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KFN+ Interview with Krautinvest about the Joint Application of EIHA for CBD as Novel Food

German Version at Krautinvest

An interview with Kai-Friedrich Niermann, lawyer and legal advisor of EIHA

Novel food where you only hear it. But how will a successful collective application affect the market? What does this mean for the availability of CBD in food? The European Industrial Hemp Association (EIHA) is launching a large-scale initiative for more legal and planning security for the European hemp industry. In January 2019, the Novel Food Catalogue was amended in such a way that all hemp extracts of industrial hemp and thus also the cannabinoids contained therein are considered novel foods. The EIHA then tried to prove that people have been consuming cannabinoids in hemp food for centuries. Their position: In principle, enriched and isolated cannabinoids would be considered novel food, whereas hemp leaves and flowers and hemp extracts from industrial hemp with a natural content of cannabinoids would be traditional foods and would therefore not necessarily fall under the Novel Food Regulation. The Federal Government nevertheless maintains that the Federal Office of Consumer Protection is „currently not aware of any case in which cannabidiol (CBD) would be marketable in food, i.e. also in food supplements“.
In view of this situation, the EIHA now assumes that legal and planning security for the European hemp industry and the trade with CBD-relevant products can only be provided by an authorisation as novel food. For this purpose, the EIHA has formed a so-called „Novel Food Consortium“ with a project GmbH. But: What does this mean? How can companies participate? What are the consequences for the market of a prospectively successful outcome? Kai-Friedrich Niermann, Lawyer and legal advisor of the EIHA, answers these and other questions.

krautinvest.de: The news that the EIHA is launching a joint application with its members for the approval of CBD products as novel food was the headline last week. For which products will an application be filed?

Kai-Friedrich Niermann: This decision by EIHA and its member companies was indeed unique and will write industrial history. The EIHA continues to advocate that CBD products with a natural content of cannabinoids, as regulated in the Novel Food Catalogue until 2019, may be placed on the market. However, the EIHA is now taking matters into its own hands and will create the planning security for its member companies that is denied to it by the authorities due to the incomprehensible and incorrect amendments to the Novel Food Catalogue.

Applications will be made for various CBD-containing basic products, i.e. ingredients. The CBD share is up to 10 percent and thus covers all marketable formats.
krautinvest.de: How is the application financed?

Kai-Friedrich Niermann: The proposal is financed by a special contribution of the members, which was decided by the General Assembly last week. The special contribution is 15,000 euros for companies with a turnover of less than one million euros, and at the peak 140,000 euros for companies with a turnover of more than 20 million euros. The contributions will increase in percentage terms the later one joins the proposal. The special contribution will be collected in several parts, depending on the progress of the scientific studies. The cost of the application is estimated at approximately 3.5 million euros. This will be used to finance extensive studies, including those involving human exposure, which will examine the toxicity of THC in particular and, as a result, enable new guideline values to be set that will enable industry to live better.
This is because the extremely low THC guideline values with which the industry is currently struggling are outdated and no longer scientifically tenable. Besides the Novel Food problem, the THC guideline values in food are the second major problem of the industry. The studies are intended to show that even products with much higher THC values than those currently recommended in Germany and Europe can be considered absolutely safe for the consumer.
krautinvest.de: Who makes the applications?

Kai-Friedrich Niermann: The applications will be submitted by a new company, EIHA projects GmbH, a wholly owned subsidiary of EIHA. This company acquires the rights under the Novel Food Regulation, manages them and transfers them to the members. Each EIHA member concludes a private written contract with the project GmbH.

krautinvest.de: What rights does a company that participates in the joint application acquire? What do companies have to do to participate in the application?

Kai-Friedrich Niermann: The project contract stipulates that consent will be given for the marketing of the member’s individual brands. An assignment of these rights is not possible. To ensure an equal financial participation of all companies in the project, on the one hand, all companies of a holding company with their worldwide CBD-related turnover are considered if the holding company is a member of the EIHA. However, if a subsidiary is a member, the entire worldwide CBD-related turnover of the holding company must also be taken into account.

Companies must therefore become members of EIHA and conclude a contract with EIHA projects GmbH.
krautinvest.de: What consequences will this have for other players who want to enter the market or how will a successful proposal change the market?

Kai-Friedrich Niermann: Products with CBD-isolate or enriched hemp extracts are currently considered by the authorities and courts as a novel food according to the prevailing opinion. A different opinion can be taken on this, as the EIHA has already explained several times. However, several first instance administrative courts have initially adopted the classification of enriched hemp extracts as a novel food throughout Germany. We see an increased enforcement of the Novel Food Regulation, especially in the last two weeks, after the worst consequences of the Corona Pandemic seem to have been worked off, and thus there is again time for „hunting“ CBD products. The City of Cologne even issued a general order prohibiting the marketing of food containing CBD on 17 June 2020, which is legally an extremely unusual step and can be seen more as symbolic politics.

