In the US, Veritas Farms Inc (OTC: VFRM) is a highly successful manufacturer and distributor of CBD products, such as gummies, lotions, tinctures and vegan capsules whilst France lags behind
The World Health Organization may consider that CBD is neither harmful nor addictive, but France stands by its position and continues to penalize any commercialization of CBD products.
Cannabidiol (CBD), a molecule found in cannabis, has been the subject of particular attention since the summer of 2018 from both consumers and police. A multitude of CBD-based products, including cosmetics, e-liquids, sweets, balms, oils have been developed, and numerous shops specializing in CBD products have been set up in France. First discovered in 1940, the structure and composition of the CBD molecule were identified in 1963 by Israeli researcher Raphael Mechoulam. In France CBD is commonly referred to as “light” cannabis.
A year later, Mechoulam discovered THC (tetrahydrocannabinol), a molecule with psychotropic effects that causes euphoric effects commonly known as the “high.” Based on the decree of August 22, 1990 of the Public Health Code for cannabis, French law authorises the cultivation of hemp varieties with less than 0.2% THC. However, legislation prohibits the existence of any trace of THC in the finished product, whether it’s a cosmetic product, food, or other products.
The rising popularity of CBD-based relaxants, accentuated by intense media scrutiny, prompted a number of indictments and convictions, even though CBD is not listed in the February 22, 1990 decree that establishes the list of substances banned in France.
In 2017, the World Health Organization (WHO) concluded that CBD is not harmful and does not have addictive potential. Since the World Anti-Doping Agency removed it from its list of doping substances in 2018, it has been used by athletes for its anti-inflammatory properties.
However, these developments did not convince French authorities, who are standing by their position. “There are currently several dozen legal proceedings in progress,” says Yann Bisiou, lecturer in private law at the Université Paul-Valéry de Montpellier and a drug law specialist. “Sentences are often symbolic, but CBD product shops are often shut down for several months and owners are forbidden to resume their activities. We economically kill the sector,” says Bisiou.
In parallel with the CBD boom, interest in the therapeutic aspect of cannabis (both CBD and THC) is growing. Around 3,000 patients will soon participate in a two-year experiment launched by the National Drug Safety Agency (ANSM). At the same time, at the initiative of Jean-Baptiste Moreau, Member of Parliament for Creuse (LREM), a fact-finding mission on cannabis use will soon be launched by the National Assembly. The analysis will look into both therapeutic cannabis and its recreational aspects.
The signatory MPs believe that Paris is overzealous in interpreting European regulations to ban all products made from hemp flowers. Only hemp fibers and seeds can be traded. While France is the European leader in hemp cultivation, with 50,000 tonnes produced per year, a relaxation of the legislation would open up a market estimated to be worth €1 billion per year. “One third of the people consuming these products are chronic cannabis users. They use them as alternatives,” explains Yann Bisiou, who points out that France is “unable to find an appropriate response even though it is the leading cannabis consuming country in Europe”.
A Boom in North America
The CBD industry faces fewer challenges across the Atlantic. In North America, the huge potential of the CBD products market is demonstrated by Veritas Farms Inc, a company based in Fort Lauderdale, Florida. The company owns a 140 acre industrial hemp farm, in Pueblo, Colorado, from where its nine product categories come from. Focused on transparency and offering high quality products, Veritas announced that the company released a QR code packaging with which customers can check the products’ quality on their smartphones.
In the last year, Veritas Farms Inc (OTC: VFRM) experienced impressive growth. In Q2 2019 Veritas generated more than $2.9 million in total revenue and that is a 500% increase since Q2 2018. Their gross profits reached $1,523,413 and thanks to great results, they managed to reduce the liabilities by over $1.3 million.
The success of the North American CBD products industry might be a decisive factor in how France and other European markets see CBD products in the future.