Author(s): IR Global, Ricardo dos Santos de Almeida Vieira, Bruno Weil, Margret Knitter, Kenji Kuroda, Kris Scicluna, John Wolfs, Thomas Curran, Duncan Manville and Brandi Balanda
Brasil - Ricardo dos Santos de Almeida Vieira - Partner, Barcellos Tucunduva Advogados
The legislation on cannabis in Brazil is federal, with no differences between states and cities. Therefore, we do not see banking risks as a problem in Brazil - unlike the US, for example.
The evolution of CBD research throughout the world has pushed Brazilian legislation to allow access to certain cannabis products, including the direct importation of industrialized cannabis-based products by the patients themselves, provided certain requirements are met.
Still, the process is bureaucratic and difficult to access for a large part of the population. In our opinion, there are no perspectives for the release of recreational use in the short term.
In any case, as this is a new market in Brazil, there are opportunities for investment in the medical cannabis market in Brazil.
France - Bruno Weil - WEIL & ASSOCIÉS
Legalisation of cannabis is a recurrent topic in France. The legal uncertainty regarding the marketing of CBD flowers has persisted for years. A decision by the Court of Justice of the European Union, dated 19 November 2020, invalidated France's prohibition to sell CBD products authorised in other European Member State where harmful effects on health could not be demonstrated, on the basis of the freedom of movement of goods.
In light of this decision and under the pressure from the changes underway in other European countries, legalisation of cannabis has reached a new milestone in France.
On 23 June 2021, the French Supreme Court ("Cour de cassation") stated that flowers legally produced in a European country cannot be banned in France.
A Decree dated 30th December 2021 extended the authorisation for cultivation, import, export, and industrial use of certain varieties of cannabis with a THC content of less than 0,3% in all parts of the plant.
However, and as mentioned in question 1, the sale to consumers of raw flowers or leaves is still prohibited. Many French association officially and publicly opposed these restrictions and requested the Highest French Administrative Court ("Conseil d'Etat") to cancel the further prohibition applicable to raw flowers and leaves. On 24 January 2022, the Conseil d'Etat decided to suspend the enforcement of the decree provisions related to the prohibition of sales to consumers, possession, and consumption of flowers and leaves in their raw state. The final decision has not been issued yet. Therefore, CBD stores and tobaccos had to stop selling raw flower and leaves from the beginning of this year.
Germany - Margret Knitter - SKW Schwarz Rechtsanwälte
Medical cannabis has only been legal since 2017 in Germany. Recreational cannabis is still illegal in Germany. However, the German coalition partners have agreed to introduce legislative proposals, which will govern how the intention "to legalize cannabis for recreational use" will be implemented. The regulatory requirements differ depending on the legal classification of the relevant product. The question of whether and how a product containing CBD can be legally placed on the market is essentially governed by the provisions of the BtMG, the Medicinal Products Act ("Arzneimittelgesetz" - AMG), if applicable the Medical Device Regulation (MDR) or the European and national regulations on foodstuffs and cosmetics.
With regard to the regulatory status of narcotics, reference is made to what was mentioned under item 1.
Products that qualify as finished medicinal products within the meaning of the AMG are generally subject to marketing authorization (see sect. 21 AMG). Without marketing authorization, finished medicinal products cannot be marketed. Any distribution without authorization is punishable by law. The authorization must be obtained from the BfArM or the European Medicines Agency (EMA). Furthermore, the manufacturer of the product requires inter alia a manufacturing authorization according to sect. 13 para. 1 sent. 1 AMG. This does not apply for extemporaneous mixtures prepared in pharmacies. The preparation of extemporaneous mixtures is subject to the Pharmacy Practice Order (Apothekenbetriebsordnung - ApBetrO).
If the product is a food, the placing on the market is governed by directly applicable Community Law, namely the Regulation (EC) No. 178/2002, the so-called General Food Law Regulation (Lebensmittelverordnung), as well as by some national German regulations, inter alia the German Food and Feed Code (Lebens- and Futtermittelgesetzbuch - LFGB), the Food Supplement Regulation (Nahrungsmittelergänzungsverordnung - NemV) as well as the European Regulation on Novel Foods (Neuartige Lebensmittel-Verordnung - NLV).