Companies that want to continue to operate on the market without Novel Food approval will therefore have a hard time. One of the opponents will remain the authorities, which will enforce the regulation through administrative law. However, with a successful Novel Food approval in the CBD area, other companies, including EIHA projects GmbH, will also be able to take action against companies under competition law and demand injunctive relief if no market authorisation is available.
Overall, the market will change for the better as uniform standards and new findings on the safety of THC in food increase consumer protection and allow for correct and permitted food labelling. In addition to the image and brand value enhancement, the participating companies will gain lasting legal and planning security.
krautinvest.de: Does the application then also apply to Great Britain?

Kai-Friedrich Niermann: Yes, an application will also be submitted to the FSA. The FSA has made it clear that all applications must be submitted to the EU Commission before 31 December 2020, and to the FSA after that date. All companies that submit a valid Novel Food application by 31.3.2021 can continue to sell their products on the British market. In addition, the FSA will introduce a procedure for the assessment of applications for Novel Food approval, which will be very similar to that of the European Commission.

krautinvest.de: Still another completely different topic, in December a UN decision is to take place for the reclassification of cannabis. How do you estimate the situation?

Kai-Friedrich Niermann: It is not yet clear at all whether a decision will actually be made this time. Many conservative countries, which pursue a very strict cannabis policy, also with regard to medical cannabis, have so far been able to successfully delay a vote.

krautinvest.de: What consequences could the reclassification of cannabis by the UN have for the industry?

Kai-Friedrich Niermann: If medical cannabis should indeed be removed from Annex 4 and listed only in Annex 1, this would give a further boost to the medical cannabis industry. The use of cannabis as a medicine and research would be made much easier. It would also make it easier for other governments to consider the introduction of a medical cannabis program.

With regard to cannabidiol or CBD, the WHO has proposed „preparations containing predominantly cannabidiol and no more than 0.2 per cent delta-9-tetrahydrocannabinol“ not to be subject to international control. The European Commission’s proposal for a common position at the December decision rejected this addition. The THC limit values for preparations containing mainly cannabidiol are not scientifically substantiated and a different interpretation of the way in which this limit value is calculated cannot be ruled out.
This EU position is yet another argument in favour of the EIHA to carry out detailed toxicological studies on the safety of THC in food in order to achieve once and for all a uniform handling.
krautinvest.de: Many thanks for this interview. We are curious about the further development.

eihasntools

CBD-Update March 2020 – Corona, Cannamedical and EIHA (vs. BVL and NF-Consortium)

German Version

2019 has already been a difficult year for the CBD industry, and 2020 seems to be no less challenging. Until December 2019, several official prohibitions of CBD oils, both with isolates and with extracts, especially from supercritical CO2 extraction, have been confirmed by first instance administrative courts in Germany (f.e. VG Gießen). In the new year, there were further police actions and official prohibitions, even at companies that previously felt safe because they were only involved in online trading.

And now the Corona Pandemic is added to this.

All industry events, such as the ICBC in Berlin or the CNBS in Cologne, were cancelled or postponed. Whether the Mary Jane in Berlin in June and the alternative dates can take place is still more than questionable.

Cannamedical

Furthermore, the company Cannamedical from Cologne has started to write to CBD manufacturers and distributors via the lawyer Peter Homberg of the law firm Dentons from Berlin and to point out that extracts of Cannabis sativa L and products derived therefrom containing cannabinoids are considered as novel food and are not marketable without a corresponding authorization. The undertakings marketing those products would gain an unlawful competitive advantage. Attorney Homberg called on the companies, setting a deadline, to immediately stop the distribution of CBD products requiring approval. At the same time, it was announced that the companies had been notified to the competent authorities.

Nevertheless, a legally binding warning letter was not issued. On the one hand, there was no declaration of discontinuance subject to penalty, and on the other hand there was also no note of legal costs. The warning notice is obviously connected with the CBD prescription kit developed by Cannamedical, which the company last sold in pharmacies as prescription drugs.

It remains to be seen whether and to what extent Cannamedical will continue to take action in this matter. In any case, the company has not made friends in the industry. And of course neither has Dentons, one of the main sponsors of the ICBC 2020 in Berlin.

EIHA vs. BVL

At the same time the EIHA caused a stir with a press release at the beginning of March: „Cannabidiol not necessarily subject to registration as a novel food“. This was preceded by an exchange of correspondence with the Federal Office of Consumer Protection and Food Safety (BVL) after the latter stated on its website in March 2019 that no case was known in which cannabidiol (CBD) could be marketed in food, i.e. also in food supplements. The EIHA requested clarification or a differentiated approach from the BVL, since the European Commission issued statements in 1998 confirming that foods containing parts of the hemp plant are not novel foods.

In response to a question from the FDP parliamentary group in the Bundestag, the Federal Government then declared in July 2019 that the European Commission’s statements from 1998 were still valid, but that it could not be concluded from this that all products of the hemp plant, including CBD isolates or extracts enriched with cannabinoids, for example, would be marketable.
The Federal Ministry of Food and Agriculture has similarly answered the question of the EIHA. The BMEL also had no evidence that cannabidiol (CBD)-enriched hemp extracts had been consumed to any significant extent in the EU before 15 May 1997.

Conversely, it follows that cannabinoids of the hemp plant can only be considered as a novel food ingredient if they use isolates or enriched extracts. Food products derived from hemp using traditional hemp flower/leaf extraction and that contain the full natural spectrum of cannabinoids in the hemp plant are therefore marketable.

Such an examination can only be made in each individual case and the BVL’s blanket classification on its website is therefore incorrect.

In my opinion, this assessment by the EIHA is logical and will also have to be taken into account in the appeals still to be heard against the first instance administrative court decisions already made and in new proceedings.

Also in the case of Cannamedical, which is proceeding on the basis of competition law, every company should examine whether classification as a novel food is in fact mandatory.

Although some headlines then went too far, special international voices were heard about the press release, which already stated that the German government has now released CBD. But the differentiation pointed out by the EIHA should be given sufficient attention by authorities, administrative courts and competitors.

EIHA Novel Food Consortium

Nevertheless, the EIHA is continuing to make progress with the formation of a consortium, as decided at the General Assembly in November 2019. The consortium will submit joint applications on behalf of its members, including in particular isolates and enriched hemp extracts for approval as novel food. Only in this way can the full market potential of the hemp plant and its derivatives be exploited for the consumer. The EIHA will present its complete concept, including the timetable, study designs and costs for members, by the second half of 2020 at the latest. A membership in this consortium as well as in the EIHA is still possible at any time, new members are always welcome.

eihasntools

CBD-Update März 2020 – Corona, Cannamedical und EIHA (BVL + NF-Konsortium)

English Version

2019 war für die CBD-Industrie schon ein schweres Jahr, 2020 scheint nicht minder herausfordernd zu werden. Bis zum Dezember 2019 wurden mehrere behördliche Vertriebsverbote von CBD-Ölen, sowohl mit Isolaten als auch mit Extrakten, insbesondere aus superkritischer CO2 Extraktion, von erstinstanzlichen Verwaltungsgerichten in Deutschland bestätigt (z.B. VG Gießen). Auch im neuen Jahr gab es weitere Polizeiaktionen und behördliche Untersagungen, auch bei Unternehmen, die sich bisher sicher gefühlt haben, da sie ausschließlich im Onlinehandel tätig waren.
Und nun kommt auch noch die Corona Pandemie hinzu.

Sämtliche Branchenveranstaltungen, wie die ICBC in Berlin oder die CNBS in Köln, wurden abgesagt oder verschoben. Ob die Mary Jane in Berlin im Juni und die Ausweichtermine stattfinden können, ist noch mehr als fraglich.

Cannamedical

Die Firma Cannamedical aus Köln hat darüber hinaus begonnen, CBD-Hersteller und Distributoren über den Rechtsanwalt Peter Homberg von der Anwaltskanzlei Dentons aus Berlin anzuschreiben und darauf hinzuweisen, dass Extrakte aus Cannabis sativa L und daraus gewonnene Produkte, die Cannabinoide enthalten, als Novel Food gelten und ohne eine entsprechende Zulassung nicht verkehrsfähig seien. Die Unternehmen, die diese Produkte vertreiben, würden sich einen unzulässigen Wettbewerbsvorteil verschaffen. Rechtsanwalt Homberg forderte die Unternehmen unter Fristsetzung auf, den Vertrieb zulassungspflichtiger CBD-Produkte umgehend einzustellen. Gleichzeitig wurde mitgeteilt, dass die Firmen den zuständigen Behörden gemeldet worden sind.

Um eine rechtswirksam verbindliche Abmahnung hatte es sich gleichwohl nicht gehalten. Zum einen war keine strafbewehrte Unterlassungserklärung beigefügt, zum anderen auch keine anwaltliche Kostennote. Die Abmahnung steht offensichtlich in Zusammenhang mit dem von Cannamedical entwickelten CBD-Rezeptur-Kit, dass die Firma zuletzt als Rezepturarzneimittel in Apotheken vertrieben hat.

Ob und in welcher Intensität Cannamedical hier weiter vorgeht, bleibt abzuwarten. Freunde in der Branche hat sich die Firma damit jedenfalls nicht gemacht. Und Dentons, einer der Hauptsponsoren der ICBC 2020 in Berlin, natürlich ebenfalls nicht.

EIHA vs. BVL

Zeitgleich sorgte die EIHA mit einer Pressemitteilung Anfang März für Aufsehen: “Cannabidiol nicht zwingend als Novel Food zulassungspflichtig“. Vorausgegangen war ein Schriftwechsel mit dem Bundesamt für Verbraucherschutz und Lebensmittelsicherheit, nachdem dieses im März 2019 auf seiner Webseite statuiert, dass keine Fallgestaltung bekannt sei, wonach Cannabidiol (CBD) in Lebensmitteln, also auch in Nahrungsergänzungsmitteln, verkehrsfähig wäre. Die EIHA forderte vom BVL eine Klarstellung bzw. eine differenzierte Betrachtungsweise, da Stellungnahmen der europäischen Kommission aus dem Jahr 1998 vorliegen, in denen bestätigt wurde, dass es sich bei Lebensmitteln, die Teile der Hanfpflanze enthalten, nicht um neuartige Lebensmittel handelt.
Die Bundesregierung hatte sodann auf eine Anfrage der FDP-Bundestagsfraktion im Juli 2019 erklärt, dass die Stellungnahmen der europäischen Kommission aus dem Jahr 1998 weiterhin ihre Gültigkeit haben, daraus aber nicht die Schlussfolgerung gezogen werden kann, dass sämtliche Erzeugnisse der Hanfpflanze, also beispielsweise auch isolierte Einzelsubstanzen wie Cannabinoide oder mit Cannabinoiden angereicherte Extrakte, als Lebensmittel verkehrsfähig wären.

