Arthur Cox: European Union: Marketing Of CBD Consumer Products In The EU Addressed By ECJ

The European Court of Justice recently ruled that an EU Member State cannot prohibit the marketing of CBD that has been lawfully produced in another Member State, as to do so would be in breach of EU law on the free movement of goods.

European Union: Marketing Of CBD Consumer Products In The EU Addressed By ECJ
Published  via the Mondaq platform at https://www.mondaq.com/ireland/cannabis-hemp/1015562/marketing-of-cbd-consumer-products-in-the-eu-addressed-by-ecj 11 December 2020
Authored By  Colin Kavanagh and Bridget McGrath
Arthur Cox

Colin Kavanagh

This ruling from the European Court of Justice (“ECJ”) is important in the context of ensuring that national legislation does not operate as a restriction on the trade of cannabidiol (“CBD”) consumer products in EU Member States. A prohibition on the marketing of CBD that has been lawfully produced in another Member State may however be justified for the protection of public health, but must not go beyond what is necessary in order to attain that objective. Background The ruling was made in relation to the marketing and distribution in France of Kanavape, an e-cigarette with CBD oil. The CBD oil cartridges were produced from organic hemp plants in the Czech Republic, where it is lawful to use the entire Cannabis Sativa plant in production. In France, only the fibre and seeds of the plants, which contain less than 0.2% of tetrahydrocannabidiol (“THC”), the psychoactive compound found in cannabis, may be put into commercial use. The CBD cartridges were then imported into France where Kanavape marketed and distributed them. In 2014, two of the directors of Kanavape were found guilty of marketing and distributing “poisonous substances”, including narcotic substances, in breach of French law.  During the course of the French investigation into the products, the Kanavape CBD when tested always indicated a THC level lower than the legally permitted threshold under French law. The question referred to the ECJ On appeal, the ECJ was asked to consider whether national legislation prohibiting the marketing of CBD products produced lawfully in another Member State from the entire Cannabis Sativa plant was in contravention of EU principles on the free movement of goods under Articles 34 and 36 in the Treaty of the Functioning of the European Union (“TFEU”). ECJ ruling The ECJ held that French law is inconsistent with the provisions on the free movement of goods within the EU as it restricted the trade of a lawfully produced product from another Member State. The ECJ noted that CBD, “…does not appear to have any psychotropic effect or any harmful effect on human health”  and defining CBD as “a narcotic drug” would breach the spirit of the existing UN Convention frameworks on narcotic drugs. Exemption The ECJ discussed the exemption to the prohibition of measures restricting the free movement of goods for the objective of protecting a public interest. In this case, the ECJ noted that restrictions may be made on the basis of public health if the legislation is appropriate for securing the attainment of the objective and does not go beyond what is necessary in order to attain it. The case reference is C‑663/18 and the full judgment is accessible  here. This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

JUDGMENT OF THE COURT (Fourth Chamber)

19 November 2020 (*)

(Reference for a preliminary ruling – Free movement of goods – Common organisation of the markets in the flax and hemp sector – Exceptions – Protection of public health – National legislation limiting the industrialisation and marketing of hemp solely to fibre and seeds – Cannabidiol (CBD))

In Case C‑663/18,

REQUEST for a preliminary ruling under Article 267 TFEU from the Cour d’appel d’Aix-en-Provence (Court of Appeal, Aix-en-Provence, France), made by decision of 23 October 2018, received at the Court on 23 October 2018, in the criminal proceedings against

B S,

C A

intervening parties:

Ministère public,

Conseil national de l’ordre des pharmaciens,

THE COURT (Fourth Chamber),

composed of M. Vilaras, President of the Chamber, N. Piçarra, D. Šváby, S. Rodin (Rapporteur) and K. Jürimäe, Judges,

Advocate General: E. Tanchev,

Registrar: V. Giacobbo, Administrator,

having regard to the written procedure and further to the hearing on 23 October 2019,

after considering the observations submitted on behalf of:

–        B S, by X. Pizarro and I. Metton, avocats,

–        C A, by E. van Keymeulen, M. De Vallois, A. Vey and L.‑M. De Roux, avocats,

–        the French Government, by A.‑L. Desjonquères and C. Mosser and by R. Coesme, acting as Agents,

–        the Greek Government, by G. Kanellopoulos and by A. Vasilopoulou, acting as Agents,

–        the European Commission, by A. Lewis, M. Huttunen and M. Kaduczak, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 14 May 2020,

gives the following

Judgment

1        This request for a preliminary ruling concerns the interpretation of Articles 34 and 36 TFEU, of Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009 (OJ 2013 L 347, p. 608), and of Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (OJ 2013 L 347, p. 671).

2        The request has been made in the context of criminal proceedings instituted in France against B S and C A, in relation to the marketing and distribution of a hemp oil electronic cigarette.

 Legal context

 International law

 The HS and the HS Explanatory Notes

–       The HS

3        The Customs Cooperation Council, now the World Customs Organization (WCO), was established by the Convention establishing a Customs Cooperation Council, concluded in Brussels on 15 December 1950. The Harmonised Commodity Description and Coding System (‘the HS’) was drawn up by the WCO and established by the International Convention on the Harmonised Commodity Description and Coding System, concluded in Brussels on 14 June 1983 and approved, with its amending protocol of 24 June 1986, on behalf of the European Economic Community by Council Decision 87/369/EEC of 7 April 1987 (OJ 1987 L 198, p. 1) (‘the HS Convention’).

4        Heading 29.32 of the HS Convention, which is contained in Chapter 29 thereof, entitled ‘Organic chemicals’, is worded as follows: