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CBD oil legality in the EU: A changing landscape

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You’ve probably heard the hype already about the trendy benefits of CBD Oil. It is a natural substance derived from the hemp plant popping up in all kinds of forms in Europe’s food and beauty industry thanks to its medicinal properties.

Today, Europe has the 2nd largest CBD market in the world –only behind North America. From CBD gummies and potato chips to CBD facial masks, every entrepreneur wants in on this booming industry.

As of writing, CBD is legal in most European countries, explaining the meteoric rise in CBD use in the continent. However, it hasn’t been all plain sailing for this budding market –the pun intended.

Enter the EU’s restrictive CBD oil regulations. While the European CBD market is expanding exponentially, the ever-changing rules on CBD legality have proved a major handicap.

Let’s look at what CBD oil is, its legality in Europe, and what the future holds for CBD legality in Europe

What is CBD oil?

Not to be confused with hemp oil, CBD oil is the most popular form of Cannabidiol (CBD) –an active naturally occurring cannabinoid found in cannabis plants. CBD is mainly extracted from the hemp tree and then dissolved into plant-based oils such as olive oil or castor oil to form CBD oil. Many people of all ages are now experimenting with this miracle item in some form or the other. These days, some people prefer to purchase cannabis seeds from online stores like Zamnesia to grow in the comfort of their own homes. This allows them to experience different effects, flavours, and aromas.

Most people use the terms CBD oil and hemp oil interchangeably since both are hemp extracts. However, these two oils couldn’t be more different. For instance, while CBD oil is extracted from the leaves, stem and flowers of the hemp, hemp oil is explicitly obtained from the hemp seeds. What’s more, hemp seeds don’t contain any CBD; hence, hemp oil doesn’t have CBD oil's health benefits.

What about THC, the ingredient that made the cannabis plant famous, you ask. Well, Tetrahydrocannabinol (THC) is another active cannabinoid mainly found in the marijuana plant –a cousin of the hemp plant. THC is known for its psychoactive effects, which give you the “high.”

The World Health Organisation (WHO) reports that CBD oil doesn’t have any of these psychoactive effects, unlike THC. Besides, since the hemp plant only contains very low THC levels (less than 0.2%), most European countries’ CBD regulations stipulate that products use hemp-extracted CBD only. More on this later.

Is CBD oil legal in the EU?

While it has been legal to cultivate and supply hemp plants for hemp fibre (with less than 0.2% THC) in the EU for some time now, CBD oil legality around Europe is quite complex.

That said, Europe stands out as one of the most liberal regions in terms of cannabis legalisation. Today, CBD oil is legal in almost all countries in Europe. However, there is still a lack of consensus on CBD products' legality –the only consensus seems to be on the use of CBD extracted from the hemp plant.

For instance, in the UK, farmers are allowed to grow hemp as long as you have a licence from the UK Home Office. However, you can only use this hemp for its fibre and seed oil. And as we noted earlier, the seeds do not contain any CBD.

Therefore, while the use of CBD products — derived from hemp containing less than 0.2% THC — and growing hemp is perfectly legal in the UK, you cannot harvest and process hemp flowers and leaves for CBD oil, among other products.

In other countries such as Belgium, Greece and Switzerland, the regulations allow for the cultivation and processing of hemp flower.

Switzerland was among the first countries to allow the sale of hemp flower. Besides, their regulations allow for a higher THC limit (1%), which means they have high-quality CBD buds.

Other countries with notably high THC limits include Italy (0.6%) and Austria (0.3%).

Here is a list of countries in Europe where hemp flower and CBD products are legal:

  • Switzerland
  • Belgium
  • Luxembourg
  • Austria
  • Spain
  • Czech Republic
  • Greece
  • Poland

It’s worth noting that while the sale and use of CBD flowers is illegal in countries such as Italy, France, Germany, the UK, Netherlands, Sweden and other Scandinavian countries, CBD products are entirely legal – subject to local laws.

CBD is completely illegal in Andorra, Albania, Armenia, Belarus, Lithuania and Slovakia.

CBD regulation as a novel food

In January 2019, the EU, through the European Food Safety Authority (EFSA), directed all cannabinoid-infused food products to be approved as novel foods. Well, although this new regulation is not mandatory, most countries are applying it and tightening their laws around the CBD market.

A substance is considered a novel food if it was not consumed significantly before 1997. This means companies manufacturing CBD products such as oils, cookies and drinks must have a novel food license before selling them within the EU.

The idea behind this regulation is to make sure CBD products are:

  • Safer for human consumption, and;
  • properly labelled to prevent misleading consumers.