Ähnlich hat das Bundesministerium für Ernährung und Landwirtschaft die Anfrage der EIHA beantwortet. Auch dem BMEL lägen nämlich keine Belege dafür vor, dass mit Cannabidiol (CBD) angereicherte Hanfextrakte in nennenswertem Umfang in der EU vor dem 15. Mai 1997 konsumiert wurden.

Im Umkehrschluss ergebe sich daraus, dass Cannabinoide der Hanfpflanze nur noch dann als neuartige Lebensmittelzutat angesehen werden kann, wenn sie isoliert oder angereichert verwendet werden. Lebensmittelprodukte aus Hanf, die mithilfe traditioneller Hanfblüten/-Blätter Extraktion gewonnen wurden und dass in der Hanfpflanze enthalten natürliche Vollspektrum von Cannabinoiden aufweisen, sind daher verkehrsfähig.

Eine solche Prüfung kann nur in jedem Einzelfall vorgenommen werden und die Pauschale Einordnung des BVL auf seiner Webseite ist damit fehlerhaft.

Diese Einschätzung der EIHA ist meiner Meinung nach folgerichtig und wird auch in den noch zu verhandelnden Berufungen gegen die bereits ergangenen erstinstanzlichen Verwaltungsgerichtsentscheidungen sowie in neuen Verfahren zu beachten sein.

Auch im Fall von Cannamedical, dass aufgrund wettbewerbsrechtlicher Grundlage vorgeht, sollte jedes Unternehmen prüfen, ob tatsächlich eine Einstufung als Novel Food zwingend ist.

EIHA Novel Food Konsortium

Zwar gingen einige Schlagzeilen dann doch zu weit, besondere internationale Stimmen zu der Pressemitteilung, die bereits titelten, dass die Bundesregierung CBD nun freigegeben hat. Aber die von der EIHA aufgezeigte Differenzierung sollte bei Behörden, Verwaltungsgerichten und Wettbewerbern doch ausreichend Beachtung finden.

Nichtsdestotrotz schreitet die EIHA weiter mit der Gründung eines Konsortiums voran, wie auf der Generalversammlung im November 2019 beschlossen. Das Konsortium wird für die Mitglieder Gemeinschaftsanträge stellen, die insbesondere auch Isolate und angereicherte Hanfextrakte zur Zulassung als Novel Food umfassen. Nur so kann das volle Marktpotenzial der Hanfpflanze und ihrer Derivate für den Konsumenten ausgeschöpft werden. Die EIHA wird dazu spätestens bis zum zweiten Halbjahr 2020 ihr vollständiges Konzept vorstellen, inklusive des Zeitplanes, der durchzuführenden Studien und der Kosten für die Mitglieder. Eine Mitgliedschaft in diesem Konsortium als auch der EIHA ist noch jederzeit möglich, neue Mitglieder sind jederzeit willkommen.

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CBD: A Comparison of EU and US Paths to Market (INCBA Webinar 01/30/2020)

In this webinar, join INCBA and Kai-Friedrich Niermann for an examination of how companies can get CBD to market as a food addictive through the FDA in the United States, and the Novel Foods Directive in the European Union. Lean about the requirements to access the European markets, and how you can set your current clients up for future success by learning the global landscape of the emerging Hemp and CBD markets.

click here for the link to the recording of the webinar

512px-Map-of-world-cannabis-laws.svgCC BY-SA 4.0], via Wikimedia Commons">

Cannabis Legalization – the year in review part 2

Original Link in German on Leafly.de

To anticipate the bad news, neither the legalization of cannabis nor the decriminalization of users has been realized in 2019. In the black market, again this year, most likely more than 500 tons were traded without any state control over youth protection, prevention, product quality, tax revenues and organized crime. There are still 180,000 preliminary proceedings for cannabis, 2/3 of them against users. In Görlitzer Park in Berlin drug dealing is still alive, even in front of the eyes of the new Federal Drug Commissioner, who has finally paid a visit there.

However, a public discussion has developed in a way that was unthinkable just a few years ago. In this sense, 2019 was an eventful year that is worth looking back on.

Hemp Association and Schildower Kreis Conference

The German Hemp Association (DHV) has used the funds of the Christmas donation campaign of 2018 with more than 110,000 € to start a justice campaign to encourage judges and defendants to have the penalties for cannabis possession and consumption reviewed by the Federal Constitutional Court. For this purpose, two lawyers have developed a sample template which judges can submit directly to the Federal Constitutional Court. This is possible in the context of a concrete action for review of the constitutionality of a statute. In addition, an advertising campaign was placed in legal journals. The well-known juvenile court judge Andreas Müller has media-effectively already made use of this option. It remains to be seen whether this campaign will be successful, and if so, how quickly.

