Court of Appeal ruling raises hope for clarification on CBD legal status

Cannabidiol (known as ‘CBD’ for short), is a non-psychotropic extract found in the cannabis plant, which means that its consumption does not make a person high. Rather, it is claimed that it can help ease anxiety, pain and insomnia (research is ongoing in relation to these claims). The CBD market has been growing expeditiously in recent years and, according to a report commissioned by the Association for the Cannabinoid Industry, CBD sales in the UK valued at £690 million in 2021, with the British public now spending more on CBD supplements than Vitamins B and C combined. 

“Hemp” is a term used to describe any part of the cannabis plant that contains 0.3% or less Tetrahydrocannabinol (‘THC’) content. Hemp is often cultivated specifically for industrial or medicinal use. THC is the major psychoactive component and one of the many cannabinoids recognised in cannabis (there are over 100). CBD flower is the bud of a cannabis plant that contains high amounts of CBD and low amounts of THC. The THC level in hemp is so low, that it is unlikely to cause a high; however, THC is the psychoactive part of the cannabis plant and is a controlled drug pursuant to the Misuse of Drugs legislation.

Despite being regulated by the Food Standards Agency (‘FSA’) since 2020, the legal status of CBD remains a grey area as most CBD products contain traces of THC. Although CBD manufacturers remove THC from their products, it is not possible to remove all traces, and so, no matter how small the quantity of THC is, its presence ‘arguably’ renders the product as illegal to possess, sell or transport. 

This has caused significant difficulties for the CBD industry, with the Home Office taking action against a number of manufacturers in recent years. This legal limbo has led to CBD suppliers calling on the Home Office to provide urgent clarification on the legal position if they are to continue operating in the UK.     

Landmark Court of Appeal ruling

A recent decision of the Court of Appeal may offer some clarity to the industry however, as it crucially held that low-THC products are not to be considered a “narcotic drug”.

The ruling has established a new legal precedent for UK businesses importing and selling CBD or low-THC hemp flower, as the Court of Appeal made it clear that it does not consider hemp flower with a THC content below 0.2% to be a narcotic.

R v. Margiotta – the facts

In brief, the case involved an online UK CBD flower retailer, which imported and sold hemp. The company imported a batch of CBD flower from Italy – where it is legally grown – which contained less than 0.2% THC content. The shipment was intercepted by UK Customs and the owners of the company were subsequently arrested and charged with importing cannabis. The Misuse of Drugs Act 1971 does not define cannabis in relation to THC content, and therefore treats hemp flower as a controlled substance, regardless of the THC content. Many have long argued that this is a restricting factor for the CBD and hemp industries.

The defendants successfully challenged the charges at the Crown Court, and subsequently at the Court of Appeal, on the basis that EU law took precedence over UK law at the time of the importation (as the UK had not yet left the EU), and under EU law it was unlawful to place any restriction on the movement of hemp with a THC level of below 0.2% as it was considered an agricultural commodity. The Court of Appeal agreed with that analysis and ruled that no offence had been committed.  

The full judgment can be read here. 

Effect of this ruling on the CBD flower industry

This judgment has been welcomed by many in the industry, but it is important to note that the ruling does not legalise the trade of low-THC hemp in the UK. It does however make a strong argument against the prosecution of businesses importing and selling low-THC products in the UK pre-Brexit. What was key to the success of this case was that the trading took place before Brexit (31 January 2020), when laws regarding the freedom of movement of goods across the EU still applied. As a result, businesses will not be able to use the same defence for activities post-Brexit. It is likely, however, to impact the number of prosecutions brought in similar cases.

We will have to watch and wait to see how the Government and regulatory bodies will react to the ruling, which in effect confirms that CBD flower is not a narcotic drug, and therefore should not be controlled as one.

Regulators in France last year ruled that an absolute ban on the marketing of raw CBD hemp flowers and leaves was disproportionate, and that the sale of CBD in leaf and flower form does not pose a risk to public health. The ruling means that consumers in France are now able to legally buy CBD hemp flowers and leaves. 

The true impact of R v. Margiotta is yet to be seen, however it has given hope to UK CBD flower businesses that it could lead to legislative changes and perhaps even a similar decision to that in France. 

Further information

If you have any questions, please contact Shannett Thompson in our Regulatory team.

About the authors

Shannett Thompson is a Partner in the Regulatory Team and is the firm’s Training Principal. She has trained in the NHS and commenced her career exclusively defending doctors. She provides regulatory advice predominantly in the health and social care and education sectors.