The call for CBD's inclusion in the EU’s Novel Food Catalogue has led to an uproar across the cannabis industry. While some people believe it will make CBD products safer, CBD manufacturers see it as an extra financial and regulatory burden.

Classification of CBD as a narcotic by EU

Before the dust had settled on EU’s regulation of CBD as a novel food, the European Commission (EC) decided to pause all Novel Food applications for CBD products. They intend to classify CBD as a narcotic since it is extracted from the hemp plant's flowers.

This is based on the UN’s Single Convention on Narcotic Drugs from 1961. The treaty states that “extracts and tinctures” of hemp’s flowering tops are classed as narcotics.

If classified as a narcotic, this will stifle current Europe’s CBD market. For instance, you’ll be unable to retail CBD products on the European market legally. Besides, this is likely to hinder cannabinoid research and innovation in Europe while also stifling opportunities for a legal and regulated CBD industry.

However, as expected, the European Industrial Hemp Association (EIHA) has come out and rejected the decision. The trade group decries this controversial policy is against both the EU’s green ambition and the growing CBD demand in Europe.

There are valid fears that enforcing this policy might create a large unregulated grey CBD market leading to low-quality products and improper labeling.

A changing landscape: What the future holds for CBD oil in Europe

Enforcing prohibitions on the current ever-growing CBD market will be costly. What’s more, with the economic contraction facing the EU countries in the post-COVID-19 era, member states are unlikely to invest heavily in CBD-focused polices.

Besides, we already have countries such as the UK deviating from the EU’s novel food rule. TheUK’s Food Safety Association (FSA)already has plans to operate its own independent novel food approval program in 2021.

Therefore, CBD manufacturers will not have to worry about EC’s decision to pause the novel food applications. The program will allow UK operators to submit applications for CBD extracted from hemp flowers opening clear pathways to legal CBD sales.

On the other hand, the European Commission is yet to issue a final decision on their recommendation as they await on the UN’s Committee on Narcotic Drugs (CND) vote regarding the amendment of the 1961 cannabis treaty. The main proposals involve deleting the extracts and tinctures of the cannabis category and clarifying the control of CBD products with less than 0.2% THC.

It is difficult to tell when this vote will happen. However, one thing is certain; the decision will be quite disruptive – not only in Europe but also throughout the world’s CBD market.

That said, Europe’s CBD demand is on an unstoppable upward growth. As we wait on the regulatory bodies’ verdict, it is always advisable to use CBD products from registered and trusted companies. Also, remember to check for third-party lab reports to confirm the product's safety and legality before purchase.

Climate change

Big business seeks unified, market-based approaches ahead of climate summit

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Corporate executives and investors say they want world leaders at next week’s climate summit to embrace a unified and market-based approach to slashing their carbon emissions, write Ross Kerber and Simon Jessop.

The request reflects the business world’s growing acceptance that the world needs to sharply reduce global greenhouse gas emissions, as well as its fear that doing so too quickly could lead governments to set heavy-handed or fragmented rules that choke international trade and hurt profits.

The United States is hoping to reclaim its leadership in combating climate change when it hosts the 22-23 April Leaders Summit on Climate.

Key to that effort will be pledging to cut US emissions by at least half by 2030, as well as securing agreements from allies to do the same.

“Climate change is a global problem, and what companies are looking to avoid is a fragmented approach where the US, China and the EU each does its own thing, and you wind up with a myriad of different methodologies,” said Tim Adams, chief executive of the Institute of International Finance, a Washington-based trade association.

He said he hopes U.S. President Joe Biden and the 40 other world leaders invited to the virtual summit will move toward adopting common, private-sector solutions to reaching their climate goals, such as setting up new carbon markets, or funding technologies like carbon-capture systems.

Private investors have increasingly been supportive of ambitious climate action, pouring record amounts of cash into funds that pick investments using environmental and social criteria.

That in turn has helped shift the rhetoric of industries that once minimized the risks of climate change.

The American Petroleum Institute, which represents oil companies, for example, said last month it supported steps to reduce emissions such as putting a price on carbon and accelerating the development of carbon capture and other technologies.

API Senior Vice President Frank Macchiarola said that in developing a new U.S. carbon cutting target, the United States should balance environmental goals with maintaining U.S. competitiveness.

“Over the long-term, the world is going to demand more energy, not less, and any target should reflect that reality and account for the significant technological advancements that will be required to accelerate the pace of emissions reductions,” Macchiarola said.