The new campaign of the hemp association next year aims at a broad publicity campaign, which should further increase the approval values for cannabis legalization in the population (currently 42%). Here, considerable resources are certainly needed to generate the same kind of media attention as in the cinema advertising campaign back in 2017.

In November the Schildower Kreis organized at the University of Frankfurt the 1st Antiprohibitionist Congress with more than 150 participants. The association of more than 122 professors of criminal law who signed a declaration against the prohibition of certain illegal drugs in 2013 is remarkable in itself. Half of the German professors of criminal law thus oppose the criminalization of users, especially the 4 million cannabis users. At the conference, certain regulatory models for cannabis and MDMA were presented. Regarding the success of a constitutional complaint against the cannabis ban, it was noted that it was only in early November, in connection with Social Security sanctions, that the Constitutional Court ordered the legislature to regularly review the effectiveness of a law. If this review were consistently applied to the cannabis ban and the latest scientific and social findings were applied, the constitutional complaints should actually be successful. For the law does not succeed in effectively curbing the use of cannabis, nor is it proportionate in achieving that objective.

Pressure from the municipalities / pilot projects

Pressure from the municipalities also remains high. The Bremen state government is planning a pilot project to distribute cannabis to adults. Also, the federal state SPD of NRW passed a motion at the party conference to make a model project for home-grown medical cannabis possible.

At the end of the year, the Berlin SPD actually sent an application for a model project on legal distribution of cannabis to consumers to the BfArM (German Drug Authority), on which a decision must be made within the next 3 months.

The parity welfare association Bremen (paritätischer Wohlfahrtsverband), as part of an umbrella organization with over 10,000 independent organizations, has called for new approaches for the state of Bremen, in particular the decriminalization of consumers and the release of private cultivation for personal use.

New federal drug commissioner

The position of the Federal Government Commissioner for Drugs has not been filled since the European elections in May. The right of replacement was granted to the CSU, due to the Unions internal power structure after Marlene Mortler’s departure for the European Parliament. As a result, a social debate developed on whether such an important position should be filled solely on the basis of party proportional representation or on the basis of competence. This debate led to a position paper of the leading drug policy organizations in Germany, which recommended the appointment of Burkhard Blienert. Burkhard Blienert was a member of the German Bundestag from 2013-2017 and drug policy spokesman for the SPD Bundestag group. In this function he played a decisive role in the legalization of cannabis as a medicine. Among other things, he was able to achieve that the sovereignty of therapy lies with the doctor and that the costs for medical cannabis must be covered by the health insurance under certain conditions. With this experience, he would certainly have been a suitable candidate for the position of Federal Drug Commissioner, who is to coordinate the Federal Government’s drugs policy, provide impetus and take up recommendations from experts.

Not least because of this initiative, Daniela Ludwig was then appointed the new Federal Government Commissioner for Drugs by the CSU, a transport politician from the Bundestag, in September.

In her first interviews at the end of September she publicly called for a new beginning in German cannabis policy. She will talk to all responsible organizations and institutions and also look around our European neighbors to see that they are doing differently and perhaps better. After her last visit to Görlitzer Park, however, misleading remarks were again made, as she apparently voted for a nationwide uniform personal consumption of 6 g cannabis. The Bavarian Police Union immediately followed this up by stating that there should be no shaking at the 6 g limit, as police investigation measures would have to remain „possible“. However, a more liberal approach to cannabis with regard to users looks different. Ludwig is also firmly opposed to the decriminalization of hard drugs.

For 2020 it remains exciting to see to what extent this „new beginning“ in drug policy will be accompanied and shaped by it.

International developments

International developments showed a mixed picture. Canada and California are obviously struggling with the inadequate regulatory conditions created by the legislature. In both countries, for example, there was excess capacity of several 100 tons throughout the year, which is currently in stock and cannot be sold out. This is partly because there are too few licensed points of sale, and partly because taxes on legal cannabis products are so high that consumers continue to resort to black market products. In addition, the share prices of the largest producers have fallen by up to 70%, so that some international colleagues are already asking whether the legalization has failed.

In contrast, further legalization efforts were made in Mexico and New Zealand. Due to a decision of the highest court, Mexico must create the legal basis for the legal distribution of cannabis. In the upcoming 2020 election, New Zealand voters will get a chance to legalize their own cannabis industry.

In France, a governmental panel of experts advising the government has recorded the negative consequences of cannabis prohibition and recommended legalization. France is one of the countries with the highest per capita consumption of illicit cannabis and at the same time has the strictest legislation to enforce prohibition.

Recently, contradictory reports have come from Italy, where at least „Cannabis Light“ should be legalised.

However, Luxembourg remains the highlight of the European development of legalization. The details of the legislative reform are to be worked out over the next two years. Thus Luxembourg will become a sting in the European community of states to finally break new ground in the use of cannabis for recreational use in Europe. The Minister of Health of Luxembourg, Etienne Schneider, has already called on the European neighboring countries to reconsider their cannabis legislation and develop a common position.

