Contributed By Mackrell.Solicitors
The cannabis industry is broadly split into two halves: the partially regulated CBD wellness sector, and the fully regulated medical cannabis sector.
There is no single piece of legislation that directly governs cannabis in the UK; the laws and regulations that currently govern the practices in this jurisdiction are spread across numerous statutes.
The primary laws and regulations fall into three categories:
Controlled Drugs Legislation
The two primary pieces of legislation from which the overarching laws stem are the Misuse of Drugs Act 1971 (MDA 1971) and the Misuse of Drugs Regulations 2001 (MDR 2001). These two pieces of legislation classify cannabis and cannabis resin as a Class B, and Schedule 1 controlled substance, respectively – meaning that a licence from the Home Office is required for all activities involving the substance, from research to cultivation.
Aside from controlling the plant itself, these statutes also clarify that certain cannabinoids (compounds contained within the cannabis plant) are controlled. The omission of cannabidiol (CBD), among other minor cannabinoids from this list, has allowed for its use commercially and in the health and wellness space as there are no penalties for using, possessing or selling it.
On 1 November 2018, the UK legalised the use of medical cannabis through the rescheduling of certain types of medical cannabis product from Schedule 1 to Schedule 2. These Schedule 2 cannabis products are referred to as "cannabis-based products for medicinal use in humans" (CBPMs), and this meant that from 1 November 2018 there was a legal route for CBPMs to be prescribed by doctors on the General Medical Council (GMC) Specialist Register.
The result of the 2018 change in law was, however, somewhat of an anti-climax in its effect. Restrictive guidelines, together with the fact that the legislative change did not authorise general practitioners (ie, first port-of-call doctors operating within the UK National Health Service, the NHS) to issue initial prescriptions, has meant that only a handful of prescriptions for CBPMs have been issued on the NHS to date.
CBD Wellness Products: Class-Specific Legislation
CBD wellness products are subject to the same legislative framework that applies to consumable products generally.
Marketing the purported medical, nutritional or health benefits of a consumable product in the UK is regulated by transposed EU law, and the MHRA, which issues strict and very prescriptive guidance as to what may and may not be said, and this therefore applies to wellness products containing CBD.
As with other products, general product claims on CBD products are covered by the Consumer Products and Unfair Trading Regulations 2008 (CPUTR 2008).
"Novel food" rules also apply. The Novel Food Regulations ((EU) 2015/2283) (the NFR) defines a “novel food” to mean food that was not consumed by humans to a significant degree within the EU before 15 May 1997.
The NFR requires that novel foods be authorised at European Community level and provides an authorisation procedure by way of keeping a "Union List" (better known as the "Novel Foods Catalogue"). In January 2019, it was decided that the NFR reference to Cannabis Sativa L should be extended to include the entry of cannabinoids. Therefore, any cannabis extract intended for consumption would be considered a novel food and requires authorisation before it can be sold. Only hemp seed oil extracted using traditional cold compression methods are considered not novel and, consequently, authorisation is not required for these hemp seed products.
In England and Wales, the Food Standards Agency (FSA) regulates the food market. Since the Brexit transition period came to an end, from 1 January 2021 the FSA opened its doors to receiving NFR applications for food products intended for sale in England and Wales.
In England and Wales, CBD products have previously been sold without novel foods authorisation; accordingly, in February 2020 the FSA offered forbearance to businesses that were selling products on or before 13 February 2020, namely that such businesses must have a novel foods application submitted by 31 March 2021 and duly validated if they are to continue to sell while awaiting full authorisation; all other products will be removed from shelves until they obtain full authorisation.
This position was made clear by the FSA on 11 March 2021, when it announced that applications no longer needed to be "validated" but "submitted" by 31 March 2021. The FSA press release stated:
“The criteria for products which can remain on sale from 1 April 2021 has been updated. Previously, only products which were on sale at the time of the FSA’s announcement (13 February 2020) and were linked to an application which had been validated by 31 March 2021 were to be included. To maximise the opportunity to pass validation, this now includes all products on sale on 13 February 2020 and linked to an application submitted before 31 March 2021 that is subsequently validated.”
