In a landmark judgment on 19 November 2020, the CJEU ruled in Case C-663/18 that cannabidiol (“CBD”) is not a narcotic drug under the UN Conventions.  This is the case even where the CBD is derived from the whole cannabis plant.  The ruling provides clarity on the non-controlled status of CBD and the free movement of CBD products within the Union.  This is likely to have wide implications for the CBD industry.

Background:

The case concerned the marketing of an electronic cigarette containing CBD in France.  The directors of the company that marketed the e-cigarette, known commercially as “Kanavape”, were convicted of a criminal offence on the grounds that the CBD oil contained in the cigarettes’ cartridges was extracted from the whole hemp plant, including the leaves and flowers.  The CBD oil in Kanavape was imported into France from the Czech Republic, where the hemp was legitimately cultivated and the CBD extracted, then packaged.  However, French legislation restricts the cultivation, importation, exportation and industrial and commercial use of hemp solely to its fibre and seeds.  In practice, this amounts to a ban on the marketing of all products containing CBD in France.

The directors were sentenced to a suspended term of imprisonment and a substantial fine by the Criminal Court in Marseille, France.  They appealed to the Court of Appeal, Aix-en-Provence in France and this court questioned the conformity of the French law with EU law, in particular provisions on free movement of goods.

CJEU Ruling:

(1) CBD is not a “narcotic drug”

The CJEU considered whether CBD is a “narcotic drug” under EU law. Article 1(1) of the Council Framework Decision 2004/757 references two UN Conventions that must be considered to determine whether a substance is a narcotic drug.

(i) the United Nations Convention on Psychotropic Substances, 1971 –

The Court noted that CBD is not covered by this Convention.

(ii) the United Nations Single Convention on Narcotic Drugs, 1961 –

Schedule I of the Single Convention includes the drugs “cannabis, cannabis resin and cannabis extracts and tinctures”. Articles 1(1)(b) and (c) of the Single Convention define “cannabis” as “the flowering or fruiting tops of the cannabis plant (excluding the seeds and leaves when not accompanied by the tops) from which the resin has not been extracted, by whatever name they may be designated”, and “cannabis plant” as “any plant of the genus Cannabis”.

The CJEU noted that the CBD at issue was extracted from the Cannabis sativa plant in its entirety (i.e. not just the seeds and leaves) and a literal interpretation of the Single Convention might lead to a conclusion that the CBD constitutes a “cannabis extract” and thereby a narcotic drug.

However, the CJEU stated that such an interpretation would be contrary to the general spirit of the Single Convention, which is to protect the health and welfare of mankind. The Court stated that on the basis of current scientific knowledge (which must be considered) the CBD at issue “does not appear to have any psychotropic effect or any harmful effect on human health” (the Court also noted that cannabis variety from which the CBD was extracted was grown legally and has THC content not exceeding 0.2%). Therefore, the CBD at issue should not be considered a narcotic drug within the meaning of the Single Convention.

(2) Free movement of goods

As the CBD at issue was not a narcotic drug the CJEU found that the provisions on free movement of goods within the EU (Articles 34 and 36 TFEU) were applicable. The CJEU stated that the French prohibition on marketing of CBD was equivalent in effect to quantitative restrictions on imports, which are prohibited by Article 34. However, it is left to the French national courts to determine whether such a prohibition could be justified on the grounds of public interest set out in Article 36 (although the CJEU appeared sceptical as to whether this was the case).

Impact:

This CJEU ruling is likely to have wide implications for the CBD industry and assist removing certain regulatory hurdles for access to the Union market. For example, if the Commission follows the CJEU ruling, it may commence reviewing novel food applications for hemp-derived CBD products, which are currently paused due to the question whether CBD is a narcotic drug.