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Cannabis Is Now Attracting Investors From All Over The World – What Is The Current Legal Status In These Global Jurisdictions? Is There An Adequate Legal Framework? –


Author(s): IR Global, Ricardo dos Santos de
Almeida Vieira, Bruno Weil, Margret Knitter, Kenji Kuroda, Kris
Scicluna, John Wolfs, Thomas Curran, Duncan Manville and Brandi
Balanda

Brasil – Ricardo dos Santos de Almeida Vieira – Partner,
Barcellos Tucunduva Advogados

The legislation on cannabis in Brazil is federal, with no
differences between states and cities. Therefore, we do not see
banking risks as a problem in Brazil – unlike the US, for
example.

The evolution of CBD research throughout the world has pushed
Brazilian legislation to allow access to certain cannabis products,
including the direct importation of industrialized cannabis-based
products by the patients themselves, provided certain requirements
are met.

Still, the process is bureaucratic and difficult to access for a
large part of the population. In our opinion, there are no
perspectives for the release of recreational use in the short
term.

In any case, as this is a new market in Brazil, there are
opportunities for investment in the medical cannabis market in
Brazil.

France – Bruno Weil – WEIL & ASSOCIÉS

Legalisation of cannabis is a recurrent topic in France. The
legal uncertainty regarding the marketing of CBD flowers has
persisted for years. A decision by the Court of Justice of the
European Union, dated 19 November 2020, invalidated France’s
prohibition to sell CBD products authorised in other European
Member State where harmful effects on health could not be
demonstrated, on the basis of the freedom of movement of goods.

In light of this decision and under the pressure from the
changes underway in other European countries, legalisation of
cannabis has reached a new milestone in France.

On 23 June 2021, the French Supreme Court (“Cour de
cassation”) stated that flowers legally produced in a European
country cannot be banned in France.

A Decree dated 30th December 2021 extended the authorisation for
cultivation, import, export, and industrial use of certain
varieties of cannabis with a THC content of less than 0,3% in all
parts of the plant.

However, and as mentioned in question 1, the sale to consumers
of raw flowers or leaves is still prohibited. Many French
association officially and publicly opposed these restrictions and
requested the Highest French Administrative Court (“Conseil
d’Etat”) to cancel the further prohibition applicable to
raw flowers and leaves. On 24 January 2022, the Conseil d’Etat
decided to suspend the enforcement of the decree provisions related
to the prohibition of sales to consumers, possession, and
consumption of flowers and leaves in their raw state. The final
decision has not been issued yet. Therefore, CBD stores and
tobaccos had to stop selling raw flower and leaves from the
beginning of this year.

Germany – Margret Knitter – SKW Schwarz Rechtsanwälte

Medical cannabis has only been legal since 2017 in Germany.
Recreational cannabis is still illegal in Germany. However, the
German coalition partners have agreed to introduce legislative
proposals, which will govern how the intention “to legalize
cannabis for recreational use” will be implemented. The
regulatory requirements differ depending on the legal
classification of the relevant product. The question of whether and
how a product containing CBD can be legally placed on the market is
essentially governed by the provisions of the BtMG, the Medicinal
Products Act (“Arzneimittelgesetz” – AMG), if applicable
the Medical Device Regulation (MDR) or the European and national
regulations on foodstuffs and cosmetics.

With regard to the regulatory status of narcotics, reference is
made to what was mentioned under item 1.

Products that qualify as finished medicinal products within the
meaning of the AMG are generally subject to marketing authorization
(see sect. 21 AMG). Without marketing authorization, finished
medicinal products cannot be marketed. Any distribution without
authorization is punishable by law. The authorization must be
obtained from the BfArM or the European Medicines Agency (EMA).
Furthermore, the manufacturer of the product requires inter alia a
manufacturing authorization according to sect. 13 para. 1 sent. 1
AMG. This does not apply for extemporaneous mixtures prepared in
pharmacies. The preparation of extemporaneous mixtures is subject
to the Pharmacy Practice Order (Apothekenbetriebsordnung -
ApBetrO).

If the product is a food, the placing on the market is governed
by directly applicable Community Law, namely the Regulation (EC)
No. 178/2002, the so-called General Food Law Regulation
(Lebensmittelverordnung), as well as by some national German
regulations, inter alia the German Food and Feed Code (Lebens- and
Futtermittelgesetzbuch – LFGB), the Food Supplement Regulation
(Nahrungsmittelergänzungsverordnung – NemV) as well as the
European Regulation on Novel Foods (Neuartige
Lebensmittel-Verordnung – NLV).