Turning point in the CDU

In view of these worldwide developments, the first votes from the CDU parliamentary group in the Bundestag came in October, questioning the party’s previous cannabis policy. Marian Wendt and Karin Maag openly admitted that the Union (CDU/CSU) is considering legalization. They could be the first serious conservative voices to allow a rethinking of existing cannabis policies among conservatives. Both stated that the party is increasingly reporting discontent to the Bundestag faction, in federal states and municipalities, as the situation on the ground no longer justifies the rigid attitude of the past decades.

In the Union we have often seen that people have long resisted social trends and liberal demands, such as the nuclear power plant phase-out, homosexual marriage and the abolition of conscription. However, as soon as a majority in the population becomes apparent, everything can suddenly happen very quickly. After decades of stagnation, this development in the Union can certainly be described as a turning point. Not least in North America, one can see the considerable economic potential that can result from legalizing cannabis. As soon as the Union as a party of the business community understands this potential, even the last resistance to a new start in drug policy will crumble.

Outlook

After the evaluation of the mid-term results and the SPD party conference with the election of a new leadership, the grand coalition now seems to want to govern until the end of the legislative period. This gives the SPD the opportunity to harmonize its decisions on cannabis at federal level. If the SPD decides to decriminalize consumers, there would already be a majority in the Bundestag. Although the FDP voted against a corresponding motion by the Left Party in the summer, this can be neglected as a Berlin tactical skirmish.

The petition of the hemp association as well as the cannabis control law of the Greens are still to be voted on in this legislative period. The Bundestgas groups have expressed a need for further consultation on this issue. As soon as the tactical conditions in the political groups are in place, a vote or a new vote seems quite possible. Here, the next weeks and months and the (re)positioning of the acting forces will have to be awaited.

The Greens, still strong in the polls (20-30%), will be able to present the most comprehensive proposal for the reorganization of cannabis policy with the Cannabis Control Act, which was already introduced in the Bundestag in 2017. By that time, it was dismissed, but it remains likely that this law will become the blueprint for legalization after the next federal elections in 2021 with a new federal government, and with the participation of the Green Party.

In order to avoid a hectic pace from September 2021 onwards, consideration should already be given to the details of a state-controlled distribution of cannabis. The aspects of youth protection and prevention are already considered in detail by the Cannabis Control Act. But do we really want a free market model, with the danger that large companies will end up dividing the market among themselves? Especially when requirements, regulations and conditions (see social concept employee certification) can only be met with immense initial investments? Is legalization also a social issue? What is the tension between the ban on advertising and the need for information in society? How do we manage to set up enough licensed distribution points to actually take up the fight against the black market? How can a German new beginning in drug policy in the European Union fit in?

So, it will remain exciting in 2020!

Stahlhof-Duesseldorf

CBD and Medical Cannabis – the year in review

Original link in German on Leafly.de

An eventful year for the cannabis industry is drawing to a close, time for a review of the year.

CBD

The year began with a completely surprising change in the Novel Food catalogue for cannabinoids. The first existing entry Cannabidiol defined extracts of Cannabis sativa L., in which the contents of CBD were higher than in the original plant, as novel food. In January 2019 the entry was then extended to Cannabinoids. From now on, all extracts from the hemp plant containing cannabinoids should be considered as novel food, regardless of the content.

In March 2019, the German Federal Office for Consumer Protection and Food Safety (BVL) specified the entry in the EU Novel Food Catalogue to the effect that a novel food is to be assumed whenever cannabinoids are specifically enriched or depleted.

We could see in June what the consequences of these changes were. The biggest German drugstore discounter DM had to take its CBD products off the shelves due to official pressure. The distribution ban was expressly justified by the application of the Novel Food Regulation.

But not only the big retail chains were affected by the change, but also many small and innovative hemp shops. Throughout the year there were police actions where not only the illicit CBD flowers were confiscated, but also corresponding CBD food. Be it with reference to the Novel Food Regulation, because the deliberate placing on the market of a novel food is a criminal offence according to § 1a Novel Food Regulation and can be punished with imprisonment up to one year or a fine. Or with reference to the German Medicines Act, if health claims have been made on the product itself or in connection with its specific environment.

The European Industrial Hemp Association (EIHA) has recognized this problem and is continuing its efforts in Brussels to amend the Novel Food catalogue. At its General Assembly in early November, however, it also decided to examine with its members whether joint applications for approval under the Novel Food Regulation make sense and should be implemented. Since 2016, only one application for approval of a CBD product as a novel food has been pending with the European Commission. A prerequisite for the application is the submission of a comprehensive and cost-intensive toxicological report confirming the safety of the product. Due to the immense costs, estimated at 300,000-400,000 €, many entrepreneurs shy away from this step.