As at 19 April 2021, the FSA has produced a list of CBD food products on sale in England and Wales, and these products should be allowed to stay on the market until a decision on their authorisation has been made (as they had met the requisite validation threshold). The list produced by the FSA is split into two sections, which are made up of products associated with applications that either:
As previously stated, the list was first produced on 19 April 2021 and was intended to be updated weekly. The list, as of 26 April 2021, has only been updated once, and with only 43 products listed (from four manufacturers/suppliers). It is understood that more than 500-plus applications were received by the FSA by the deadline of 31 March 2021 but it is unclear how many of these applications have been processed as of 26 April 2021.
It is uncertain how long the FSA will take to update and provide a complete list of products (manufacturers/suppliers) that have had their novel foods application validated. The authors suspect that the position will become extremely contentious for those companies that have not made the final list as no clear guidance has been given by the FSA for those wishing to challenge the FSA’s decision.
The primary legislation concerning cosmetics is Regulation (EC) No 1223/2009 (the “EU Cosmetics Regulation”) and Schedule 34 of the Product Safety and Metrology, etc (Amendment, etc) (EU Exit) Regulations 2019.
The cosmetic ingredients database (CosIng) is the EU’s official database for cosmetic ingredients, and as of 2 February 2021 CBD has been added to the database.
Again, as with food products, since the Brexit transition came to an end, the Office for Product Safety and Standards (OPSS) handle the listing of cosmetic products in the UK.
The vaping sector is regulated by the Tobacco and Related Products Regulations 2016 (TRPR). CBD products are not captured by the definition of “herbal product for smoking” pursuant to Part 5 of TRPR. Part 6 on e-cigarettes will only apply where there is some sort of tobacco-derived material contained within the product. If the proposed CBD products contain no tobacco-derived material (eg, nicotine) then they will not be caught by these regulations.
The cultivation of hemp is an augmenting industry in the UK: the leaves and flowers of the hemp plant – cannabis plants with notably low tetrahydrocannabinol (THC) content – remains classified as a Class B controlled substance under the MDA 1971. However, the MDR 2001 permits the cultivation and certain handling of the hemp plant subject to a licence with special conditions attached, obtained through the Home Office (see 1.2 Regulatory Authorities). As hemp is typically grown for the industrial application of fibres and the nutritional benefit of its seeds, the licences granted for its cultivation usually require the destruction of the leaves and flowering tops on the grow site. A Controlled Drugs Licence would need to be obtained from the Home Office in order to handle the parts of the plant controlled by the MDA 1971.
Medical cannabis and cannabinoids, and their uses, are regulated by a number of authorities, depending on the sector in which they are used. Below are the relevant regulatory authority for each sector and their scope.
Food Standards Agency
Medicines and Healthcare Products Regulatory Agency (MHRA)
Veterinary Medicines Directorate (VMD)
The Home Office
The Home Office operates as the UK National Cannabis Agency (pursuant to the UN Convention on Narcotic Drugs 1961). It acts in a regulatory capacity with respect to cultivation licensing and oversees the issue and maintenance of both hemp and high-THC cannabis licences. The Home Office also acts through the Border Force with respect to inspecting imports and exports, and will seize cannabis and CBD-related products that it suspects do not comply with national legal requirements.
There are a number of trade bodies at the UK and EU level that represent companies in the cannabinoid wellness industry and provide guidance and referrals for those wishing to enter the industry. They usually provide an annual membership, which requires members to have their products routinely tested for safety, efficacy and to ensure they are of a high standard and not misrepresenting the cannabinoid content.
Public and Professional Unfamiliarity
By far one of the biggest struggles for market participants in the medical cannabis and cannabinoid wellness sectors is the lack of reliable information for consumers, the lack of education for clinicians or support by medical bodies such as the National Institute of Care and Excellence (NICE), MHRA and the UK National Health Service (NHS).
The confusion may lie in the unique property of the cannabis plant and its cannabinoids. The non-controlled (legal) cannabinoid CBD has been shown to have medicinal properties not dissimilar to licensed medicines already in the market, yet CBD product producers are restricted from marketing the non-licensed CBD products as having medicinal properties due to strict legislation governing medicines in the UK.
Pace of Change
There are two fundamental levels to consider when addressing the pace of legal change relating to activities related to the cannabis plant. One of these is at the macro-level (major national change, generally implemented through amendments to primary legislation), and the other is at the micro-level (more granular, technical changes, usually to regulatory rules or guidance, for example).