If the product is a cosmetic, the Regulation (EU) No 655/2013
and the Cosmetics Regulation (Kosmetikverordnung) is
applicable.

Japan – Kenji Kuroda – Kuroda Law Offices

The current regulatory status in Japan is as follows, and
adequate framework is not yet in place. CBD is not regulated as a
substance.

However, the current Cannabis Control Act regulates cannabis
products by focusing on the part of the cannabis plant rather than
the ingredients contained therein, so almost all handling
(including import/ export, possession, giving and receiving; this
also includes application and reception for pharmaceutical
products) of CBD products derived from the cannabis plant
(including pharmaceuticals) is prohibited and offenders are
punished, excepting those products where no regulated parts of the
cannabis plant (parts other than mature stems or seeds) are used.
Therefore, no pharmaceuticals derived from the cannabis plant
(including Epidiolex) have been approved in Japan yet.

On the other hand, CBD products (including cannabis- derived
products and chemically synthesized products) are actually
regulated by focusing exclusively on the THC content, which
partially deviates from the regulations set forth in law.

Specifically, when importing CBD products into Japan, documents
showing not only that regulated parts of the cannabis plant are not
used (or that they are chemically synthesized products), but the
component analysis results for THC content must be submitted to the
regulatory agency. In addition, the MHLW has announced that if THC
is detected even in trace amounts in CBD products distributed in
Japan, the product will be suspected of violating the Cannabis
Control Act. In that case, the product may be forcibly discontinued
or recalled, depending on the circumstances.

Currently, the MHLW is considering revisions to the relevant
laws and regulations in view of promoting the appropriate use of
cannabis and CBD, including lifting of the ban on medical cannabis
and introducing cannabis regulations focusing on its component
(THC) (instead of the part of the cannabis plant), and it is
expected that the law will be revised next year at the
earliest.

Malta – Kris Scicluna – AE Business Advisors

The cannabis legal framework in Malta is now one of the most
progressive within the EU and beyond. That said, the situation
created by the new law is not yet satisfactory and requires
refinement. There is still too much scope for conflict between the
obvious spirit of the law and the actual enforcement on the
ground:

There still is uncertainty amongst public authorities, like the
police, over what legally constitutes legal cannabis. Indeed, a
petition has recently been presented to the Parliament of Malta
urging lawmakers to amend Malta’s year-old cannabis laws to
explicitly exclude forms of cannabis that do not provide any
‘high’ from the threat of prosecution.

The situation came to a head with the arraignment last March
(2022) of a medical doctor, Andrew Agius, who stands accused of
importing and trafficking the drug after police seized CBD cannabis
flowers from his clinic, a pain treatment centre, last
February.

The case revolves around the interpretation of the
abovementioned 2021 definition of CBD ‘product’ in the
penal code.

When Agius was charged in court, prosecutors argued that the CBD
flower they seized from his clinic is a narcotic and subject to
seizure and prosecution.

Agius’ lawyers, on the other hand, say that the flower in
question contained less than 0.2% THC and is a CBD
‘product’, much like CBD oil, shampoo, or facial cream,
which can all be sold without restrictions. The situation has led
the petitioners to ask MPs to fix this legislative anomaly by
explicitly excluding all CBD products, including flowers, leaves
and resin, from the scope of criminal prosecution and to start a
public discussion about business and agricultural opportunities
concerning CBD and hemp products. Petitioners also refer to
classifying CBD as a ‘novel food’, something the European
Commission is in the process of doing after following the
aforementioned CJEU judgement.

Netherlands – John Wolfs – Wolfs Advocaten

In light of the current discussion about whether or not (a
product containing) CBD is considered to be a novel food under the
EU Novel Food Regulation (Regulation 2015/2283), I have received
many questions regarding the legal status of CBD products in the
Netherlands.

With regard to the legal status and the risks for marketing
resulting from the applicability of the Novel Food Regulation, it
is important to note that a policy of tolerance applies with
respect to CBD products in the Netherlands. In practice, law
enforcement in the Netherlands is focused on the use of
unauthorized medical claims. All the more reason to seek legal
advice prior to making any claims about your CBD products. Despite
the policy of tolerance, there are nevertheless certain risks
associated with the marketing of CBD products.