In the long term, however, a market authorization according to the Novel Food Regulation will be unavoidable. The cannabis extracts, which contain cannabinoids, are to be qualified as novel foods, was only expressly confirmed by the Düsseldorf Administrative Court at the end of September and by the Hanover Administrative Court in November 2019. In both summary proceedings, the immediate enforcement of the ban on the sale of CBD food supplements was confirmed. The possibility cannot be ruled out that the manufacturing process in the structure of a foodstuff may lead to physical, chemical or biological changes in the ingredients used with potentially serious consequences for public health, the court stated. It is not known whether an appeal was lodged against the judgments in order to attack this little differentiated and intimidating argumentation. The grounds of the two judgments are strikingly similar, so that it can be assumed that other courts will agree with this view. Furthermore, taking into account the long duration of administrative court proceedings, a solution on litigation cannot be expected at this stage.

It is difficult for the consumer to understand the actions of the authorities as a whole. Food inspection in Germany is organized decentrally, and in addition it is completely overburdened and overtaxed both technically and personnel-wise. It is difficult to explain to the public seeking justice why in some cities the ban on CBD flowers and the Novel Food directive is enforced strongly, in some only a little, in many regions and in the Internet not at all.

However, the demand for such products among the population, not only in Germany but worldwide, cannot be ignored. The current handling of these products means that CBD products are now mainly traded on the hardly controllable Internet or are offered as aroma products without any warning or consumption instructions. The question may be raised as to whether this has not done consumer protection a disservice. At any rate, the establishment of quality standards by industry and trade, which could have been guaranteed above all by the large retail chains, failed to materialize in 2019.

For cosmetic products with CBD there was also a change in October. Until October 2019, no cosmetic product containing cannabis extracts was marketable. The CosIng Register, the European database for cosmetic products, had corresponding restrictions as a result of the provision in Article 14 of the European Cosmetics Decree, which refers to the Single Convention of 1961. The EIHA was able to reach with a position paper that at least the leafs were excluded from the scope of Article 14 of the European Cosmetic Decree. Cosmetics with the addition of Cannabis Sativa Leaf Extract is now possible. Whether this will be a manageable alternative for the cosmetics industry remains to be seen.

Medical cannabis

Patient numbers for medical cannabis continue to rise. In 2018, 3.1 tonnes of dried flowers alone were imported and a total of €78 million was reimbursed by health insurance companies for medical cannabis products. From January to June 2019, 54 million € have already been refunded, and 2.5 t of cannabis flowers have been imported, a significant increase again.

In May 2019, the Cannabis Agency successfully completed the award procedure for the cultivation and supply of medicinal cannabis in Germany. 13 lots with a total of 10,400 kg of cannabis were awarded, distributed over four years with 2,600 kg each. The first harvest is expected in the fourth quarter of 2020. The licenses were granted to three companies belonging to Canadian parent companies. The 13 lots of 200 kilograms each of medicinal hemp per year were distributed in five lots each to Aphria and the Berlin company Aurora Germany, making one ton per year. The Berlin startup Demecan is allowed to grow 600 kilograms of cannabis per year thanks to the remaining three lots.

The selling price to the German federal cannabis agency is 2.3 € per gram, as was last announced when the total volume was announced. It remains doubtful whether these prices will enable companies to make a profit in the long term in view of the enormous initial investments in production facilities. The systems must be protected against unauthorized access by third parties with enormous means and must comply with the highest production standards.

If even the possible production increases of 10% are exploited, Germany will continue to depend on imports to meet the demand for medical cannabis. Various European and non-European countries are getting ready to export to the German market and replace Canada and the Netherlands as the only export nations. In September there was already a first delivery of 500 kg from Portugal.

Industry insiders therefore assume that next year there will literally be a glut of medical cannabis on the market and that the supply problems will come to an end.

In June 2019, the Bundestag passed some improvements for cannabis patients through the law for more safety in drug supply. After in-patient treatment with cannabis as a medicine, the health insurance companies must decide within three days whether they will continue to approve the treatment. Patients do not need a new authorisation when changing dosage or switching between dried cannabis flowers or extracts. However, a change to cannabis flowers is still not possible, at least not without a new application.

The law also aims to reduce the price of cannabis from pharmacies. The previous pricing system is to be reformed and the pharmacy surcharge, as it exists up to now, is to be abolished.

An urgently needed step, considering that medical cannabis in the Netherlands, for example, is given to patients for 7 €/g instead of up to 24 €/g.

In May, the results of the accompanying survey were presented, which was adopted with the amendment of the law on cannabis as medicine in 2017. A total of 4774 data records were evaluated. Medical cannabis is most commonly prescribed for pain patients, almost 70%. What was particularly interesting about the study was the finding that patients with cannabis flower therapy are the least likely to report side effects. The discontinuation rate for medical cannabis flower therapy is 12.6%, compared to over 40% for Sativex and dronabinol.

Finally, the motion for a resolution of the European Parliament from February 2019 should be mentioned. MEPs call on member states to provide funding for cannabis research and clear legal definitions of medicinal cannabis. A first step towards harmonizing research and application in the European Union in the field of medical cannabis as well.

In the next column we will deal with the annual review of the developments in the legalization of cannabis for recreational use. Here, too, 2019 was a very exciting year.

