If anyone thought that the road to cannabis reform was going to be easy, a decision last week in Cologne, Germany has just confirmed the fact that this is going to be a prolonged battle, fought all the way with regressive skirmishes and undoubtedly, setbacks.

Here is the latest example. Shockingly, the Administrative Court in Cologne has just ruled that the legal classification of CBD drops (i.e. good old CBD extract) are medical products. As such, they must be approved by the Federal Institute for Drugs and Medical Devices (BfArM)—Germany’s version of the American Food and Drug Administration (or FDA).

The court’s logic on this ruling is that the nutritional value of CBD is still an unknown. Further as outlined in the legal decision, the plaintiff company could not prove that there were comparable products on the market or that CBD might be used as a part of a diet rather than medical regime. The plaintiff’s suggestion that hemp tea might serve as one example was dismissed as the court maintained that cannabis tea is subject to narcotics law—thanks to the indecisive ruling on this in 2021.

The timing of this case, not to mention the finding of the court is also telling. It could potentially throw the entire German CBD business back to the dark ages—even though this is just a state-level, not a federal ruling. Walk into every health food store, not to mention the growing number of CBD specialty shops in Germany, and it is possible to find CBD oil, of various concentrations, on the shelves.

According to Kai-Friedrich Niermann, a leading cannabis attorney in Germany, “The ruling of the Cologne Administrative Court poses a significant risk to the CBD market in Germany if further authorities and courts refer to BfArM and the ruling.”

The case, which was brought by a company with two different CBD oils on offer, was filed against the 2019 BfArM finding that such products “should be” medicinal products because CBD has a “pharmacological effect.”

This is of course, in contradiction to the 2020 ruling of the European Court of Justice that CBD is not a narcotic.

The company now must file an application to appeal the verdict.

The Fight for Cannabis Reform in Germany’s Largest State

This case is a bellwether legal showdown. It clearly shows how schizophrenic the laws around both CBD and cannabis are in Germany right now, not to mention how political cannabis reform—even of the CBD variety—is.  North Rhein-Westphalia, in which Cologne sits, is Germany’s most populous state. It is also the seat of the HQ of BfArM.

What this decision does, in effect, is uphold BfArM’s 2019 decision about CBD, which also occurred before the EU level decision at the Court of Justice. But it also does more than this. According to Niermann, “BfArM and the Cologne Administrative Court contradict the established case law of the European Court of Justice, which requires a significance threshold for the distinction between foodstuffs and medicinal products with regard to the pharmacological effect.”

Further, the case smacks of political interference at a time when the federal government is delaying full recreational reform. All the court has done is merely confirmed the opinion of BfArM.

However, there is a silver lining.

According to Niermann, “The decision is also likely to be difficult to reconcile with other European law. The ongoing applications to the European Commission for approval of various CBD ingredients as novel foods show that the Commission and member states have a problem with the novelty of the ingredients, but not with the pharmacological effect. At minimum, the principle of free movement of goods should then once again ensure the marketability of CBD in Germany, at least for foreign EU products.”

The Backlash Against Legalization in Germany

While any patient will tell you that CBD can have medicinal effects, the problem now before the legal system in Germany (and unlikely to magically just disappear upon the advent of THC legalization), is what cannabinoids actually are. The fight over CBD of course is what will continue to prompt such cases—for now. Look for even more convoluted decisions after “federal legalization” that includes THC.

This is, of course, because cannabis of both the CBD and THC kind can be used both “medically”—namely via prescription of a doctor—and non-medically. In the case of CBD, this means that over the counter products will now fall under the rubric of the medicines agency until this new ruling is challenged.

It also seems to indicate that unless there is a federal decision about cannabis as a plant, as well as its best-known extracts, these issues will show up repeatedly, in court.

The unhappy producer is currently facing 100,000 euros in fines. However, they will undoubtedly appeal. If there was ever a legal “straw man” to be knocked down, the precedent set in this case is certainly one of them.

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As with many things in the cannabis revolution, there are moments when achieved reform or market creation feels bittersweet. Certainly, most within this industry, having attained a hard fought and well-deserved, even litigated, or legislative victory have also had the experience of realizing that such a development is both a step forward but also two back. 

Thus is the case in France right now.

On one hand, the order by the French Ministry of Solidarity and Health, issued on December 30, 2021, implementing Article R.5132-86 of the Public Health Code is a victory for the industry. In direct response to the KanaVape case, where the European Court of Justice decreed that imported CBD sold in France (and produced elsewhere in the European Union (EU)) was legal and by extension that the cannabinoid was not a narcotic, the French government has essentially enshrined an EU decision into French law.

