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Cannabis Sees Major Developments Around the World this Week


This week brings major developments for the world-wide cannabis industry, in the EU and the US in particular. We would like to give a run-down of what is what, why it might be important, and where it might lead.

 

It is important to note that all of the international developments, in one way or another, revolve around the UN’s 1961 Convention on Narcotic Drugs, where cannabis sat for years on the strictest schedule. All of the developments, while having only small effects on actual policy implementation overall, are major victories for cannabis in the overall conversation about its safety and value as a medicinal product, in CBD and flower forms.

First we should note that today Congress will be voting on the MORE Act (it may have already been voted on by the time you read this!) in an absolutely historic vote. It will remove cannabis from the Controlled Substances Act, in addition to a host of other measures. This historic vote will then have to go through the GOP controlled Senate, where things are totally up in the air – it all depends on who takes (or keeps the Senate) after Georgia’s January run off races. However, regardless of this, if Congress passes the MORE Act, it will be historic for showing that it can be done, and will be done again in the future.


 

European Union Developments and General Context

 

This week, the European Commission (EC) revived novel food application processes for CBD products, which they paused this July. The EC paused these applications after they preliminarily ruled that based on a strict reading of the 1961 UN Single Convention on Narcotic Drugs, which bans cannabis extracts as narcotics, CBD should also be considered a narcotic.

One thing to remember for those in the hemp-CBD business is the importance of novel food regulations, as CBD is considered a “novel food.” This lengthy, pricey process is a crucial aspect of gaining proper entrance to the EU market and will continue to operate this way. See some recent analysis of ours for more insights on the novel food process here.

The reversal has given Europe’s CBD industry stakeholders room to breathe a massive sigh of relief, as the narcotic ruling would have essentially killed the industry before it could take flight. For instance, French groups argued that such a categorization would “jeopardize investments in the valuation of hemp fibres and straw for … building materials, textiles, paper, plastics and biocomposites” and would “condemn the ‘wellness’ hemp market.”

The EC’s landmark reversal was likely influenced by another historic decision. Weeks ago, the Court of Justice of the European Union (CJEU), Europe’s highest court, ruled that CBD derived from any part of the hemp plant should not be considered a narcotic, despite the 1961 Convention. As the CJEU has legal supremacy over the courts of European member-states, no European state can ban the sale of hemp-derived CBD, as doing so would violate free-movement principles of EU trade.

EU drug law is based on the 1961 Convention, which set a definition for narcotics, while any “psychotropic” substance (which alters your brain activity) as anything defined under The Convention on Psychotropic Substances, 1971. However, when it was written, there was no science or clarification about various extracts, so CBD was of course lumped in with everything else.

But the CJEU simply said there is no evidence yet that CBD is psychotropic in this manner, and therefore should not count. So, while the judges acknowledged that a “literal” reading of the UN Convention would lead to a ban on CBD strictly as a “cannabis extract,” knowing that there is no psychotropic effect according to contemporary science, it goes against the spirit of the 1961 Convention – to protect peoples’ health – to label CBD a narcotic.

Accessing the now-revived European CBD market is also going to get slightly easier. Recently, the EU Parliament changed the EU's Common Agricultural Policy (CAP), voting to raise the THC limit for industrial hemp from 0.2% to 0.3%, and to allow hemp and hemp-derived products to be subject to European Union marketing standards. Before this, all hemp grown in the EU had to be grown from seeds with a THC content below 0.2%, and products had to be taken from such hemp. Changes will affect technical definitions, labeling, packaging, substances, and methods used in production and farming, in addition to other aspects. Regarding the market, the CAP is related to quality schemes for agricultural products and foodstuffs. This will make market access easier for American importers of hemp products as well.

Generally, the industry still needs to wait for EU government bodies to smooth out the kinks of intra-EU industry regulation, but when it does so the market will be massive.

The EU is a major potential market, and every non-EU country with a cannabis-related market wants to export to the EU. According to Grand View Research, the European hemp-CBD market is poised to grow 400% by 2025.

However, this all may be too late to allow the internal EU CBD market to develop strength to fend off outside competitors. Daniel Kruse, President of the European Industrial Hemp Association (EIHA), has said that “The isolate market is already gone for European producers,” and “The latest development regarding the THC increase to 0.3% came far too late. There is no chance for Europe to catch up with isolate production in the short-term.”

With this decision, the EU is catching up to where Great Britain is on CBD – as the British have left the EU, they also rejected the EC’s preliminary ruling on CBD and continued their own novel food processes as normal. While not a part of the EU anymore, Britain will be a major player in Europe’s CBD market just as well, seizing on its advantage in experience.

Meanwhile, China, the US, and other big players in the hemp-CBD industry will also target these markets heavily for exports.


 

Recreational and Medical Cannabis

 

The European recreational and medical cannabis regulations vary by member state, just like everything else. Medical marijuana is legal in some form in Belgium, Croatia, Czechia, Estonia, Finland, France, Germany, Italy, Ireland, Macedonia, Malta, and Spain. Germany’s market is the largest in Europe, while France is also opening a medical marijuana trial program to start next year, and will need to get all of its cannabis from other countries.

Even import and export regulations in practice can be surprising, but also signal a need for consistency and a smoothing out of regulations. For example, Uruguayan medical marijuana was sent to Germany, but only needed to be processed in a GMP certified facility in Portugal, so it entered the EU before getting certified – which was a shock to some. This may have a bearing on the precedents for medical marijuana trade from “third countries” to EU member states. The European Commission, the EU’s executive body, will not be discussing medical cannabis regulations this year as expected.

Countries aiming to export to the EU in some capacity would be Israel, the US, Uruguay and others looking to export medical marijuana to countries with medical marijuana programs (such as Germany, and most recently France).


 

The UN Vote

 

Lastly, the UN Committee on Narcotic Drugs just passed a landmark vote on December 2nd which removes cannabis from the strictest schedule in the 1961 Convention: Schedule IV. Many EU countries voted “yes” (besides Hungary) to remove cannabis and cannabis resin from the strictest schedule on the 1961 UN Drug Convention, which could have a positive impact on medicinal cannabis and research.

From: IDPC

It also signals that the conversation is shifting. Individual countries are still able to control how they consider cannabis, but because many countries look to these standards for guidance, this acknowledgement that cannabis is not as dangerous as people thought when the Convention was written decades ago. The 1961 Schedules are also muddled and confusing, with Schedules III and IV inside schedules I and II, and they have specific rules to them. Cannabis was removed from Schedule IV, but stayed within Schedule I, as Schedule IV is a stricter subset of Schedule I. Substances are added to Schedule IV if they are “particularly liable to abuse and produce ill-effects.” Since Cannabis has been removed from Schedule IV but will stay in Schedule I, this victory is more symbolic than a tectonic shift. The tectonic shifts may come later.

From “For Alternative Approaches to Addiction Think & do Tank,” Crimson Paper 1. What was not passed was a measure to take CBD, and other extracts taken from cannabis with less than 0.2% THC, out of international control altogether. Most countries are not ready for that yet. The European Commission did not support this recommendation of the WHO, which would have opened up many avenues for CBD world-wide. Instead, the EC wants further assessment by WHO. 

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