On Friday, 7 January, a new ruling was made in France outlining the definition of narcotics, raising further questions on the legitimacy of the recent decree prohibiting the sale of CBD flowers.
Last week, the French Constitutional Council made a new ruling on the definition of a narcotic. The ruling declared that in order for a substance to be classed as a narcotic is must be both toxic and addictive.
Previously, France, which is currently in a presidential campaign, did not have a specific definition of narcotics, only a list that has products or substances added to it each year.
Following the conclusion of the industry’s infamous KannaVape case in 2020, the Court of Justice of the European Union (CJEU) declared that CBD is not a narcotic due to the fact it “does not appear to have any psychotropic effect or any harmful effect on human health”.
This led to a new decree in France in December 2021, which enables farmers not to destroy their hemp crops, but which prohibits the sale of CBD flowers to consumers on health grounds.
The new French ruling on narcotics and the new decree seem to directly contradict each other.
The French Association of Cannabinoid Producers spoke at the hearing for the narcotics ruling. On its website, the Association states that: “To be able to practice in the CBD sector in Europe, the French law concerning cannabinoids and its derivatives must evolve and align with the EU.
“Legislative restrictions still prevent the development of the French market and favour foreign markets: it is a real injustice for the French players in the sector who are nevertheless ready to invest and work.
“The slowness of the French administration and the current situation continues to widen the gap with our foreign competitors.”
Speaking to Cannabis Wealth, François-Guillaume Piotrowski, President of the French Association of Cannabinoid Producers, commented: “My reaction about the decision of the Constitutional Court is that this is a good update for the french CBD sector after a hard new regulation on 30 December, because the council has made a precise definition of what is a narcotic in regard of the law and what is not.
“According to their definition, CBD is not a narcotic. So, now it will be the first step to continue justice action [regarding the decree], to obtain a regulation that will be more adapted to the reality of this sector and to the demand of the consumers.”
Regarding the decree, Benjamin-Alexandre Jeanroy, co-founder and CEO at Paris-based Augur Associates, a consulting firm focused on the hemp and cannabis industry, commented: “This situation was back and forth since 2018 with the appearance of the first CBD shops all over the territory.
“Since then, it was not allowed to sell hemp flowers, it was just not directly forbidden. The decree was forced on the Government by the KanaVape case, but also by other cases internal to French jurisdictions.
“We do know that this decree is provisionary. It could last one to three years because it is in contradiction with what’s happening in other EU Member States and is probably going to be attacked at the EU Court of Justice at one point or another.
“What the decree creates is more stability for some actors of the CBD ecosystem. Mostly, for people working with extract with transformed products, and even the right to grow hemp flowers on French territory, as to be able to extract CBD and other minor cannabinoids and terpenes.
“It also brings, I’d say, almost distress to some others. CBD retailers and small farmers who can’t do direct sales to consumers. It just creates still more uncertainty for the people working at that level in shops and for small cannabis farmers.
“What we see is that the government is prioritising other interests – more industrial. And that’s where we are for now.”
Jeanroy says the ruling from the Constitutional Court creates a lot of questions, as its new definition could consider both tobacco and alcohol as a narcotic.
“We could also consider that CBD is not [a narcotic], because it has been clearly defined by the World Health Organization (WHO) and later on by the EU Court, following the KanaVape case, as being non-addictive and non-toxic.
“France recently took the seat of Presidency of the Council of Europe which means that they’re going to preside over many different instances of regulations.
“They are going to use that for many different objectives. One of them is that France is currently in a presidential campaign – so, you have Macron, who wants to project certain things, and has decided that on the topic of drugs, narcotics, cannabis, hemp, he was going to show a prohibitive face, talking to more of the right-wing of his electorate.
“That means that it is currently using EU institutions as a way to foster its internal political plans. You can see that at different levels right now.”
The CBD decree was made on health grounds, and recently a small study came out linking unemployment with the use of cannabis.
“This little study is quite problematic in its methodology,” said Jeanroy. “But it is one thing they are showing in order to advance their political views.
“Another study came out from a small group of pharmacists saying that there are some things that CBD does not work with in terms of interaction. We don’t know enough. We should be very careful. It could be dangerous. Even if we don’t really know why.
“So, this is a direct response from the French government to the ruling of the KanaVape case that said that the only way for France to restrict the access of CBD was to show that there were health issues.”
A direct action initiative is taking place against the decree spearheaded by French cannabis industry bodies. Jeanroy says the process will likely entail judiciary work over the next few years, which will have to take place before the country sees any proper regulation integrating the direct sale of CBD flowers to consumers.
Swiss CBD investment company secures £26.23m funding
Pharma Tech Holding has obtained a capital commitment agreement from LDA Capital.
Pharma Tech Holding SA has secured a CHf30m (£26.23m) investment from global investment group LDA Capital Ltd – with expertise in cross-border transactions including the agriculture, Agri-tech, and CBD industries – which will support its portfolio investments.
Pharma Tech Holding SA invests in innovative businesses with high technological value and scalability potential, mainly in Switzerland and Europe, with a focus on the health-tech, agri-tech, and functional food.
The CHf30m investment from LDA Capital will allow the company to invest and support its portfolio company Blue Sky Swisse SA, which focuses on the extraction of natural active principles from vegetable matrices, vegetable waste, and renewable sources to deliver B2B products under the form of CBD oil, terpenes and waxes.
The factory, located in Biasca, will be built with state of art of extraction technology using supercritical CO2, and will be self-sufficient through the use of solar photovoltaic panels and district heating.
