On the 19th of November 2020, the European Court of Justice was confronted with a refreshing case arising from the increased popularity of the marketing of Cannabidiol oil (“CBD”). In France, criminal proceedings were instituted against B S and C A, because of illegal marketing of CBD derived from the cannabis sativa plant, other than its seeds and fibre.[1]

The judgment 

B C and C A are the former directors of Catlab SAS who marketed Kanavape, an electronic cigarette with CBD oil lawfully produced in the Czech Republic and distributed via the internet.[2] The production of the CBD derived from the cannabis sativa plant in its entirety. According to French law, the marketing of a product, derived from parts of the cannabis sativa plant other than its seeds and fibre, is prohibited.[3]

Is this provision compatible with EU laws on free movement of goods?

Firstly, the ECJ addressed the issue of whether the CBD was to be considered a narcotic drug, as this would exclude the reliance of the applicants from free movement provisions. By relying on its precedent Josemans, the Court clarified that there is a general prohibition of marketing narcotic drugs within the internal market, with the exception of strictly controlled channels of trade for medical and scientific use.[4] Accordingly, CBD could not be classified as a narcotic drug, as it does not produce any psychotropic or harmful effect, as well as the tetrahydrocannabinol content (“THC”) did not exceed the 0.2% limit, provided for in the Single Convention. Since the French ban would not accomplish the objectives of the Single Convention, namely the duty to prevent and combat drug addiction, the Court concluded it should not qualify as a narcotic drug.[5]

Secondly, since the CBD was not classified as a narcotic drug, article 34 and 36 TFEU are indeed applicable to the French provision. Thus, CBD enjoys free movement and the French legislation prohibiting such movement must be justified considering article 36 TFEU. The French government tried to claim that the ban was justified by the protection of public health,[6] however the Court ruled that article 36 TFEU needs to be interpreted restrictively by considering international scientific research and if the product poses a genuine threat to public health.[7] Both the principle of proportionality and the precautionary principle play a role, but the latter only in case of uncertainty and it cannot be based on purely hypothetical considerations.[8] The French provision appeared not to be appropriate for attaining the objective of public health protection in a consistent and systematic manner, since the marketing of a synthetic CBD, for example, would not be affected by the provision.[9]

The effect of the judgment within the internal market                                                                                                 

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The ECJ’s ruling differentiating CBD from the definition of narcotic drug is of great relevance. It is consequential to the determination of CBD as a product that enjoys free movement within the internal market.[10] The ECJ ruled that in the current state of scientific knowledge, the CBD at issue has not any psychotropic or harmful effect as well as its THC content does not exceed the allowed amount of 0.2%.[11] Even though, a literal interpretation of the Single Convention would lead to the classification of CBD as a narcotic drug,[12] the ECJ considered more important looking at the purpose and objective of the Convention, namely protecting “duty to prevent and combat drug addiction.”[13] By turning away from the literal interpretation, the ECJ demonstrates to be flexible and accommodating to changes in current society, such as the increased popularity of CBD. Clearly, the ECJ shows a pro-CBD attitude in its judgment, as it did not even consider other options to the French ban of CBD, while the Advocate General Tanchev in its opinion proposed a less restrictive measure such as the establishment of a maximum level of CBD content.[14]

To begin with, this case will have widespread implications on the CBD industry and the internal market. CBD can now be released in economic and commercial channels of the European Union. Despite the fact that this case is referring to CBD oil in electronic cigarettes, it will have consequences for other products where CBD could be employed, such as food, pharmaceuticals or cosmetics. Moreover, the judgment could be seen as a step towards regulatory harmonization of CBD, as well as legal certainty for the CBD industry. Most importantly it may have direct implications for the French regulatory framework, and possibly for other member states’ frameworks with similar rules on CBD, which have now been deemed illegal.

[1] Order of 22 August 1990 Implementing Article R. 5132-86 of the Public Health Code in respect of Cannabis. 

[2] C-663/18, B S and C A (Commercialization du cannabidiol – CBD) [2020] §§28-29.

[3] Ibid §35. 

[4] C-137/09, Josemans [2010] §36-41.

[5] Ibid B S and C A (Commercialization du cannabidiol – CBD) §§66-67, §§71-76. Opinion of the Advocate General Tanchev in C-663/18, B S and C A (Commercialization du cannabidiol – CBD) [2020] §66-67 and §§73-76.

[6] Ibid B S and C A (Commercialization du cannabidiol – CBD) §§79-83 §§84-85.

[7] C-663/18, B S and C A (Commercialization du cannabidiol – CBD) [2020] §87.

[8] Ibid §91. Opinion of the Advocate General Tanchev in C-663/18, B S and C A (Commercialization du cannabidiol – CBD) [2020] §82. 

[9] Ibid B S and C A (Commercialization du cannabidiol – CBD) §94.

[10] Ibid §§76-78. The same reasoning by the ECJ can be seen in C-137/09, Josemans [2010] §36 and §42.

[11] Ibid B S and C A (Commercialization du cannabidiol – CBD) §72.

[12] CBD would be considered a ‘drug’ within the meaning of Schedule I and Article 1(1)(j) of the Single Convention, if the ECJ would have employed literal interpretation. See ibid §71.

[13] Ibid §§67.

[14] Opinion of the Advocate General Tanchev in C-663/18, B S and C A (Commercialization du cannabidiol – CBD) [2020] §85.