Medical Cannabis & Cannabinoid Regulation 2023

The Growth of Cannabis Law

A practice area that initially attracted more flippant remarks than serious recognition now facilitates a multibillion-dollar global industry, providing for everything from textiles and biofuel to life-saving medicines.

Whereas certain jurisdictions always enjoyed a buoyant but limited cannabis sector – think Amsterdam’s historic recreational market, or China’s leading industrial hemp industry – it was the relaxation of medical cannabis rules across the USA and Canada that was probably to thank for the astonishing pace of legislative reform that has since swept the globe.

This, together with the helpful discovery that a little-known non-controlled cannabinoid (cannabidiol or CBD) could be widely sold without medicines approval, allowed the plant to shake off its historic associations and be reintroduced to the public in the form of a versatile, innocuous and investable asset, albeit in an industry desperately in need of regulatory reform.

What is clear from many of our authors is that most jurisdictions’ legislative frameworks were not ready for the challenges and opportunities that the new global cannabis industry has posed. Outdated conventions, uncertain and untested regulations, commercially restrictive policies, ill-informed domestic authorities and inconsistent enforcement are but a few of the barriers faced across the board.     

The Medical Cannabis & Cannabinoid Regulation 2023 guide summarises the key principles of cannabis law in six jurisdictions. In addition to several Trends and Developments articles, each jurisdiction is reviewed following the same eleven-question format, allowing for easy comparisons on specific issues and concerns. It is designed to provide an easy-to-understand guide that is both specific to each jurisdiction whilst also demonstrating how certain areas of practice have reached a near-homogenous position internationally.

The Four Branches of the Industry

Another element that is clear from contributors to this guide is that the global industry is divided into four distinct sectors:

• medical;
• wellness;
• recreational (or “adult use”); and
• industrial hemp.

As the industrial hemp industry has historically existed without any hindrance, owing to complicated and stringent legal rules, this guide focuses more on the medicinal framework and regulation pertaining to the legally controlled parts of the cannabis plant.

Recreational markets only currently exist in a handful of jurisdictions, including 18 US states (although 34 have some kind of decriminalisation, and even more a policy of not charging for some cannabis offences) and Canada. There has been movement on the issue in a number of jurisdictions recently, particularly in Europe. Optimism surrounded initial proposals of legalisation for recreational use in Germany, but these have since been watered down. The current suggestion is that the model will be more akin to allowing cannabis clubs, as in Spain, but legalisation for recreational purposes is coming. Switzerland may soon follow, as a parliamentary commission advised in October 2021 that the law be reformed and that cannabis should be legalised and regulated.

In 2021, Malta became the first EU member state to legalise possession (including cultivation) of recreational cannabis within limits, but the country is yet to fully authorise a recreational market, limiting sales to not-for-profit transactions and prohibiting consumption in public. More recently, in April 2023 officials in Luxembourg presented a plan to legalise the recreational use of marijuana in the country, but it remains to be seen how much of a commercial opportunity this will be, with proposed state control of cultivation and sale and only two official growers.

There have been some significant moves outside Europe too. Since June 2021, cannabis possession has theoretically been decriminalised in Mexico, as the Supreme Court declared the laws criminalising cannabis unconstitutional; however, state and federal laws remain in place and there is no current or prospective structure for the legal sale of cannabis. Cannabis consumption and cultivation by individuals has also been legal in Thailand since June 2022, with certain restrictions, and there are licences available for businesses to cultivate and distribute the plant, but foreign companies and foreign majority-owned companies in Thailand are prevented from conducting business in the cannabis sector.

Medical cannabis has been legalised much more widely (currently including most of North and South America, Canada, much of Europe, and Australia). What is clear from authors in the medical sphere is that legalisation and actual access to medical cannabis are two different things – and that cannabis education, for everyone from politicians to doctors, is of paramount importance for achieving access for all. Legal developments in the medical sphere continued cautiously across Europe in the last 12 months with Poland’s relaxation of rules permitting cultivation for medical purposes from May 2022, positive study data results from Germany’s medicines regulator in July 2022 and Switzerland’s relaxation of rules permitting every doctor to prescribe from August 2022. This was followed by the UK’s move in January 2023 adding its fourth reimbursable (state-funded) indication to the list, and France’s announcement that from March 2023 their national medical cannabis assessment would be extended for another year to gather further data before decisions on legalisation can be implemented. By contrast, in Asia, medical cannabis in Japan is still prohibited.   

