European Commission looks poised for missteps on hemp extracts

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Indicators from the European Commission could signal calamitous decisions are ahead for CBD operators across the continent, while at the same time the Commission is also likely to encourage restrictions at the international level.

After issuing a surprising “preliminary conclusion” last month that non-medical natural hemp extracts – frequently present in hemp food, food supplements and cosmetics — should be considered narcotics in the EU, stakeholders are also concerned about what the Commission will recommend to the 12 EU member states that will vote on cannabis and medical CBD issues at a critical meeting of the United Nations Commission on Narcotic Drugs (CND) Dec. 2, 2020 in Vienna.

First of all, if the EC’s “preliminary decision” becomes permanent across the EU, it will throw the sectors that use CBD, the leading hemp extract, into chaos. By halting Novel Foods applications as it considers its position, the Commission has already caused headaches for market participants. The EC said the stoppage is a step in the process of providing EU member states clear guidance on hemp extracts, noting ominously that “the Commission’s preliminary view is that CBD extracted from the flowering and fruiting tops of the hemp plant should be considered as a narcotic under the United Nations Single Convention.”

Fundamental argument

As European stakeholders push back against the red lights flashing at the EC, taking their case to EU member state representatives and national lawmakers, their arguments start (and should end) with the fact that hemp and its downstream products are clearly and explicitly not subject to international drug controls under the United Nations treaties nor in the supplementary protocols of 1972.

European CBD stakeholders point out that the 1961 United Nations Convention on Narcotic Drugs addresses only illicit farming and trafficking of psychoactive high-THC cannabis, which industrial hemp is not.

Additionally, Articles 2(9) and 28 of the Convention specifically exempt hemp from the scope of international narcotics controls; that exemption extends to the use of all “drug” compounds present in industrial, non-medical applications. In other words, as long as the flowering and fruit-bearing tops of the plant are not used to obtain high-CBD medicines, but only non-intoxicating products, they are not covered by the provisions of the Single Convention – which serves as guidance only in the medical sector, and not the food or cosmetics sectors.

Separate the compounds

“Besides their confusion between food and cosmetics, and medicines, another gap in the EC’s interpretation of the Conventions is that it forgets that the whole is different from the sum of its parts. Cannabis tops is a gestalt under control, and CBD, when part of cannabis, is also under control,” said consultant and researcher Kenzi Riboulet-Zemouli, who tracks cannabis policy worldwide.

“But when the compounds are separated, only the compounds listed in the Schedules remain under control,” Riboulet-Zemouli said. “Once separated, THC is controlled, but CBD, CBC, CBG, chlorophylle and all other components of cannabis that are not listed in the Schedules, are not under control.”

In bolstering their arguments, CBD stakeholders also point to a recent statement from an adviser to the European Court of Justice that CBD should not be considered a narcotic under French law, correctly citing the 1961 Single Convention. Nor should it be prohibited from trade among EU member states, the adviser importantly noted.

How the EC works

As the EC decision-making apparatus moves forward, any “final decision” regarding the legal status of CBD in Europe will be guided in part by the Horizontal Working Party on Drugs (HDG), a coordination body responsible for managing the EU Council of Ministers’ work on narcotics. HDG, where all member states discuss drug-related issues, prepares all legislation and political documents adopted by the Council, such as EU strategies and action plans.

Importantly, member state governments, via HDG, also have input to European Commission statements on drug issues destined for international bodies such as the UN CND, which at its December meeting is to consider two CBD-specific proposals related to medical and research applications, among other cannabis issues. Here again, it appears the Commission is headed down a potentially destructive path.

Recommendations imminent

Ahead of the CND meeting, the EC is reported to be preparing recommendations in response to proposals that would 1) remove extracts and tinctures of cannabis from Schedule I of the 1961 convention and 2) free “preparations containing predominantly cannabidiol (CBD) and not more than 0.2 percent of delta-9-tetrahydrocannabinol” from international control.

The proposals, by the World Health Organization’s (WHO) 41st Expert Committee on Drug Dependence (ECDD), are wholly unrelated to regulations governing natural hemp extracts in food and cosmetics; CBD only falls under CND provenance in the context of medical or research applications.

Negative signals

The European Commission has said it will prepare its recommendations regarding the ECDD proposals in time to be adopted by the EU Council of Ministers ahead of the CND vote in December. Twelve European countries are among a total of 53 nations who have voting seats at the CND: Austria, Belgium, Croatia, Czech Republic, France, Germany, Hungary, Italy, Netherlands, Poland, Spain and Sweden.

It’s unclear precisely what the European Commission will ultimately recommend to its voting members at the CND, but an earlier proposal had advised against the ECDD’s guidance that would remove restrictions on CBD.

While CND has repeatedly delayed its decision making on cannabis, some of the 53 voting member states in the Committee remain staunchly opposed to rescheduling cannabis in any way. Sources reported that a closed-door session of the CND held in June did not provide positive signals. Two more closed-door meetings are planned before a final session in September, when member countries and stakeholders can make their arguments. That meeting will also be open to non-governmental organizations and the press.

What will happen?

If the European Commission continues to wander misguided, and designates CBD and other extracts as narcotics in Europe, what will happen?

In the mid-term, companies affected will begin to offload as much product as possible. The grey market will go further underground. Product quality will suffer, heightening consumer safety concerns. Over time, European operators will be forced into the increasingly competitive export markets. At the end of the day, CBD could become a Big Pharma-only proposition, if Big Pharma doesn’t just kill it altogether.

Relegating hemp extracts to narcotics status would obliterate the dynamic CBD category, which has spearheaded the resurgence of industrial hemp around the world. Along the way, Europe will miss out on a growing new market that could reach €13.6 billion on the continent by 2025, according to a recent estimate by U.S.-based New Frontier Data, a researcher.

Killing incentive

While CBD has suffered the usual ups and downs of any industry at inception, it has led all hemp sub-sectors in commerce, attracting investment and, most importantly, leading to increased awareness and valorization of the industrial hemp plant for all of its promise. 

For all its lip service about the European Green Deal, Europe will be killing the most promising of hemp’s outputs, in the meantime crippling other hemp sectors that hold great potential in the transition to a zero-emission, bio-based economy. It will disincentivize the farmers, entrepreneurs and innovators who have contributed to the hemp sector’s growth through responsible, sustainable industry. 

Wrong club

Internationally, if the 12 European Member States who vote at the United Nations CND follow the Commission’s guidance, Europe will be taking a step backwards on the world stage, joining the likes of the most conservative and misinformed countries such as China, Russia, and many African nations, who cling to outdated restrictions as cannabis marches ahead all over the globe. That’s not a club in which a progressive Europe belongs.

Key agenda item: Rescheduling cannabis

In addition to CBD, the overriding matter on the CND’s agenda this Dec. 2 is the World Health Organization’s proposal to remove cannabis and cannabis resin from Schedule IV of the 1961 Single Convention, the most restrictive category – a change that would effectively, and finally, acknowledge the medicinal value of cannabis. Those materials would remain on the less-restrictive Schedule I.

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