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COWEN COLLABORATIVE INSIGHTS February 25, 2019 _ European Landscape European Parliament Resolution In February 2019, the European Parliament passed a significant resolution to create harmonized policies and standardized practices for medical cannabis products in the EU. The Parliament stressed the importance of conducting clinical trials, which requires a formal assessment of socio-economic and regulatory barriers that have prohibited access to research in the past. This is not a legislative, binding resolution; the European Commission will need to consider a regulatory framework that permits access and availability to cannabis medicine, therapies and scientific studies. The European Parliament explicitly stated support for the WHO's recommendations to institutionalize the medical and scientific uses of cannabis. Having these two international institutions aligned on standardizing medical cannabis policies will facilitate support for interstate agreements and trade, and paves way for rapid legislative change and growth. EU Standards And Regulations There is not a supranational regulatory framework for cannabis in the EU. However, general standards, such as Good Manufacturing Practice (GMP), Good Agricultural and Collection Practice and Good Distribution Practice, are now significant for cannabis compliance. Licenses and authorization must be obtained for certification. This is especially required for pharmaceutical grade cannabis, which is why many Canadian LPs can export to Europe and made investments to build GMP-certified facilities. Although not necessary for non-prescribed cannabis, products with GMP-certification have trusted quality recognition across the EU. In the EU, the legal limit for THC content is less than 0.2%, in comparison to North America where it is less than 0.3% THC. There are some disparities across the continent with higher margins in Italy (up to 0.6%) and various import requirements country to country. Outside of the EU, Switzerland permits up to 1% THC content, which is treated as a tobacco substitute. EU Novel Food Recently, CBD has been added to the European Union's (EU) Novel Food Catalogue. Foodstuff may be supplements, ingredients or other substance forms. A “novel” food is a product not previously consumed in the EU, to a significant degree, prior to May 15, 1997, such as for example, foods that enter the market through new technology or agricultural products normally consumed and grown outside of the EU (e.g. chia seeds, vitamin K, UV treated food). Amendments to the Catalogue occur frequently and provide a regulatory framework for EU Member States (MS) to follow. Some MS (i.e. UK, France, Germany, Italy, and Holland) requested to update the catalogue with CBD and hemp-derived products. The European Food Safety Authority (EFSA) is now conducting a risk assessment for CBD. This categorization includes pure CBD extracts and products that contain CBD extracts. The EFSA’s assessment is limited to a daily intake of 130 milligrams. The outcome of the review is expected in March 2019. By October 2019, the European Commission will release a draft act to authorize CBD in the updated Catalogue. While the EFSA assesses CBD, some countries have already banned the sale of CBD and removed product from the shelves (e.g. France, Austria). MS may have their national food or health agencies provide further guidance for CBD products and preparations. Obtaining authorization for CBD and hemp-derived products (e.g. tinctures, edibles, 80 COWEN.COM HOUSE_OVERSIGHT_024896