24 November 2020
Client Alert | EU | France | Competition & International Trade
In a ruling dated 19 November 2020, the European Court of Justice found that French CBD regulations are contrary to European Union law (CJEU C-663/18, 19 November 2020)
The standard rule under French law is the prohibition of the commercialization of cannabis. More specifically, Article R-5132-86 of the French Public Health Code provides for a general prohibition of all operations involving cannabis, and notably its importation, production, offering and use:
However, the same Article R-5132-86 of the French Public Health Code provides for an exception to the general rules prohibiting operations involving cannabis. Pursuant to the Decree dated 22 August 1990 implementing the exception to the above-mentioned general prohibition, the importation, exportation, growing and use of the seeds and fibers of specific varieties of Cannabis sativa L. (i.e., hemp plant) for industrial and commercial purposes are allowed if the following cumulative conditions are met:
In 2018, following the rapid expansion in the French market of new products presented as containing cannabidiol (“CBD” - a cannabinoid present in cannabis that does not produce psychotropic effects), a debate arose as to whether end products containing CBD obtained from authorized hemp varieties could contain THC levels below the 0.20% threshold.
The French authorities consequently clarified their approach;
The internal policy also states that CBD “is found mainly in the leaves and flowers of the plant, and not in the fiber and seeds. Consequently, as the applicable legislation stands, it does not appear possible to extract (CBD) under conditions consistent with the Public Health Code”.
As a result, it is particularly difficult for economic operators to market CBD-based products while complying with French regulations.
In 2018, the criminal court of Marseille sentenced two business owners for marketing an electronic cigarette whose liquid contained CBD produced in the Czech Republic using the entirety of an authorized variety of hemp, in violation of French regulations which only allow products derived from the seeds and fibers of authorized varieties.
The two business owners lodged an appeal against the ruling before Aix-en-Provence Court of Appeal arguing, in particular, that the prohibition on the marketing of CBD from the Cannabis sativa L. plant in its entirety does not comply with EU law.
The Court of Appeal of Aix-en-Provence, therefore, referred a preliminary question to the Court of Justice.
In essence, the question was whether the derogating provisions introduced by the Decree of August 22, 1990, limiting the growing of hemp, its industrial use and marketing, solely to fibres and seeds, were contrary to EU law and in particular to the principle of free movement of goods.
The Court of Justice answered this question positively in its ruling of 19 November 2020:
“ (…) the answer to the question referred is that Articles 34 and 36 TFEU must be interpreted as precluding national legislation which prohibits the marketing of CBD lawfully produced in another Member State when it is extracted from the Cannabis sativa plant in its entirety and not solely from its fiber and seeds, unless that legislation is appropriate for securing the attainment of the objective of protecting public health and does not go beyond what is necessary for that purpose. (…)” (§96 of the ruling).
Two conclusions can be inferred from this decision:
It is indeed unlikely that France will be able to justify this restriction by a public health objective since the Court of Justice noted in its ruling that, even obtained from leaves and flowers, “the CBD at issue in the main proceedings does not appear to have any psychotropic effect or any harmful effect on human health on the basis of available scientific data.” (§72 of the ruling).
Indeed, the maximum THC threshold of 0.20% set by European regulations, reproduced by the decree of August 22, 1990, applies to the plant and not to the end product.
Yet, it is indeed very difficult, not to say impossible, to obtain CBD free of all traces of THC. Imposing a maximum threshold of 0.20% THC in the end product amounts, in fact, to prohibiting the importation of CBD-based products, despite their being legally manufactured in other European Union Member States.
This restrictive approach of French authorities could therefore also be deemed to exceed what is necessary for the objective of protecting public health and contrary to European Union law, in particular to the principle of the free movement of goods.
 On October 23, 2020, the European Parliament adopted an amendment to a Commission’s proposal for a regulation on strategic plans under the CAP (2018/0216 COD). This amendment raises the THC limit in authorized varieties of hemp to 0.30%. The text as amended must now be discussed within the Council of the European Union.
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The lawyers of Gide's Competition & International Trade practice group are available to answer any questions you may have in this regard. You may also get in touch with your usual contact at the firm.
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