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Legalised! – how legalization works in the USA – a travel report

German Version on Leafly.de

As a member of the International Cannabis Bar Association (INCBA), I again had the honor of speaking at the annual Cannabis Law Institute at the New York Law School early October this year. But before that, I decided to visit two states that had already legalized recreational cannabis for some time. The trip started in Denver, the capital of Colorado, from which the change in drug policy in the USA started at that time.

A client had kindly organized a guided tour through a grow. This facility was located in an inconspicuous industrial area of Denver, which can only be guessed from the outside by its massive lattice. We were welcomed by a friendly production manager, who guided us through the complete plant. The entire production process was explained to us, from cloning to trimming to packaging. A vast number of lists record when which room was cleaned, what weight loss results from drying, which water hose was last tested for bacteria and what values were obtained after the analysis. The authorities regularly register for visits and check the strict quality criteria that apply to cultivation in Colorado. The company has to bear up to more than 1000 € analysis costs per month.

In the past, stores in Colorado had to be vertically integrated, i.e. only what was grown by the same company could be sold in the retail stores. This scheme no longer applies, but the inspected grow still supplies his own three shops, which also have to buy in at the wholesale market in order to meet the demand. And everything, really everything works of course only with cash, because at the federal level cannabis is still an illegal substance.

In the dispensary, which is connected to the grow, there was then a friendly bustle. However, the choice was very limited, especially for the new products such as Vape Pens, Edibles and Beverages. Also, it was not very easy to talk to the sellers. A comprehensive consultation could not take place, since questions were always answered very briefly and concisely.
An explanation for this later arose in Seattle, Washington State on the west coast, when I visited a dispensary there and was able to talk to the owner. He reported that on Friday and Saturday up to 2,500 customers had to be served each evening: „We are trying to build a machine here“, he said, in order to cope with a huge crowd. There is no time for detailed discussions about new cannabis products and the mode of action of THC, for example in Edibles. Likewise, the salesmen, who are not specially trained, are instructed to keep this machine running and not to spend too much time with each individual customer.

This practice is far removed from the requirements of the Cannabis Control Act by the Green Party, the draft of which we discussed in the previous blog entries. We remember that specialist cannabis shops must therefore draw up a social concept and the staff working there must acquire the certificate of responsible selling. No one there has time to recognize risky drug use, let alone counteract it. However, dried cannabis flowers are then sold in plastic packaging that is so strong that it can only be opened with a knife or scissors.

He also said that in the end he didn’t believe in the creation of big brands. For him and the local customer it is important that there are always enough fresh flowers available at the best price. The customer would only pay attention to this and not to which brand it comes from. With finished products such as vapes and edibles this is something different, but with dried flowers it can be compared to buying potatoes on the marketplace. There it depends on the freshness and variety of the potato, but not on the farmer who sells it.

The CBD market is similarly confusing as in Europe, with the individual states each having their own regulations. Large drugstore chains in Washington offer a variety of CBD products in a small locked cabinet that must be unlocked by personnel. In New York there are also hemp shops as we know them from Germany. There CBD flowers, hemp seed oil, CBD oil and animal products with CBD are offered. All of the US is waiting for the FDA to decide how to regulate CBD products.

At the conference in New York Law School, it was impressive to see how committed and detailed the struggle is for a responsible solution for individual products. In a podium discussion, the regulators from the states, which will soon introduce legalization, reported for example how wax, an extremely high-percentage THC extract, is to be used or smoked by consumers for so-called dabbing. The aim of dabbing is to absorb as much active substance as possible effectively, which is very popular with certain patients in medical applications but can also trigger extreme intoxication among inexperienced users. „We are not happy with that“, so the tenor that Wax in Dispensaries would be available for purchase without further explanation or introduction to this practice.

Then the Canadian in-house lawyers of large licensed producers of medical cannabis reported how impressed they were with the records of various „master growers“ who were formerly active on the black market. They had meticulously kept records of their breeding results over decades, creating stable varieties from which the legal producers are still a long way off. This is an interesting aspect which not only concerns intellectual property issues, but also legalization as a social issue.

The vaping crisis was of course also an issue. It was agreed that hasty bans on liquids were no solution, as they would then be traded on the black market and cause even more problems. Legalization of cannabis at the federal level would be preferable, so that uniform quality standards and testing routines could be defined and monitored by the federal authorities.

New York itself is still struggling for legalization, but consumption has already been decriminalized. There are illegal consumption rooms, so-called Speakeasy, in which people can consume and buy. In the biggest and best-known New York Speakeasy an event took place on a topic that we here in Germany have to deal with in the long run. Steve de Angelo, the US-American pioneer of the legalization movement, introduced the „Last Prisoner Project“: „We will not rest and stop until the last cannabis prisoner is released“. Dealing with the rehabilitation of former offenders convicted of cannabis offences without violence is also one of the debates on legalization, similar to the 2017 German law on the criminal rehabilitation of consensual homosexual acts.
Overall, a progressive and responsible debate is taking place in the USA and in more and more states the black market is being replaced by a regulated market.

One would like more German regulators and politicians to look at these developments and debates in detail, perhaps to get an impression on the ground more often and discover the potential for society and the economy. How legalization works can now be seen, not in the model, but live.

Kai-Friedrich Niermann