Labor groups like the AFL-CIO, the largest federation of U.S. labor unions, meanwhile, back steps to protect U.S. jobs like taxing goods made in countries that have less onerous emissions regulations.

AFL-CIO spokesman Tim Schlittner said the group hopes the summit will produce “a clear signal that carbon border adjustments are on the table to protect energy-intensive sectors”.

Industry wish lists

Automakers, whose vehicles make up a big chunk of global emissions, are under pressure to phase out petroleum-fueled internal combustion engines. Industry leaders General Motors Co and Volkswagen have already declared ambitious plans to move toward selling only electric vehicles.

But to ease the transition to electric vehicles, US and European automakers say they want subsidies to expand charging infrastructure and encourage sales.

The National Mining Association, the US industry trade group for miners, said it supports carbon capture technology to reduce the industry’s climate footprint. It also wants leaders to understand that lithium, copper and other metals are needed to manufacture electric vehicles.

“We hope that the summit brings new attention to the mineral supply chains that underpin the deployment of advanced energy technologies, such as electric vehicles,” said Ashley Burke, the NMA’s spokeswoman.

The agriculture industry, meanwhile, is looking for market-based programs to help it cut its emissions, which stack up to around 25% of the global total.

Industry giants such as Bayer AG and Cargill Inc have launched programs encouraging farming techniques that keep carbon in the soil.

Biden’s Department of Agriculture is looking to expand such programs, and has suggested creating a “carbon bank” that could pay farmers for carbon capture on their farms.

For their part, money managers and banks want policymakers to help standardize accounting rules for how companies report environmental and other sustainability-related risks, something that could help them avoid laggards on climate change.

“Our industry has an important role to play in supporting companies’ transition to a more sustainable future, but to do so it is vital we have clear and consistent data on the climate-related risks faced by companies,” said Chris Cummings, CEO of the Investment Association in London.

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Brexit

UK asks for more time to respond to EU Brexit legal action: RTE TV

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Britain has asked for more time to respond to legal action taken by the European Union over its unilateral decision to ease requirements of the Northern Ireland Protocol, Ireland’s RTE television reported on Wednesday (14 April), writes Conor Humphries.

“The request came in two letters from the UK’s chief Brexit minister David Frost,” RTE correspondent Tony Connelly said in a Twitter post.

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EU

Team Europe increased Official Development Assistance to €66.8 billion as the world's leading donor in 2020

EU Reporter Correspondent

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The EU and its 27 member states have significantly increased their Official Development Assistance (ODA) for partner countries to €66.8 billion in 2020. This is a 15% increase in nominal terms and equivalent to 0.50% of collective Gross National Income (GNI), up from 0.41% in 2019, according to preliminary figures published today by the Organization for Economic Co-operation and Development's Development Assistance Committee (OECD-DAC). The EU and its member states thereby confirm their position as the world's leading donor, providing 46% of global assistance from the EU and other DAC donors, and have taken a major leap forward towards meeting the commitment to provide at least 0.7% of collective GNI as ODA by 2030.

International Partnerships Commissioner Jutta Urpilainen said: “Team Europe has significantly increased its contribution of Official Development Assistance compared to last year. This is crucial at a time when so many people in our partner countries face significant health, economic and social challenges linked to the COVID-19 crisis. The latest figures show that 10 years ahead of the due date to deliver on our commitment to provide 0.7% of our collective GNI as ODA, we are more determined than ever to achieve this target.”

Overall, 17 Member States increased their ODA in nominal terms in 2020 compared to 2019, with the strongest nominal increases coming from Germany (+€3.310bn), France (+€1.499bn) and Sweden (+€921 million), and further increases coming from Austria, Belgium, Bulgaria, Croatia, Cyprus, Denmark, Finland, Hungary, Latvia, Malta, Poland, Romania, Slovakia and Slovenia. The EU institutions' ODA (meaning the European Commission and the EIB) increased by €3.7bn (27%) overall in 2020 in nominal terms. 15 member states improved their ODA relative to their GNI by at least 0.01 percentage points: Austria, Belgium, Bulgaria, Croatia, Denmark, Finland, France, Germany, Hungary, Latvia, Malta, Romania, Slovakia, Spain and Sweden. In Cyprus and Greece, ODA as a share of GNI decreased by at least 0.01 percentage points.

