One Member State cannot simply prohibit the sale of CBD legally produced in another Member State
While this prohibition may be aimed at protecting public health, it must not go beyond what is necessary to achieve that aim.
In an important judgment, the European Court of Justice concluded that legally produced cannabidiol (CBD) extracts cannot be classified as “narcotics” and can therefore in principle be freely traded within the EU (see judgment C-663/18, 19 November 2020) ).
The court’s ruling is part of a criminal lawsuit filed in France against distributors of e-cigarettes made from hemp oil containing cannabinoid CBD. The crux of the matter is that France banned the trade of CBD extracted from the whole cannabis plant, also known as “whole plant” or “full spectrum” CBD extract. After all, according to French law, only products made from hemp fibers and seeds may be used for commercial purposes.
Analysis of the Court
The court first pointed to a principle that drug traffickers cannot rely on the application of the European freedom of movement, because all Member States in principle prohibit such trade, except for trade that is strictly controlled for medical and scientific purposes. EU law refers to two United Nations conventions to define the term “drugs” or “narcotics”: (i) the Convention on Psychotropic Substances, and (ii) the Single Convention on Narcotic Drugs. CBD is not listed in the Convention on Psychotropic Substances. While it could be argued that CBD can be classified as a narcotic based on the literal interpretation of the Single Convention on Narcotic Drugs, the court ruled that – in the case of extracts – such a broad interpretation of the Convention would be contrary to the its general purpose and purpose to protect the mental and physical health of mankind.
The court pointed out that according to the current level of scientific knowledge, CBD has no mental and harmful effects on human health. This is in contrast to another cannabinoid, tetrahydrocannabinol (THC). The court added that in this particular case, the THC content of CBD oil was less than 0.2% and was legally produced and traded in the country of origin (Czech Republic). In light of this data, the court concluded that CBD extract is not an anesthetic. Therefore, the court ruled that the national trade ban on CBD is a prohibited measure and violates the basic principle of free movement of goods between Member States. However, the court ruled that as long as the Member States adhere to the principle of proportionality, it can be justified on the grounds of the public interest (for example to protect public health) to justify the national ban.
Legally produced CBD is not a narcotic and a national ban on its trade is in principle at odds with the fundamental European principle of free movement of goods between Member States. Rules restricting this free movement of goods are permitted only in so far as they are appropriate to ensure the achievement of the objective of protecting public health and do not go beyond what is strictly necessary to achieve this objective.