The pace of change at the macro-level is slow – for example, making cannabis-based medicines available to the UK public. Any changes at this level are a protracted exercise – not only because amending legislation in and of itself is an onerous task involving many different working parts, but also due to politics – and a further complication arises as UK and EU legislation in this area are interlinked with international law (ie, the UN Conventions), which adds another layer of complexity to the amendment process.
The pace of change at the micro-level, however, is relatively fast. This generally involves targeted tweaks to regulations and guidance that address how specific elements of the cannabis plant are treated in England and Wales. Not only are these changes more numerous, but less red tape is involved in the amendment process and so changes can be realised more quickly. Changes at this level might include the percentage of THC allowed in a cultivar, changes to novel food rules or updates to the CosIng database, for example.
Strict Laws and Expensive/Protracted Licensing
The current rules, particularly around licensing, create substantial bottlenecks that prevent the UK industry from operating at full capacity.
For example, the threshold for permissible THC levels in products or containers is not expressed as a percentage, but instead as a fixed milligram measure. This means that, whereas no controlled drugs licence is needed for the possession or sale of the CBD products themselves, manufacturers cannot import or possess the bulk CBD distillate required to create their products (without an expensive and difficult-to-obtain licence).
Another example is the outdated controlled drugs licensing system itself. Both the licence that is required to cultivate cannabis and the licence that is required to permit the possession of controlled cannabinoids (that may arise as a result of the manufacturing process) require applicants to spend, some would say, disproportionate time and excessive sums of money to try and meet the Home Office licence requirements. The administrative difficulties to achieving approval have also come under criticism. As a result of a protracted application process, approval (or rejection) can occur over two years after the initial application date.
Another example is the fact that extraction of CBD is only permitted from the CBD-sparse stalks and seeds of the plant (without a licence), making extraction inefficient and creating yet another CBD-sourcing issue.
Resolving these systemic licensing issues would not only increase the efficiency and profitability of the UK’s commercial sector, but also alleviate barriers to medical research.
The current regulatory regime is substantially underdeveloped. In this regard, with the treatment and status of cannabis in the UK, essentially there is no overarching regulatory regime that has been developed for the plant and its component parts. For this reason there exists a legal grey area over many aspects of cannabis use with the aforementioned patchwork of regulations across various sectors being potentially misinterpreted, which leads to instances of confusion – eg, the common misunderstanding that hemp flower/buds are legal to be sold and consumed in the UK.
Further, it has been the tenuous interpretations of existing legislation and regulations that has led to serious legal consequences for producers and commercial enterprises, particularly in the CBD sector.
As far as medical cannabis is concerned, the regulatory regime for its governance falls squarely under the same regime governing the activities of medicines in the UK.
One major risk area that companies should be aware of is the constantly shifting regulatory regimes governing the different activities of cannabis and cannabinoids in the UK.
This has never been more relevant than in a post-Brexit landscape. With the opportunity to garner more autonomy in terms of how cannabis is treated – and particularly in relation to CBD – the UK may steer away from the existing regulations to better achieve its own ambitions for the cannabinoid.
The Food Standards Agency has already taken a different view to the EU on the topic of CBD being classified as a narcotic or food (to which the ECJ eventually decided in the latter, as was the FSA’s stance). An example such as this – but with a different result – could dramatically shift how enterprises work in the UK.
As we see the prevalence of medical cannabis and cannabinoids grow, there may come a time for legislation to be drafted which directly addresses cannabis and its component parts. Consequently, participants in the cannabis sector must be ever-aware and closely follow the industry developments.
Unclear or Untested Regulations
Some sources of legislation that govern cannabis were drafted in the early-1960s and the 1970s. Aside from considering them outdated in many respects, observers note that these laws are unfit for purpose, as they were put in place to control the criminal trade of the plant, rather than to govern a commercial industry. For this reason, some of the central rules on which the industry relies are unclear and have not been tested in the courts. As a result, confusion is rife in the industry, with many participants relying on inapplicable thresholds and a general lack of consensus as to many of the rules.