In response to the coronavirus pandemic, the EU, its member states, and the European financial institutions, together with the European Investment Bank and the European Bank for Reconstruction and Development, have combined their financial resources as Team Europe, mobilising over €40bn in support to partner countries in 2020. 65% of this amount was already disbursed in 2020 in support of the immediate humanitarian needs; health, water, sanitation and nutrition systems, as well as tackling the social and economic consequences of the pandemic. The unprecedented nature of the COVID-19 crisis has put a huge stress on public finances and debt sustainability of many developing countries, affecting their ability to achieve the Sustainable Development Goals. This is why, in May 2020, President von der Leyen called for a Global Recovery Initiative, linking debt relief and investment to the SDGs to promote a green, digital, just and resilient recovery. The Global Recovery Initiative is about shifting to policy choices supporting green and digital transitions, social inclusiveness and human development while enhancing debt sustainability in partner countries.

ODA is one of the sources of financing to deliver on the SDGs, although more transparency is needed on all sources of finance for sustainable development. As an important step in that direction, data on Total Official Support for Sustainable Development (TOSSD) has been collected and published for the first time, increasing transparency on all officially-supported resources for the SDGs, including South-South co-operation, support to global public goods such as vaccine research and climate mitigation as well as private finance mobilized by official interventions.

Background

The data published today is based on preliminary information reported by the EU Member States to the OECD pending detailed final data to be published by OECD by early 2022. EU collective ODA consists of the total ODA spending of EU member states and the ODA of the EU institutions not attributed to individual member states or the UK (notably own resources of the European Investment Bank and, for the first time in 2020, special macro-financial assistance loans on a grant equivalent basis).

Despite its withdrawal from the European Union taking effect on 1 February 2020, the United Kingdom still contributed funding in the form of ODA to the EU budget and the European Development Fund in 2020. This is included in the EU institutions' ODA. However, in order to avoid double-counting between the ODA reported as EU collective ODA and the ODA reported by the United Kingdom itself, the United Kingdom's contribution to EU institutions is not included in what is reported as EU collective ODA.

Four EU member states already exceeded the 0.7% target of ODA as a share of GNI in 2020: Sweden (1.14%), Luxembourg (1.02%), Denmark (0.73%) and Germany (0.73%).

When highlighting the member states which increased or decreased their ODA as a share of GNI, only cases where the change amounts to at least 0.01 percentage points (based on exact rather than rounded values) are taken into account, while member states for which the change is smaller than 0.01 percentage points in either direction are considered to have kept their ODA as a share of GNI stable.

The EU and its member states thereby perform significantly above the average of non-EU DAC donors in terms of their ODA as a share of GNI, standing at 0.50% compared to 0.26% by the aggregate of all non-EU DAC donors.

In May 2015, the European Council reaffirmed its commitment to increase collective ODA to 0.7% of EU collective GNI by 2030. Since 2015, on a flow basis, ODA by the EU and its current 27 member states has grown by 37% (€18.7bn) in nominal terms while the ODA/GNI ratio has increased by 0.1 percentage points. The year 2020 marks a turn in the previous trend of declining ODA since the 2016 climax when the EU and its then 28 member states' ODA reached 0.52% of GNI. This turn is due partly to an absolute increase in collective ODA in nominal terms, and partly to an absolute decrease in collective GNI in nominal terms. The EU is also committed to give collectively between 0.15% and 0.20% of the EU GNI in the short term to Least Developed Countries (LDCs) and 0.20% by 2030. Since 2015, on a flow basis, ODA by the EU and its current 27 member states to LDCs has grown by 34% (€3.5bn) in nominal terms to reach €13.8bn (0.10% of GNI) in 2019, and the ODA to LDCs/GNI ratio has increased by 0.01 percentage points. Moreover, compared to 2018, the EU and its then 28 member states increased their aggregate ODA to Africa by 3.6% in nominal terms to €25.9bn in 2019. Data on ODA to LDCs, Africa and other specific recipients for 2020 are expected by early 2022.

Scaling up sustainable finance and private sector engagement in partner countries is essential, coupled with reforms to enhance business climates, as meeting the challenges of the Global Recovery Initiative cannot be achieved by ODA alone. The EU has been instrumental in bringing together aid, investment, trade, domestic resource mobilisation and policies designed to unlock the full potential of all financial flows. The European Fund for Sustainable Development guarantee in particular has played a key role in unlocking additional finance for partner countries. Over the last year alone, the EU signed €1.55bn worth of financial guarantees with our partner financial institutions, leveraging over €17bn of investments – also helping to ensure that recovery from the pandemic is green, digital, just and resilient.

More information

Q&A on preliminary figures on 2020 Official Development Assistance for the EU and its member states 

Annex Preliminary Figures on 2020 Official Development Assistance, Tables and Graphs for the EU and its member states

Commission's publication of figures on the global COVID-19 response

OECD press release

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