The growing trend of medical cannabis and CBD products: What is the current situation?

Recently, our law firm has seen an increase in the interest of domestic and foreign clients interested in the cannabis or CBD products market in the Czech Republic. These entrepreneurs focus mainly on the cultivation, production, distribution and domestic or cross-border sale of medicinal cannabis and CBD products. Czech legislation allows for the cultivation, production, processing and distribution of cannabis and CBD products provided that the relevant conditions are met, which we describe below.

Cultivation of the cannabis plant for medicinal use

Section 24 of Act No 167/1998 Coll., on Addictive Substances and on Amendments to Certain Other Acts, prohibits the cultivation of species and varieties of the cannabis plant (genus Cannabis) other than technical cannabis plants (containing no more than 1% of substances of the tetrahydrocannabinol group - THC), except for cultivation under a licence granted under this Act.

Thus, if a cannabis plant contains more than 1 % THC, it may only be cultivated as a medicinal cannabis plant and only under the relevant licences. However, if the cannabis plant contains less than 1% THC, then it can be freely handled without any permit or licence (except for the obligation to notify the customs authority in the case of cultivation of cannabis on an area larger than 100 m²). The Czech Republic is one of the few EU Member States that has set the limit of THC in technical cannabis that can be freely handled without a licence so high. The THC limit in technical hemp is around 0.2% - 0.3% in most Member States.

Only a legal or natural person who holds a licence to cultivate cannabis plants for medicinal use and who also holds a licence for the handling of addictive substances and preparations for activities related to the handling of cannabis for medicinal use can be a cultivator of a cannabis plant for medicinal use (i.e. with a THC content of more than 1 %).

Production and distribution of medicinal cannabis for medicinal use

The requirements necessary for the manufacture and distribution of medicinal products containing cannabis for medicinal use are regulated by both the Medicinal Products Act and the Addictive Substances Act. The manufacturer of medicinal cannabis substances for medicinal use must hold a medicinal products manufacturing authorisation, which includes the obligation to hold a certificate of good manufacturing practice issued by the SÚKL. Manufacturers of medicinal substances intended for use in human medicinal products who have their registered office or place of business or organisational unit in the Czech Republic are also obliged to notify the SÚKL of their activities no later than 60 days before the intended commencement of their activities.

If an entrepreneur wants to distribute medicinal cannabis for medicinal use, he must have a distribution permit and a permit to handle addictive substances. If the distributor wants to import cannabis for medicinal use from abroad, he must have a permit to handle addictive substances on the basis of an import permit for addictive substances and preparations issued by the Ministry of Health. Each individual import of addictive substances and preparations requires a permit from the Ministry of Health.

CBD products

The Czech market offers a relatively wide range of products containing CBD. These products come in various forms such as oils, tinctures, jellies, candies, chocolates or capsules. Current practice is that once such a product contains even 1 % THC, it cannot be directly distributed as intended for consumption, inhalation, etc. For this reason, it is therefore common practice to sell products containing THC not as intended for consumption but as a 'collector's product'.

At the same time, the CBD content of food is quite a big issue. According to the European Commission (EC), such products are 'novel foods', as these products were not significantly consumed in EU countries before 15 May 1997 and as such must go through the relevant approval process before they can be marketed.

The European Food Safety Authority (EFSA) approves applications for certification of a number of CBD foods but, according to its own statement, the approval process has been put on hold pending new scientific evidence on the effects of CBD on human health. Following the position of the European Commission, the Ministry of Agriculture informed in April this year that the State Agricultural and Food Inspection Authority (SZPI) is preparing a measure of a general nature to ban the marketing of other CBD products, pending EFSA's opinion. This announcement sparked a series of expert debates that sought to highlight the implications of such a ban and that CBD and other cannabinoids should not be classified as novel foods, given that cannabinoids have been part of the human diet for centuries. Finally, the Prime Minister informed during May that no such measure would now enter into force. Products containing CBD will therefore continue to be available on the Czech market as before, at least for the time being. In this context, the adoption of a new law on psychomodulants, which should lay down detailed conditions for the regulation of this area, is now under discussion.

Should you have any questions regarding the business of cannabis, CBD products or related industries, please do not hesitate to contact us. We will be happy to learn more about your case and provide you with appropriate legal assistance.