On the wellness side, one theme that is evident across jurisdictions is the inconsistency regarding applicable THC thresholds. These inconsistencies are preventing the harmonisation and free movement of products. For instance:

• in the UK the permissible level of THC is 1 mg in the end product (regardless of the size of the product);
• in some European countries the accepted level is 0.2% (with a 0.3% limit at EU level from 2023);
• in Switzerland the accepted level is 1%; and
• in Germany and certain US states the accepted level is 3%.

It is clear to see why producers of wellness products are wrong-footed when products are seized at customs.     

International Developments

Developments on the international stage have meant a number of beneficial ramifications for the global industry, although these have not gone as far as hoped. In January 2019, the World Health Organization (WHO) made eight recommendations on cannabis and cannabis-related substances to the United Nations’ Commission on Narcotic Drugs (CND). These included recommendations for relaxing controls on THC, and on extracts from the plant (including CBD).

On 2 December 2020, the CND held a vote that rejected most of the WHO’s recommendations, but that resulted in the removal of “cannabis and cannabis resin” from Schedule IV (reserved for the most harmful narcotic substances) of the main international convention controlling the plant. This is expected to alleviate issues with access and availability of cannabis for medical and scientific purposes at national levels. However, this will not affect the CBD industry greatly, as “extracts […] of cannabis” were left in Schedule 1, allowing 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 containing 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, reluctance to relinquish full control remains.

At a continental level, the EU is progressing towards a more harmonised set of laws to establish consistency in the industry, and this was demonstrated in the 2020 Kanavape case (the Court of Justice of the European Union (CJEU) case number C-663/18), where the CJEU clarified that, subject to narrow exemptions, 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 – in particular noting that controlling a substance with no apparent psychotropic effect, nor any harmful effect on human health, goes against the spirit of the Single Convention on Narcotic Drugs 1961, 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. At present, however, it is worth noting that CBD novel food applications in the EU were placed on hold while the European Commission consults the European Food Safety Authority (EFSA) to give its opinion on the safety of CBD consumption for humans. The EFSA in June 2022 issued a statement identifying a number of data gaps with the health effects of CBD intake that require evaluation before it can make a determination.

International Impacts

COVID-19

The COVID-19 pandemic disrupted businesses in ways that were unthinkable prior to 2020. Global lockdowns put the brakes on everyday business life, affecting even the most profitable sectors and plunging even the strongest economies around the world into deep debt and recession, the likes of which have not been seen since the last world war. 

However, there were many notable developments during the height of the pandemic which can only be seen as positives. As discussed in this guide, cannabis-based medicines (CBMs) are not always freely available as a prescribed medicine, yet CBMs are becoming an acceptable method of treatment. Plainly, a lot more can be done in this area – as demonstrated by initiatives such as Carly Barton’s Cancard, designed to protect medical cannabis users from prosecution (as described in more detail below). 

In the CBD wellness sector, established companies have been able to push on and continue productivity, and there has been a considerable increase in online sales for products such as oils, tinctures and cosmetics. It appears that during the pandemic those businesses which marketed successfully online, or whose brands were sufficiently recognisable, flourished as these products become an essential item for those stockpiling for quarantine at home, with some of these products being perceived to help alleviate anxiety and sleep disturbances caused by the intense lockdown periods that people have had to endure.

Brexit

Brexit disruption saw goods being affected by the additional import/export checks and paperwork now required, when previously there was free movement.

For the medicinal cannabis sector, Brexit caused another dilemma: during the Christmas week of 2020, the UK Department of Health announced that medicinal cannabis prescriptions issued in the UK would no longer be lawfully dispensed in EU member states, due to the end of the Brexit transition period. When delivered to the prescribing doctors of over 40 medicinal cannabis patients, the news came as a bombshell to the families affected, who were effectively given just two weeks’ notice before losing access to the life-saving medicine, Bedrocan, from the Netherlands. As a consequence, the UK government agreed with the Dutch government to allow such prescriptions to take place until a source in the UK could be established, but this issue highlighted the need for greater regulation to allow for development of CBMs so that they are readily accessible to patients.