Namely, that CBD can be sold and further that it is clearly not a narcotic.

However, it is what forms that cannabis could be available to consumers that are creating consternation if not a direct rebellion from some in the industry.

The Basics

Here is what the new order does. It legalizes the CBD industry and products. Here is the bad news. It specifically bans the retail sale of cannabis flower. This includes the smokable and tea varieties.

The positives? This development means that the purveyors of any CBD containing product that has been certified in the required regulatory pathways are finally in a position where there is a legal market for their products. 

No French police raids on grocery stores for CBD cookies loom in the horizon as a result. 

Merci beaucoup.

On the other hand, here is the merde a la mode.

The order is devastating to hemp producers and small stores who sell flower and products that contain the same (like hemp tea). While the legal limit for THC in hemp was also raised (from 0.02 percent to 0.03 percent), this means that cultivators must rely only on B2B sales to those who will further transform (usually extract) the CBD for use in other products (from cosmetics to food).

The new order also does not move CBD out of the Novel Food category. This could also be a ripe territory for legal challenges, particularly for CBD cultivated in France itself. However, given the blow just directed in the direction of the French cultivation industry, a by-product of this decision could very well move cultivation of even hemp outside the country’s borders.

A Whimper Rather than a Bang

The bottom line is that this development is hardly a French Revolution on CBD. Further it may well be a cynical move by French President Emmanuel Macron, who as of January 1 took over the next six month tenure as the President of the EU on his way to facing national voters in the near future. Namely, inch a conversation which is much despised at the nosebleed level of European politics only as far forward as absolutely necessary.

Indeed, this kind of unfortunate mindset is still much in keeping with the general attitude about cannabis cultivation, even of the medical kind, in Europe. Politicians in Germany were so opposed to legalizing home grow that they banned even registered German pharmaceutical firms from participating in the country’s first cultivation bid for the regulated pharmaceutical market. Beyond that, there are still many questions still open on the hemp side of the conversation.

It is trickle down reform and of course, as a result, will be fought, again, in court.

The Industry Strikes Back?

On January 3, industry groups including the hemp union and the trade association of CBD sellers, the Union des Professionals du CBD, for whom flower sales can represent as much as 80 percent of their business, issued a challenge to the new order. They are asking the government to suspend the same because at an EU level, there is no distinction between flower and extract. The application was submitted to the highest administrative court in France—the Council of State. It has so far not been rejected (meaning that the court could side with the industry).

Indeed, many on the ground feel that this is just another way of setting back the industry if not reform itself—and further apparently fairly similarly at the nosebleed level of European politics. For example, the discussion about the sales of both flower and CBD containing products has also been contentious in places like Germany (which has seen both police and court action against firms selling either or). In the UK, the sale of the same is explicitly banned. 

Yet this is not the trend in Europe. In most places, although not explicitly stated as such as in Belgium and Luxembourg, CBD flower is more or less treated like tobacco. In both Malta and Italy, home grow is also now explicitly allowed—even if just of the hemp variety. Indeed, that is one of the more intriguing aspects still outstanding of the KanaVape case (namely that the imported extract at the centre of all the hullabaloo was for inhalation). 

Obviously, since 2017 in Germany, there are very clearly medical flower sales that are smoked by patients and nobody is talking (yet) about removing flower from the high THC, adult-use market, coming hopefully now sooner than later aus Deutschland. There is also no guarantee that those patients now participating in French trials are only consuming their dispensed flower by approved medical vape.

Regardless, no matter the hypocrisies and inconsistencies, on both the smoking argument, and of course the perennial pushback from the police (on issues from not being able to tell the difference on the street, to driving issues), these are the issues much in the room across the European discussion right now. This newest development in France is no exception.

Further, the underlying assumption being made about even CBD flower is also highly significant. Not only does it rule out the opportunity of consumers and patients to make their own products using extraction methods, but it also continues to categorize all cannabis flowers in a highly harmful category.

This is concerning for two reasons. The first, obviously, is that this is potentially a major blow to the hemp industry in France, an industry with about $180 million in sales last year. More worryingly, it may also have an impact far beyond French borders. European countries are looking to each other to figure out a pathway to legalization that can be both accepted and implemented given the current state of international regulations on cannabis. Namely the still unchanged classification of cannabis and cannabinoids by the UN as a Schedule I drug.

Indeed, the many wrinkles in the path towards even CBD legalization seen in France, among other EU countries, are just a small precursor to the now looming fight over THC.

It is for all these reasons that the hemp industry at both the French and increasingly European level is watching this case actively, if not preparing strategies on how to fight back not only on the ground in France, but use similar tactics unleashed locally in every sovereign nation in Europe.

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