News Update Life Sciences

20 November 2020

On 19 November 2020, the Court of Justice of the European Union ("CJEU") issued a judgment in a preliminary reference procedure in the Kannavape case (C-663/18). In its judgment, the CJEU held that cannabidiol ("CBD") extracted from the whole hemp plant does not qualify as a narcotic drug and that, consequently, hemp-derived CBD can rely on the free-movement provisions of the Treaty on the Functioning of the European Union ("TFEU").

French prohibition on marketing hemp-derived CBD

The preliminary reference procedure emanates from criminal proceedings in France against the directors of a company marketing electronic cigarettes containing CBD. CBD is a compound extracted from the hemp plant. According to current scientific knowledge, CBD does not cause any psychotropic effects. French legislation prohibits marketing products derived from the whole hemp plant and restricts use of the plant to its fibre and seeds. In contrast, marketing synthetic CBD is not prohibited under French law.

Following the argument that the prohibition under French law is contrary to EU law, which was raised by the applicants in the main proceedings, the Court of Appeal of Aix-en-Provence made a preliminary reference to the CJEU. It asked whether the principle of free movement of goods can be interpreted as precluding legislation that limits cultivating, industrialising and marketing hemp solely to fibre and seeds and, in practice, bans the marketing of all hemp-derived CBD.

Hemp-derived CBD can rely on the free movement of goods

The CJEU ruled that the hemp-derived CBD at issue does not qualify as a narcotic drug because based on the information available to it the CBD has no scientifically proven psychotropic effect or any harmful effect on human health. In addition, the CJEU held that the CBD is not classified as a narcotic drug under international conventions and contrary to narcotic drugs the CBD at issue can rely on the freedom of movement provisions of the TFEU. Further, the CJEU held that the free movement of goods, as a fundamental principle of EU law, opposes national legislation which bans the importation or marketing of hemp-derived CBD. Although such restrictive measures can be justified, for example on grounds of protection of health and life of humans (as was argued by the French authorities), it is established case law that this is only possible if this measure is appropriate to attain the envisioned objective and does not go beyond what is necessary to reach it. According to the CJEU, a lawful justification for a marketing prohibition can only be provided if the risk alleged for public health appears sufficiently established on the basis of the latest scientific data available.

While the CJEU stresses that the domestic referring court should assess whether the restriction is justified, the CJEU provided some guidance by stating that (i) if synthetic CBD, which is chemically identical to hemp-derived CBD, remains allowed under the foreseen legislation, the measures will probably not be appropriate to protect public health and (ii) the position that hemp-derived CBD constitutes a real risk to public health justifying the restriction to the free movement of goods must be based on scientific data.

Implications

It follows from the CJEU judgment that Member States infringe EU law if their national legislation restricts the marketing of hemp-derived CBD without lawful justification. In national proceedings, national provisions that are contrary to EU law must be declared inapplicable by domestic courts. This not only applies to France but also to other EU Member States. For example, the Dutch legislation on narcotic drugs (Opiumwet) has comparable restrictions on CBD. It follows from the definitions of 'hemp' and 'hemp oil' in the Opiumwet that CBD extracted from hemp falls within the scope of the prohibition on selling or warehousing under the Opiumwet.

As emphasised by the CJEU, it is for domestic courts to assess the relevant restrictions and possible justifications. However, in view of today's publicly available scientific evidence, it is questionable whether prohibiting marketing of hemp-derived CBD, which constitutes the most restrictive restriction, can be justified. In this respect, it is relevant that the World Health Organisation has recommended that CBD not be internationally scheduled as a controlled substance, because CBD "does not have psychoactive properties and has no potential for abuse and no potential to produce dependence".

Finally, Member States that enforce national legislation contrary to EU law may face an infringement procedure by the Commission.

For more information about the legal framework applicable to CBD products in the Netherlands, please see our factsheet on CBD.