Rocking the boat – is the party over for consumer CBD products in the UK?

Heard the one about the UK’s plans to ‘halt CBD imports’? David Hardstaff, associate & John Binns, partner in the Cannabis law & Regulation team at BCL Solicitors consider that the truth is less scary – but not by much…

Why the sudden panic?

 

Near the end of a cold, grim January in the UK, the Minister of State for Crime and Policing, Kit Malthouse MP, wrote to the Advisory Council on the Misuse of Drugs. He was asking for advice in relation to consumer CBD products, noting that there has been a proliferation of CBD products online and on the high street in recent years.

Reflecting longstanding Home Office policy, the letter continued, “While as an isolated substance CBD is not a controlled drug, there is recent evidence that many of the products available contain controlled cannabinoids, and that it is difficult to isolate pure CBD.”

What does the law say?

 

CBD is, indeed, not a controlled drug in the UK.  But the position of the Home Office is that it is difficult to extract pure CBD from cannabis without any trace element of THC. Despite this, surprisingly, law enforcement have until now shown a degree of tolerance when it comes to CBD products containing small, trace amounts of THC. This has allowed businesses to thrive, and the industry to become a visible and respectable presence on the high street. You might struggle to find fresh fruit and veg, but you won’t have any difficulty finding CBD infused dog popcorn.

Making the law work for CBD

 

A reliance on certain legal exemptions has until now been used by businesses to argue that where products contain less than 1mg of THC in each product (or ‘preparation’), they do not require a licence to be possessed and supplied. Does this amount to using a crowbar to force these provisions to work for the CBD industry? Maybe. Critics may say that the exempt product provisions were designed to facilitate scientific and diagnostic testing, not to enable consumer products to bypass the licensing regime.

Clarity at last…?

 

On one hand, the minister’s intervention may be welcomed by many in the CBD industry, who have called for greater clarity on the legal status of products containing trace elements of THC. On the other hand, his letter risks rocking the boat, and disturbing what until now has been a sort of gentleman’s agreement between the Home Office, law enforcement, and businesses. It risks playing into the hands of those who say law enforcement have simply been turning a blind eye to CBD products, many of which, on a strict reading of the law, contain controlled drugs, possessed and supplied without licence.

No more ‘blind eyes’?

 

Until clarity is achieved, the Home Office and law enforcement may feel under pressure to adopt a stricter approach when it comes to consumer CBD products and their legal status. Strikingly, Mr Malthouse’s letter proposes that a permitted trace percentage in CBD products be set at a level which will be between 0.01% and 0.0001% by weight per controlled cannabinoid. That leaves open the question of how restrictive an approach the Council will suggest.

What happens now?

 

At least some of the minister’s concern may be misconceived. Bulk imports of CBD isolate are already routinely seized on entry into the UK, on the basis that they contain more than 1mg of THC per container. Arguing that these products do not require a controlled drug licence, based on the law as is currently stands, is very difficult to justify.

How then has the CBD industry been able to function, and indeed flourish, in the way that it has? The answer is simple: the industry has grown faster than the ability of the Government, firstly, to understand it, and secondly, to contain it. The genie is well and truly out of the bottle.

A more important industry than ever

 

It seems unlikely that the outcome of the minister’s intervention will be to shut down the now sizeable UK CBD industry. The timing would be particularly bad, as patients are meanwhile struggling to access cannabis-based medicines due to increased pressure on the health service as a result of the pandemic. Preventing the supply of safe, non-psychoactive consumer CBD products is likely to make that problem even worse.

So – should we expect the clarity the UK’s CBD industry needs to be delivered overnight? No – not if the Government’s track record on cannabis is anything to go by. Will the industry be allowed to collapse in the meantime? Almost certainly not. But for those who sell, or have plans to sell, in the UK, the question is this: if the policing minister is asking whether you are breaking the law, how confident are you, that you’re not?

 

By David Hardstaff and John Binns

About the authors

David Hardstaff

David is an associate in BCL’s serious and general crime department, specialising in criminal litigation, regulatory law, controlled drug licensing, and proceeds of crime. He has particular experience in representing individuals accused of sexual offences, drugs offences and offences involving violence. In addition to his criminal practice, David advises companies and institutions in relation to applications to the Home Office for controlled drug licences, particularly in the context of research into cannabis.

John Binns

John is a partner specialising in all aspects of business crime, with a particular interest in confiscation, civil recovery and money laundering under the Proceeds of Crime Act 2002 (“POCA”). His business crime experience includes representing suspects, defendants and witnesses in cases invoking allegations of bribery and corruption, fraud (including carbon credits, carousel/MTIC, land-banking, Ponzi and pyramid scheme frauds), insider trading, market abuse, price-fixing, sanctions-busting, and tax evasion. He has coordinated and undertaken corporate investigations and defended in cases brought by BEIS, the FCA, HMRC, NCA, OFT, SFO and others.

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