In the Netherlands, the Dutch Food and Consumer Authority (known
as the NVWA in short) is one of the supervisory authorities with
regard to the compliance of Dutch food laws and European
regulations with the aim of safeguarding human health. The NVWA has
various enforcement instruments at its disposal. Depending on the
seriousness of the violation, it can take corrective and
sanctioning measures, including fines, penalties and seizure of
products.

In the Dutch Manual on Novel Foods (published by the NVWA) it is
stated that if the NVWA determines that novel foods are traded that
are not included in the Union list an administrative fine will, in
principle, be imposed.

US – Massachusetts – Thomas Curran – Curran Antonelli

In the Commonwealth of Massachusetts marijuana use by adults 21
years of age or older is legal both recreationally and medically.
To buy medical-grade marijuana products patients with qualifying
conditions must be approved by a physician, given a prescription
for the use of medical marijuana, and an issued medical marijuana
card must be presented before purchase. In order to promote safety,
all purchasers of marijuana products from a retailer are required
to show a government-issued ID and individuals can only have up to
1oz of marijuana on them when they are outside of the home.
Additionally, using marijuana products in a public place is
prohibited, as is driving while under the influence of marijuana
products.

There are regulations for each step in the marijuana product
sales process: commercial growers (cultivators), manufacturers,
registered marijuana dispensaries or retail stores, and delivery.
Each of these titles comes with their own licensing process that
can quickly become costly – the annual licensing fee for a
cultivator varies based on the size of the cultivator but can reach
up to $50,000, the annual licensing fee for a manufacturing license
is $10,000, the annual licensing fee for a dispensary license is
$10,000, and the annual delivery licensing fee is $10,000. These
fees help ensure that only well financed and legitimate marijuana
businesses can sell to consumers.

It is important to note that municipalities and towns in
Massachusetts can further regulate the use of marijuana products
within their jurisdictions. Each jurisdiction can zone the adult
use of marijuana and has the option to ban marijuana delivery
within its borders.

Additionally, towns can restrict the number of allowed marijuana
establishments and govern the time, place, and manner of the
operating marijuana establishments. Marijuana sales come with an
excise tax, standard sales tax, and an optional local tax, making
the marijuana business profitable for the state and more well
regulated.

US – Washington – Duncan Manville and Brandi Balanda – Savitt
Bruce & Willey LLP

Under the federal Controlled Substances Act of 1970 (21 U.S.C.
§ 801 et seq.), cannabis is a Schedule I substance the
possession and use of which is unlawful. Under Washington law,
however, cannabis is broadly legal for medical use, and also for
recreational use by adults. In 1998, the Medical Use of Cannabis
Act (codified at RCW ch. 69.51A) made it legal for patients with
qualifying medical conditions to use cannabis and to possess and
grow it in small quantities. In 2012, Initiative 502 (codified at
RCW chs. 69.50, 46.20, 46.61 and 46.04) legalized the recreational
use of cannabis by adults, subject to purchase limits and other
restrictions. There is, of course, considerable tension between
federal laws making the production, sale, possession and use of
cannabis illegal, and state laws and county and municipal
ordinances legalizing and regulating these activities.

To date, the federal government has not cracked down on cannabis
businesses or consumers acting in accordance with state law. But
federal enforcement of the Controlled Substances Act remains a
possibility. Indeed, in January 2018, then-U.S. Attorney General
Jeff Sessions issued a memorandum rescinding a 2013 policy
statement known as the “Cole Memo,” which had given
cannabis businesses some breathing room in jurisdictions where
cannabis was legal under state law. The rescission of the Cole Memo
signaled a return to a more hard-line approach to the enforcement
of federal cannabis laws, although this has not translated to a
material change in federal practice.

Of greater day-to-day significance to cannabis producers and
retailers is the fact that many banks will not do business directly
with them, either out of concern over possible federal government
sanctions, or because of the additional regulatory burdens
attendant to servicing the cannabis industry. Moreover, although
some cannabis retailers claim to accept credit cards, the major
credit card companies do not allow their cards to be used for
cannabis purchases. As a result, cannabis remains basically a cash
business in Washington, even for producers and retailers who are
operating legally under state law.

To read additional questions from the publication ‘Attracting Investor Interest: Will the cannabis
industry be allowed to blossom?
‘ click the following link:
https://www.irglobal.com/publications/will-the-cannabis-industry-be-allowed-to-blossom/

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.



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