Licensing Systems

A number of jurisdictions note that problems lie with the national cannabis licensing systems, which are the frameworks in place to permit the cultivation or possession of plants for legitimate commercial or research purposes.

Across the globe, contributors report that licensing authorities are taking a conservative approach. Relatively few licences are granted and licensing requirements are notably high (sometimes prohibitively so). Licensing regimes are reportedly not transparent, with little guidance, and are particularly expensive, ultimately pushing product prices up and discouraging competition.

Certain jurisdictions have, however, recently reformed their licensing frameworks to improve such issues, including the Isle of Man, which passed new regulations to create a comprehensive regulatory framework governing the issuance of licences for the island.

Lack of Legal Certainty

A lack of legal certainty tends to arise in two forms. Firstly, most of the laws and regulations that govern cannabis are unfit for the objectives of the modern cannabis industry. This is because the laws were originally put in place to control the criminal trade of the plant and license hemp for agricultural use, rather than to regulate a sophisticated medical and wellness sector. What is seen across the board is reliance on international law to some degree – law that dates back to the early 1960s and the 1970s.

For these reasons, not only is it unclear how many of the legal concepts should be properly applied considering the very different modern context, but these are also untested in the courts.

The rules are also frequently changing, which creates a second type of legal uncertainty. This is because existing rules are in the process of being interpreted by various authorities, and new rules are being put in place to govern the rapidly changing commercial landscape. Naturally, it is difficult to achieve legal certainty when rules and regulations may change over the life cycle of product development or business plans.

Industry Bodies

One common theme noted by contributors is the absence of a unified, authoritative body to orchestrate sensible regulation for the industry.

In a seminal discussion paper, the authors of the accompanying UK Law and Practice article recommended to the government that a UK Office for Medicinal Cannabis should be established to bring together the various regulatory responsibilities and oversee the implementation of policy recommendations.

Our Spanish authors note that the incorporation of an association or a similar body will be critical for pushing through a sensible regulatory framework; essentially, this would open the local market and ensure patient access to cannabis-based products with high standards of quality, safety and consistency. Increasing awareness and education for politicians, legislators and clinicians is identified as key and needs to be effectively channelled.

Criminal Sanctions and Decriminalisation

There is still disparity around the world regarding the criminal aspect of dealing with cannabis and its trade. The criminalisation of cannabis is global in nature because of the initial harmonisation of its illegality through the UN Single Convention on Narcotic Drugs 1961. In recent decades, the divergent paths adopted by jurisdictions around the world has reflected the uneven development of a greater understanding of the plant and its potential medical benefits. As social and scientific studies grow more robust and frequent, changing attitudes towards cannabis can be seen in the context of its treatment in criminal law.

The recurrent theme in countries that are on the path to legalisation is a gradual relaxation of the penalties or sanctions for those who are breaking the laws in their jurisdiction. Mexico, a jurisdiction on the precipice of full legalisation of cannabis, has legislation that permits possession of up to 5 g of cannabis per person of legal age, as set out in the General Health Law, a piece of primary legislation. This “blind-eye” approach could be seen as a first step towards the recreational or commercial regulation of cannabis in a jurisdiction.

In England and Wales, a privately run card scheme is available where those who are eligible for a private medical cannabis prescription, but who do not have one, may pay an annual fee to the organisation and receive an ID card. The initiative, which is not formally supported by the UK government but is backed by individual members of the UK Parliament and the police, provides a validated indication that the holder of the card is consuming cannabis for medical reasons. This development in the UK, a country with a historical, social and political aversion to cannabis, is indicative of the global trend of decriminalisation and de-stigmatisation of the plant, providing for autonomous use by those who benefit the most from it.

This seems to be a stepping stone along the path to full legalisation, a trend that we have seen in those countries where recreational and medical cannabis regulations now sit side-by-side.