A ruling by an Italian court earlier this month represents a huge break for the country’s hemp and CBD industry. 

The decision made by the Lazio Regional Administrative Court on February 14 overturned what the panel deemed an “‘absurdly restrictive’ decree [that] meant hemp leaves and flowers were considered narcotics in the eyes of regulators.”

The upshot is that the decision “means that Italy’s national law now no longer contravenes the 2020 Kanavape ruling of the European Union’s Court of Justice (ECJ).”

In that ruling, the Court of Justice of the European Union “ruled that CBD is not a narcotic and that a member state cannot restrict the free movement of CBD products, and that CBD can be derived from the hemp flower.”

The decision by the Lazio administrative court earlier this month also means that Italy’s CBD and hemp industry, which led this court challenge, are now empowered to operate more freely, and without fear of regulatory meddling. 

BusinessCann has more background on the lawsuit that led to the February 14 ruling by the Lazio court:

“In May 2022, four grassroots cannabis industry associations – Canapa Sativa Italia, Sardinia Cannabis, Resilienza Italia Onlus and Federcanapa – filed an appeal against a Ministerial Decree issued in January 2022. The decree in question amended an earlier decree from 2018 regarding the cultivation, harvesting and processing of medicinal plants. Effectively, the 2022 amendment sought to place the cultivation, processing and marketing of ‘non-narcotic’ hemp flowers and leaves back under the umbrella of narcotics, meaning operators would be required to seek authorisation from the Ministry of Health, or face penalties.”

Recreational cannabis remains illegal in Italy, although it is decriminalized. 

An effort in Italy last year to legalize recreational pot was stymied on legal grounds, when the country’s Constitutional Court “rejected a request to hold a referendum on legalising the cultivation of cannabis, provoking the ire of promoters who called the decision a blow to democracy,” according to Reuters.

The proposed referendum “sought to legalise the growing of weed for personal use and ease sanctions on other cannabis-related crimes, with offenders no longer risking prison sentences for selling small amounts of the drug,” Reuters reported at the time, noting that the court’s president “said the referendum included other narcotics considered to be hard drugs, which could not be liberalised.”

Medical cannabis, however, is legal in Italy, and its production is the exclusive domain of the country’s military.

The Italian army has a directive to grow 700 kilograms, or a little more than 1,500 pounds, of medical marijuana this year as it acts as the chief overseer of the cultivation. 

Medical cannabis that is not grown domestically by the Italian army is typically imported from other European countries, such as the Netherlands, Germany, and Denmark. 

The army’s ramp-up of cannabis production is designed to make Italy’s medical marijuana program more self-sufficient.

“The next step is self-sufficiency — that’s our ambition,” Nicola Latorre, who leads the Italian agency overseeing the cannabis operation, told DefenseNews last month.

But this month’s ruling by the Lazio Regional Administrative Court could also have implications on that arrangement.

Cannabis industry representatives told BusinessCann that the Italian Ministry of Health has taken a more positive position toward the importation of cannabis-based products, a shift that suggests “that the Italian army’s monopoly on cultivation of medical cannabis in Italy, which has consistently been unable to supply enough product to meet demand, could soon be broken.”

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On Wednesday, Spanish authorities announced the destruction of 415,000 cannabis plants worth an estimated $108 million. Police claimed that this was a vital strike against Europe’s “largest cannabis plantation.”

Approximately 50 tons of plants were being dried in a warehouse in the rural region of Navarre. The plantation was spread over 166 acres of land. The owners are now facing criminal charges.

But here is where the story starts to get really strange.

The plants were all low THC hemp—a substance at least on the European level, which is no longer considered a “narcotic.” Even in Spain, the sale and consumption of CBD is legal.

Spanish Cultivation and Legality

This case is one of the stranger ones to hit headlines of late, precisely because it highlights the legal confusion over the status of cannabis and hemp across the E.U. However, it also goes to show why there is a dire need for not only European, but individual European country sovereign reform.

Legally, the cultivation of cannabis in Spain (including CBD) is only allowed when the cultivator is growing “industrial hemp.” Growing hemp for conversion into CBD remains a criminal offense. Indeed, Article 368 of the Spanish Criminal Code criminalizes the cultivation of cannabis when it promotes, favors, or facilitates the illegal consumption of “drugs” with a prison sentence of between 3-6 years.

However this case is a bit of a legal oddity. European law, which of course at this point Spain is out of compliance with, does not define hemp with more than .02% CBD as a narcotic. In this case, the farmer was apparently planning to export the dried plant to other countries for this extraction process.

Further, per the Kanavape case, companies are allowed to export hemp flower and low THC products across country lines for sale when legally produced in the country of origin —which would also seem to apply in this case as the farmer claimed that this is what he was doing. Apparently, even though the crop was designated as industrial hemp in Spain, the intent to export and then extract was what triggered the police action.

It will be interesting to see the development of this case.

The Dire Need for European Reform

It is precisely cases like this that underline the growing need for a regional approach to comprehensive cannabis reform. The problem seen in Spain (home, let’s not forget to non-profit cannabis clubs where high THC flower can be obtained), is one that is also showing up in other countries.

In Germany right now, importation of CBD can still result in legal action from overzealous prosecutors. In France, this was also true until the Kanavape case, which of course then went on to challenge E.U. law on the topic—and further set E.U. wide precedent that if hemp is legally produced in one member state, it can also be exported to another.

There is currently a case in Germany now pending in an attempt to bring German law into compliance with the E.U. on this matter.

This case, if properly defended, may well go on to set legal precedent about the same in Spain.

Until such matters are settled, however, working even in the CBD space in Europe remains a dangerous proposition.

It was, after all, less than a year ago that the German grocery retailer Lidl was actually raided by police in Munich for the “crime” of selling cookies and other products containing CBD.

In the Meantime…

The entire European cannabis industry is actually getting more hazardous, not less, even as reform begins to make headway in individual countries and E.U. wide policy on CBD is being set. This is even true in Holland, home of the coffeeshop, where there is a national trial underway to regulate the cultivation of cannabis, but the mayor of Amsterdam wants to ban tourists from the coffeeshops and close about two-thirds of them down.

In Germany right now, there are several hundred pending cases against legitimate businesses selling hemp—even as the new government has announced its intention to create a recreational market for high THC cannabis.

Beyond that, there are about 185,000 pending preliminary criminal proceedings across the country for recreational users who have been busted by the police for possession or even home-grow for personal consumption. These numbers also do not include patients, including those whose insurance companies have refused to cover medical cannabis despite such treatment being recommended by their doctors.

As the saying goes, it is always darkest before the dawn.

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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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