Proximity to Criminal Liability
One difficulty with any industry centred around controlled substances is that the lawful activity sits relatively close to the national criminal law regime. In this regard, the only element separating lawful business and illegal activity is either an appropriate licence (covering manufacture, possession, supply, import or export, for example) or adequate legal advice (covering which parts of the plant are lawful to use or extract from without a licence, for example).
Proceeds of Crime Act
The Proceeds of Crime Act 2002 (PoCA) Part 7 criminalises dealing with or entering into arrangements in respect of the proceeds of “criminal conduct”. The definition of criminal conduct in PoCA captures conduct which is lawful overseas, but would be a crime if it occurred in the UK.
Certain risks may arise for investors and professional services firms in particular, where funds are received from overseas companies which have generated their revenues from sources that are not yet lawful in the UK (recreational cannabis, for example), and best practice should always be followed. This issue is not a straightforward one, with no clear authority on certain matters that arise.
UK Criminal Law
In terms of the MDA 1971, possession, supply or importation of a controlled substance of Class B are "either-way offences" (ie, criminal offences that can be heard in the magistrates' or Crown Court). Charges are brought by the police on the advice of the Crown Prosecution Service (CPS), which then conducts the prosecution case in court. The maximum sentence on indictment for possession of Class B is five years’ imprisonment (or an unlimited fine). For offences of supplying a drug of Class B, the maximum sentence is ten years’ imprisonment (or an unlimited fine).
For an offence of importing (or exporting) a drug of Class B, the maximum sentence is 14 years’ imprisonment (or an unlimited fine). The CPS may elect to charge the business which sells the product or the individuals involved in importing, storing or selling the product.
Section 28 of the MDA 1971 provides a defence where the accused neither knew nor suspected that the substance in question was a controlled drug. Per the judgment in R v Lambert  UKHL 37, the burden is on the prosecution to disprove this defence, once raised by the accused, beyond reasonable doubt.
It should be noted that offences of conspiracy to supply or import a controlled substance are not subject to this statutory defence, as they are strictly speaking offences under Criminal Law Act 1977.
Packaging and Labelling Law
Dealing with product claims more generally, misleading claims on products is an offence under Regulation 9 of the CPUTR 2008. It is punishable by either a fine or two years’ imprisonment.
In respect of medicinal products, as mentioned above, the MHRA regulates this area. In practice, as long as products do not make the medicinal claims or present themselves as medicines, the MHRA have been reluctant to intervene and require authorisation. Breaches of the marketing authorisation requirement is punishable by either a fine or two years’ imprisonment.
When it comes to unauthorised health claims made in marketing materials about food products, the UK Advertising Standards Agency (ASA) will act against businesses breaching any of the rules. Local Trading Standards are empowered to enforce when it comes to food labelling. Breaches here are punishable by either a fine or two years’ imprisonment. General or specific health claims about CBD are unauthorised.
The UK Border Force also acts as an enforcement authority and will seize products that are suspected of breaching national laws. This is not limited to criminal law, but also to food law and other regulations.
In the absence of a harmonised regulatory landscape which clearly sets out the rules for the activities of cannabis and cannabinoids, we have been left with a variety of jurisdiction-specific rules – eg, permitted levels of THC in CBD products.
The EU is progressing towards a more harmonised set of laws to keep consistency in the industry, and this was demonstrated in the recent Kanavape case (the Court of Justice of the European Union (CJEU) case number C-663/18), where the CJEU clarified that the principles of EU law supersede those at member state/national level, regardless of the product or interest in question.
The CJEU went one step further in their decision by announcing that, based on the available safety and scientific evidence, CBD cannot be classified as a narcotic, especially in light of the recent UN decision (see below) – in particular noting that CBD’s apparent non-psychotropic effect and lack of any harmful effect on human health goes against the spirit of the Convention, which was drafted for protection against harmful and damaging drugs.
As a result, the European Commission has publicly announced that CBD should not be treated or regulated as a narcotic, and that CBD should qualify as a food (albeit a novel food), paving the way for a route to market through novel food authorisation.
This could provide a benefit for the UK: having a semblance of consistency with regard to characteristics of a cannabinoid or its production will go a long way in terms of ease of cross-border trade.