If the product is a cosmetic, the Regulation (EU) No 655/2013 and the Cosmetics Regulation (Kosmetikverordnung) is applicable.
Japan - Kenji Kuroda - Kuroda Law Offices
The current regulatory status in Japan is as follows, and adequate framework is not yet in place. CBD is not regulated as a substance.
However, the current Cannabis Control Act regulates cannabis products by focusing on the part of the cannabis plant rather than the ingredients contained therein, so almost all handling (including import/ export, possession, giving and receiving; this also includes application and reception for pharmaceutical products) of CBD products derived from the cannabis plant (including pharmaceuticals) is prohibited and offenders are punished, excepting those products where no regulated parts of the cannabis plant (parts other than mature stems or seeds) are used. Therefore, no pharmaceuticals derived from the cannabis plant (including Epidiolex) have been approved in Japan yet.
On the other hand, CBD products (including cannabis- derived products and chemically synthesized products) are actually regulated by focusing exclusively on the THC content, which partially deviates from the regulations set forth in law.
Specifically, when importing CBD products into Japan, documents showing not only that regulated parts of the cannabis plant are not used (or that they are chemically synthesized products), but the component analysis results for THC content must be submitted to the regulatory agency. In addition, the MHLW has announced that if THC is detected even in trace amounts in CBD products distributed in Japan, the product will be suspected of violating the Cannabis Control Act. In that case, the product may be forcibly discontinued or recalled, depending on the circumstances.
Currently, the MHLW is considering revisions to the relevant laws and regulations in view of promoting the appropriate use of cannabis and CBD, including lifting of the ban on medical cannabis and introducing cannabis regulations focusing on its component (THC) (instead of the part of the cannabis plant), and it is expected that the law will be revised next year at the earliest.
Malta - Kris Scicluna - AE Business Advisors
The cannabis legal framework in Malta is now one of the most progressive within the EU and beyond. That said, the situation created by the new law is not yet satisfactory and requires refinement. There is still too much scope for conflict between the obvious spirit of the law and the actual enforcement on the ground:
There still is uncertainty amongst public authorities, like the police, over what legally constitutes legal cannabis. Indeed, a petition has recently been presented to the Parliament of Malta urging lawmakers to amend Malta's year-old cannabis laws to explicitly exclude forms of cannabis that do not provide any 'high' from the threat of prosecution.
The situation came to a head with the arraignment last March (2022) of a medical doctor, Andrew Agius, who stands accused of importing and trafficking the drug after police seized CBD cannabis flowers from his clinic, a pain treatment centre, last February.
The case revolves around the interpretation of the abovementioned 2021 definition of CBD 'product' in the penal code.
When Agius was charged in court, prosecutors argued that the CBD flower they seized from his clinic is a narcotic and subject to seizure and prosecution.
Agius' lawyers, on the other hand, say that the flower in question contained less than 0.2% THC and is a CBD 'product', much like CBD oil, shampoo, or facial cream, which can all be sold without restrictions. The situation has led the petitioners to ask MPs to fix this legislative anomaly by explicitly excluding all CBD products, including flowers, leaves and resin, from the scope of criminal prosecution and to start a public discussion about business and agricultural opportunities concerning CBD and hemp products. Petitioners also refer to classifying CBD as a 'novel food', something the European Commission is in the process of doing after following the aforementioned CJEU judgement.
Netherlands - John Wolfs - Wolfs Advocaten
In light of the current discussion about whether or not (a product containing) CBD is considered to be a novel food under the EU Novel Food Regulation (Regulation 2015/2283), I have received many questions regarding the legal status of CBD products in the Netherlands.
With regard to the legal status and the risks for marketing resulting from the applicability of the Novel Food Regulation, it is important to note that a policy of tolerance applies with respect to CBD products in the Netherlands. In practice, law enforcement in the Netherlands is focused on the use of unauthorized medical claims. All the more reason to seek legal advice prior to making any claims about your CBD products. Despite the policy of tolerance, there are nevertheless certain risks associated with the marketing of CBD products.
