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LexCast: CBD – Novel Food or Narcotic? with Daniel Haymann and KFN+

The European Commission recently announced that all CBD Novel Food applications are put on hold while it reviews whether CBD should not be classified as a food, but instead as a narcotic under the United Nations Single Convention on Narcotics of 1961. This re-classification could potentially have wide-ranging and detrimental consequences on a fast-growing industry in Europe.

Listen to our LexCast and our conversation with Kai-Friedrich Niermann, one of the leading authorities on all regulatory questions relating to cannabis, and in particular CBD, in Germany, about the confusions surrounding the potential re-classification of CBD in Europe. Also, you can look forward to a short announcement at the end of the episode.

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Cannabis Law Institute – 2020

I am looking forward to speaking at The Cannabis Law Institute 2020 for a day exploring International & Cross-Border Issues related to Cannabis Law taking place Thursday, Oct. 15th from the comfort of your home office. Register here: with code NIER15 in order to receive 15% off and join us for this month-long exploration of Cannabis Legalization.

International Cross-Border Markets, 15th of October 2020, Track Chairs: Kai-Friedrich Niermann, Lawyer, KFN+

The historic designation of cannabis as a restricted substance by the UN under the Single Convention on Narcotics has, from the middle of the 20th century until recently, preclude commercial international cannabis trade. But with renewed interest in the hemp industry and the popularity of CBD products, global trade is the future. And it’s not just CBD and hemp as the cannabis plant keeps delivering the discovery of novel cannabinoids and researchers and the private sector continue to identify the health benefits of the psychoactive properties of cannabis and explore other cannabinoids and their impact on health outcomes and commercial products. This track explores the cross border hemp trade and the future of THC and non-THC cannabinoids in a global marketplace.

Opening Keynote with Pavel Patcha on Inter Se Modification

Domestic regulatory progress is required to create vibrant cannabis markets – but what about our international obligations and running afoul of our treaty obligations. The UN Single Convention on Narcotics governs permissible domestic regulation, and certain counties, like Canada, have breached those obligations by implementing an adult use market. Here in the US – our own government argues we remain compliant because the federal government continues to prohibit cannabis – while the rest of the world recognizes we fell out of compliance as soon as Washington State passed the first adult use regime in the US.

But what are the consequences of non-compliance, and how can we fix it? Enter Pavel Patcha – with decades of experience with the International Narcotics Control Board, hear from one of the premier experts in the world on the process of inter-se modification – whereby a member country can give notice of withdrawal from the single convention, and rejoin absent the provisions prohibiting cannabis.

Session 1

Import/Export: The Cross-Border Hemp Trade

Hemp is making its way around the world. As the industrial component of the Cannabis Sativa L. plant, hemp has benefited from the lower set of regulatory strictures as compared to psychoactive cannabis. The import and export of hemp to and from the European Union has become common, and the CBD markets are maturing. Take a look at the legal hemp trade, how biomass is moving, and what import and retail of cbd looks like around the world.

Panelists:

Bob Hoban – President of Hoban Law Group and Hemp Entrepreneur
Lorenza Romanese – Managing director of the European Industrial Hemp Association (EIHA)
David Wenger – General Counsel of Asia Horizon Group, Cannabis investor, US Senate/House Cannabis Working Groups member
Evelyn van Keymeulen – Lawyer (Allen & Overy), leading the most import cannabis case in 2020 before the European Court of Justice
Kai-Friedrich Niermann – Lawyer and founder (KFN+ Law Office), European Cannabis consultant, Moderator

Legal Trafficking – The global THC supply chain of the future

Session 2

This panel will reflect on the future trade of THC products and how such trade can function without between countries, above and beyond the existing Single Convention. We see that besides Canada and Uruguay, other countries are on the starting blocks to fundamentally change their cannabis policies. Apart from the USA, next year’s change of cannabis policy could include Germany, as there are federal elections and a new government will be highly likely. Luxembourg has already decided on legalization and New Zealand is holding a referendum on it in November this year. Not in every case the local demand will be covered by local cultivation. Domestic cultivation is not even sensible from an environmental point of view, as too much energy is consumed in northern regions. In Germany alone, the demand for dried flowers from a legal and regulated export market is estimated with 500-600 tons. If new and modern products like Vape-Pens, Edibles and Beverages are developed, some countries and regions already have a know-how advantage which predestines them for the export of the products. This session will look at how an international supply chain for recreational cannabis products can be designed and how the enormous demand for products from legal markets can be satisfied. What conditions need to be created at the level of international law to make global trade possible? And what about import duties, safety standards and Intellectual Property?

Panelists:

Jason Moscovici – Canada, Moderator
Fabiana Penades – Uruguay (tbc)
John Walsh – USA
Kai-Friedrich Niermann – Germany
Simon Rowell, New Zealand

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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.

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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.

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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