CEO at Pharma Tech Holding, Sabina Del Nigro, commented: “We’re thrilled with this partnership and are so glad that LDA Capital recognises the value of Pharma Tech Holding and its portfolio company, with the aim of creating one of the most innovative hubs for health-tech, agri-tech and functional food.”
Blue Sky Swisse will make high-quality CBD due to a proprietary extraction process, starting from the farming, performed under strict control and culminating with the immediate freezing of the flowers after harvest.
It will also sell “all natural” formulations to increase bioavailability and will invest in the agricultural raw material chain, as well as creating an aeroponic greenhouse in Ticino, to deliver a high-quality GMP pharmaceutical CBD oil.
LDA Capital agreed to commit an amount of up to CHf30m in cash within a maximum of three years. This Capital Commitment will be released based on drawdowns by Pharma Tech Holding, which Pharma Tech Holding has the right to exercise at its sole discretion.
Tenacious Labs acquires CBD pet company Rover’s Wellness
The acquisition is part of Tenacious Labs buy-and-build strategy.
Tenacious Labs has diversified into the pet care market with the acquisition of Rover’s Wellness, which specialises in THC-free CBD.
The acquisition sees the group diversify into the high-growth pet care market for the first time. CBD pet care, according to Prohibition Partners, is expected to see global sales of products reach $424.4m (~£350.83) by 2024, representing a CAGR of 18.6 per cent.
As part of the acquisition, RaChelle Baca-Lobre will join Tenacious Labs as global director of sales – pet division and CPG wholesale and private label. Tenacious has stated that Baca-Lobre’s personal passion for CBD-enriched pet care, as well as her experience in managing a fast-growing brand, will prove invaluable for the Group as it looks to scale up its pet care division over the coming months.
CEO and co-founder of Tenacious Labs, Nicholas Morland, commented: “We are delighted to welcome RaChelle and her team to Tenacious Labs.
“Since launching in 2018, Rover’s Wellness has grown rapidly, launching genuinely market-leading products which have been well received by customers across the US. This acquisition will enable us to kick-start our pet care division, while combining RaChelle’s expertise and Tenacious Labs’ high quality manufacturing capabilities to significantly scale up Rover’s Wellness.
“We look forward to working with her closely over the coming months and years.
Tennessee-based Rover’s Wellness creates high quality products containing all natural, non-GMO ingredients including 100 per cent certified organically grown hemp. The company was founded by Baca-Lobre in 2018 after her own pet was diagnosed with cancer. Rover’s Wellness offers a range of oils, topical salves and treats which use CBD to support joint flexibility and mobility, ease anxiety and promote positive long-term health for dogs, cats and equine.
A core part of the brand’s approach is its commitment to testing and transparency. Leveraging a “seed to sale” approach, Rover’s Wellness works directly with growers and uses state-of-the-art nano technology to extract CBD before purity testing.
Each batch is tested by a certified industrial hemp laboratory, both before and after production, with all lab-results published on its website. This process ensures that none of Rover’s Wellness products contain THC – the psychoactive ingredient in cannabis which is harmful to animals.
Baca-Lobre said: “I am excited to join Tenacious Labs, a group which reflects my desire to create safe, natural and quality products, underpinned by third-party laboratory testing.
“We have enjoyed great success to date, and I believe that by harnessing Tenacious Labs’ best-in-class manufacturing facilities, marketing expertise, and operational support, we can unlock more exciting growth opportunities for Rover’s Wellness and the group’s broader pet care division.”
Tenacious Labs has now completed three acquisitions since launching 12 months ago, including female-focused CBD brand Press Pause and high-quality white-label manufacturer SZM LLC — now operating as TL Manufacturing. The group has also continued to expand, now employing 35 people around the world as it looks to scale up.
SEED Innovations ramps up investment in South West Brands
The company has now invested a total of £500,000 in South West Brands.
SEED Innovations has invested a further £50,000 in CBD company South West Brands Limited.
Focusing on making investments in the medical cannabis, health and wellness spaces, Guernsey-based SEED Innovations made its last investment in South West Brands of £150,000 in 2021, bringing its toady investment in South West Brands to £450,000.
South West Brands, which recently saw its Botanic Lab drinks and supplements added to the UK Food Standard Agency list of CBD products permitted to stay on sale in England and Wales, has recently had two of its products listed in major UK retailers.
Its LoveMeMeMe brand is now stocked in Asos and its FEWE brand will be stocked in Superdrug from September.
CEO of SEED, Ed McDermott, commented: “We have seen some considerable progress made by the team at South West Brands over recent weeks with the launch of their two brands for sale in to Superdrug stores and online at ASOS.
“The products have received a fantastic reception by consumers in what is fast becoming a burgeoning FemTech sector where South West Brands are leading the charge.
“Generating early revenues, with the products now increasingly available, we anticipate seeing a fast uptick in wholesale sales which will further lead to additional product development and hopefully support for the products availability outside of the UK.
“We are pleased to continue to support Rebekah Hall and her team as they build a credible, sustainable and scalable wellness business developing and commercialising their brands.”
CEO of South West Brands, Rebekah Hall, said: “The progress SWB has made in the short time since launch is just the beginning of where we believe our brands can reach. In particular, we are at an exciting juncture in the provision of female wellness solutions with increased awareness infiltrating mainstream audiences and building commercial traction with mainstream retailers.
“With further funding in place, including the support from SEED, we look ahead to continued growth in the UK as well as commercial opportunities in other markets, including the US. “
The investment is by way of a three year, 8 per cent Convertible Loan Note (CLN), and SEED has agreed to convert £50,000 of the 12 month, 8 per cent CLN subscribed for in July 2021 into this three year, 8 per cent CLN.