UN CND Decision
On 2 December 2020, the United Nations’ Commission on Narcotic Drugs (CND) held a vote that resulted in the removal of “cannabis and cannabis resin” from Schedule IV of the Convention (reserved for the most harmful narcotic substances). This is expected to alleviate issues with access and availability of cannabis for medical and scientific purposes at national level. However, this will not affect the CBD industry greatly, as “extracts […] of cannabis” were left in Schedule 1, allowing the aforementioned legal controversy around CBD extracts to continue.
Furthermore, the CND rejected a proposal on the clarification of CBD – which would have provided for an additional note to accompany the Schedules elucidating that preparations that contain predominantly CBD and less than 0.2% THC should not fall under international control. Summarily, these two decisions demonstrate that the CND recognises cannabis as having a beneficial medical application. However, as far as recreational and wellness use is concerned, there remains reluctance to relinquish full control.
Access to medical cannabis is currently limited by a number of legal and policy factors.
The greatest (legal) access barrier is that medical cannabis in the UK cannot initially be prescribed by general practitioners, per se. The statutory instrument that rescheduled cannabis in the UK included a provision that restricted the prescribing of cannabis-based medicines to those doctors who were specialists in an area of concern (eg, paediatrics, ophthalmology, etc) and listed on the GMC’s Specialist Register. Less than 30% of the UK’s doctors are on this register and, in practical terms, only a fraction of these specialists could be in a position to prescribe medical cannabis to patients, thereby creating a considerable bottleneck in meeting patient need.
A second element affecting access to medical cannabis is guidance issued by the National Institute for Clinical Excellence (NICE). This guidance, which ultimately affects state-funded access to medical cannabis, recommends the medicine for only three indications: (i) chemotherapy-induced nausea and vomiting; (ii) spasticity in adults with multiple sclerosis; and (iii) severe treatment-resistant epilepsy. It has also been suggested that guidance from the British Paediatric Neurology Association (BPNA) is restrictive (whether duly or unduly) and affecting patient access.
As a consequence of Brexit, reduced import and export flexibility has reportedly affected access to some cannabis-based products for medicinal use (CBPMs) in the UK.
As described in 1.1 Source of Regulations, cannabinoids are caught by the Novel Food Regulations, as there is no evidence of their consumption by humans to a significant degree (as extracted or purified) within the EU before 15 May 1997.
This means that products or foods containing any cannabinoids will require full authorisation prior to being used in foods. The authors reiterate, however, that in the UK the FSA has given some brands/products a lifeline to be able to continue to market their products in England and Wales – if said products were on sale on or before 13 February 2021 and a Novel Foods application was submitted by 31 March 2021 which was subsequently validated.
There is no doubt that both decriminalisation and recreational regulation are words constantly on the lips of everyone in every level of this sector, including the government. The discussion papers that have been presented suggesting the socio-economic benefits of the plant – spanning medicinal, industrial and economic factors – keep the fires of discussion alight.
That said, to date there have been no formal moves to decriminalise, regulate or legalise cannabis for recreational purposes, from a governmental perspective. However, small but significant attitude changes may be observed from politicians and state institutions, involving a number of debates in Parliament (for example, Sir Norman Lamb’s December 2018 motion to legalise the possession and consumption of cannabis), and there has been a subtle but profound relaxation in terms of charging those who are in possession of small amounts of cannabis for their own personal use.
In 2019, a cross-party group of MPs went on a fact-finding trip to Canada in order to experience how a legal and regulated cannabis market operates. Recently – in the context of the 2021 London mayoral candidate race – the incumbent Mayor of London, Sadiq Khan, stated that he would consider looking into the decriminalisation of cannabis in the capital. It may only be a matter of time before full legalisation and regulation happens in England and Wales, given the socio-economic benefits such a move would bring.
Where users of cannabis for bone fide medical reasons are concerned, there is an initiative in the UK that aims to help these users avoid criminal consequences of cannabis use. The Cancard scheme is a non-government initiative that is publicly supported by Members of Parliament, a number of national and local police associations and other bodies. The initiative provides members with a card showing that the holder has been diagnosed with a condition that cannabis has been shown to treat. It does not provide a defence to possession in law but aims to support a police officer’s use of discretion during a search or arrest, with the hope (and, in most cases, result) that the user will not face criminal sanctions for possession.