In the Netherlands, the Dutch Food and Consumer Authority (known as the NVWA in short) is one of the supervisory authorities with regard to the compliance of Dutch food laws and European regulations with the aim of safeguarding human health. The NVWA has various enforcement instruments at its disposal. Depending on the seriousness of the violation, it can take corrective and sanctioning measures, including fines, penalties and seizure of products.
In the Dutch Manual on Novel Foods (published by the NVWA) it is stated that if the NVWA determines that novel foods are traded that are not included in the Union list an administrative fine will, in principle, be imposed.
US - Massachusetts - Thomas Curran - Curran Antonelli
In the Commonwealth of Massachusetts marijuana use by adults 21 years of age or older is legal both recreationally and medically. To buy medical-grade marijuana products patients with qualifying conditions must be approved by a physician, given a prescription for the use of medical marijuana, and an issued medical marijuana card must be presented before purchase. In order to promote safety, all purchasers of marijuana products from a retailer are required to show a government-issued ID and individuals can only have up to 1oz of marijuana on them when they are outside of the home. Additionally, using marijuana products in a public place is prohibited, as is driving while under the influence of marijuana products.
There are regulations for each step in the marijuana product sales process: commercial growers (cultivators), manufacturers, registered marijuana dispensaries or retail stores, and delivery. Each of these titles comes with their own licensing process that can quickly become costly - the annual licensing fee for a cultivator varies based on the size of the cultivator but can reach up to $50,000, the annual licensing fee for a manufacturing license is $10,000, the annual licensing fee for a dispensary license is $10,000, and the annual delivery licensing fee is $10,000. These fees help ensure that only well financed and legitimate marijuana businesses can sell to consumers.
It is important to note that municipalities and towns in Massachusetts can further regulate the use of marijuana products within their jurisdictions. Each jurisdiction can zone the adult use of marijuana and has the option to ban marijuana delivery within its borders.
Additionally, towns can restrict the number of allowed marijuana establishments and govern the time, place, and manner of the operating marijuana establishments. Marijuana sales come with an excise tax, standard sales tax, and an optional local tax, making the marijuana business profitable for the state and more well regulated.
US - Washington - Duncan Manville and Brandi Balanda - Savitt Bruce & Willey LLP
Under the federal Controlled Substances Act of 1970 (21 U.S.C. § 801 et seq.), cannabis is a Schedule I substance the possession and use of which is unlawful. Under Washington law, however, cannabis is broadly legal for medical use, and also for recreational use by adults. In 1998, the Medical Use of Cannabis Act (codified at RCW ch. 69.51A) made it legal for patients with qualifying medical conditions to use cannabis and to possess and grow it in small quantities. In 2012, Initiative 502 (codified at RCW chs. 69.50, 46.20, 46.61 and 46.04) legalized the recreational use of cannabis by adults, subject to purchase limits and other restrictions. There is, of course, considerable tension between federal laws making the production, sale, possession and use of cannabis illegal, and state laws and county and municipal ordinances legalizing and regulating these activities.
To date, the federal government has not cracked down on cannabis businesses or consumers acting in accordance with state law. But federal enforcement of the Controlled Substances Act remains a possibility. Indeed, in January 2018, then-U.S. Attorney General Jeff Sessions issued a memorandum rescinding a 2013 policy statement known as the "Cole Memo," which had given cannabis businesses some breathing room in jurisdictions where cannabis was legal under state law. The rescission of the Cole Memo signaled a return to a more hard-line approach to the enforcement of federal cannabis laws, although this has not translated to a material change in federal practice.
Of greater day-to-day significance to cannabis producers and retailers is the fact that many banks will not do business directly with them, either out of concern over possible federal government sanctions, or because of the additional regulatory burdens attendant to servicing the cannabis industry. Moreover, although some cannabis retailers claim to accept credit cards, the major credit card companies do not allow their cards to be used for cannabis purchases. As a result, cannabis remains basically a cash business in Washington, even for producers and retailers who are operating legally under state law.
To read additional questions from the publication 'Attracting Investor Interest: Will the cannabis industry be allowed to blossom?' click the following link: https://www.irglobal.com/publications/will-the-cannabis-industry-be-allowed-to-blossom/
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
