing them).
Derogations from the above rules may be applied for with regards to research and control purposes and the production of derivatives with the permission of the Director-General of the National Agency for the Safety of Medicinal Products and Medicinal Products. The cultivation, import, export and industrial and commercial use of cannabis varieties that do not contain narcotic properties or products containing such varieties may be authorized, by the Director-General of the Agency, by order of the Ministers responsible for agriculture, customs, industry and health.
However, other than medicinal exemptions 'Article R.5181 of the Public Health Code for Cannabis (du code de la santé publique pour le cannabis) allows the cultivation, importation, exportation as well as the industrial and commercial use of Cannabis sativa L. varieties (fibers and seeds) meeting the following criteria are authorized within the meaning of Article 1:
• The delta-9-tetrahydrocannabinol content of these varieties is not greater than 0.20%;
• The determination of the delta-9-tetrahydrocannabinol content and the taking of samples for that determination shall be carried out according to the Community method provided for in the Annex.
The takeaway here is that in France only low THC Cannabis sativa of an authorised variety that uses only fibres and seeds are permissible for industrial commercialisation of hemp products including foods. However, 0.2% solely relates to the level in the plant and not in the finished product. This was made clear by the French Ministry of Justice in 2018 (23rd July 2019) in a statement on the exemptions in the Public Health Code.
In a number of parliamentary questions asked of ministers it was made clear that only products containing tetrahydrocannabinols and CBD that can be recognized as therapeutic are medicines authorized by the French National Agency for the Safety of Medicinal Products and Medicinal Products (L'Agence nationale de sécurité du médicament et des produits de santé or ANSM) or the European Commission on the basis of, safety and efficacy criteria (Ministry of Solidarity and Health, 15th Jan 2019).
European Law
In addition to discussion to follow the Treaty on the Functioning of the European Union (TFEU), hemp is a product covered by Regulation (EU) No 1308/2013 and as such is part of the general Common Agricultural Policy (CAP). This Regulation applies to hemp fibre, seeds and also raw processed hemp. Therefore, French legislation restricts the scope of the Common Organisation of the Markets (COM) as it limits the cultivation to only hemp fibre and seeds.
Also, Regulation (EU) No 182/20, Regulation (EU) No 1307/2013, Regulation (EC) No. 73/2009 and Regulation (EU) No 639/2014 establishes rules for direct payments to farmers under CAP (Regulation No 1782/2003), including clarifications on the cultivation of Cannabis. Regulation (EC) No. 73/2009, Article 39(1) states, “Areas used for the production of hemp shall only be eligible if the varieties used have a tetrahydrocannabinol content not exceeding 0.2 %.” Further provisions allow the Commission to develop delegated acts covering the use of only certified seeds, verification of THC contents when it comes to authorising grant payments.
Outside of legislation, there is case law governing the free movement of hemp. The Court has already considered the compatibility of national legislation prohibiting the cultivation and possession of cannabis within EU laws. Twice (C-462/01 & C-207/08) the Courts have held that national legislation prohibiting the cultivation and holding of industrial hemp is contrary to CAP. Of note, in these cases, the courts have ruled that the law already stipulates that the maximum content of THC in hemp eligible for community support shall not exceed 0.2%. Therefore, the risk to human health posed by THC has already been considered in the CMO (Para, 34 of C-462/01).
An essential difference in the current case is that unlike in C-462/01 & C-207/08, the present case involves no growers as such CAP subsidies would not apply, and the product is not industrial hemp but a derivative of Cannabis Sativa (i.e. cannabidiol).
As such we should consider the free movement of CDB rather than the free movement of hemp as it pertains to Article 34 and 36 of the TFEU.
Free movement of Cannabidiol (CBD)
The current case related to CBD obtained from hemp plants grown in the Czech Republic, which was grown in accordance with CAP rules. In addition, there is no dispute the limits of THC are not exceeded with reference to Article 32(6) of 1307/2013. Therefore, the hemp was lawfully grown, and thus the CBD was from a lawful source.
As such, the effect of the French legislation is a measure having an equivalent effect to a quantitative restriction which is prohibited under Article 34 of the TFEU. The fact that France considers such a product a potential drug is irrelevant as case-law states, “According to the Court' s case-law, goods taken across a frontier for the purposes of commercial transactions are subject to Article 30 of the Treaty, whatever the nature of those transactions…” (Case C-324/93, para 20).
Factors for further consideration in Free movement
There are other considerations for France to justify the restriction of the free movement under Article 36 of the TFEU. This includes “the protection of health and life of humans.” However, given the view of the 2018 opinion on CBD by the WHO Expert Committee on Drug Dependence, the safety or lack thereof may be difficult for France to challenge. It should be noted any such challenge must be justified and proportionate in its final measures issued by the State.
Other measures such as CBD being a medicine, or a novel food ingredient could have also been used but the case hinged on the classification as a controlled drug and that because the source material was not a fibre or seed, its sale should be prohibited. It would seem clear that France and its national legislation should be precluded in light of Article 34 of the TFEU.
Next Steps
The final hearing was at the end of October and we await a view from the courts, but even if a decision is that France unlawfully restricted the sale of this product, it will be up to the national courts to decide if the measures are proportionate and necessary to protect human health and life.
Note: There are some differences in the decisions before the Appeal and European courts, namely those related to customs duties, and we have ignored these in this review.
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