Creso Pharma Limited (ASX:CPH( (FRA:1X8) is ready to capitalise on the Court of Justice of the European Union’s (CJEU) ruling that cannabidiol (CBD) products can be sold freely in the European Union (EU) and that member states must not prohibit the marketing of lawfully produced CBD.
The landmark ruling is a major development and provides considerable opportunities for Creso Pharma.
It already has commercial agreements in place in the Iberian markets and is very well funded to pursue a number of growth initiatives.
Unlocks significant opportunities
Creso Pharma non-executive chairman Adam Blumenthal said: “The decision by the CJEU unlocks a number of significant opportunities for Creso Pharma, in a market that the company already has an established presence.
“The European market has always played an important role in the company’s growth trajectory and the most recent regulatory shift will allow us to continue to progress a number of near term initiatives, engineered to unlock value for shareholders.
“We welcome this development and look forward to providing further updates in due course.”
Shares have been as much as 20% higher in early ASX trading to A$0.042.
On November 19, 2020, the CJEU ruled that lawfully produced CBD is not considered a narcotic.
In arriving at the decision, the CJEU noted that, according to the current state of scientific knowledge, the CBD involved does not appear to have any psychotropic effect or any harmful effect on human health and therefore cannot be classified as a narcotic drug.
While a literal interpretation of the United Nations Single Convention on Narcotic Drugs might lead to CBD being classified as a drug, this would be contrary to the general spirit of that convention stated in the court ruling summary.
The case arose when hemp-derived CBD products produced in the Czech Republic were imported into France for use in other products.
Criminal proceedings were launched on the basis of a claim that French legislation only allows for the fibre and seeds of hemp to be put to commercial use.
It was determined that the aforementioned legislation did not apply to CBD derived from a whole hemp plant as it was not a listed agricultural product, and therefore hemp-derived CBD products are not restricted by the relevant legislation.
Shift in regulatory environment
Creso Pharma has also observed the shifts in the regulatory environment across the globe.
The latest regulatory shift in Europe complements the recent interim decision by the Therapeutic Goods Administration (TGA) to allow Australian consumers to purchase CBD products over-the-counter through pharmacies without the requirement of a prescription.
These developments confirm a significant regulatory shift in Creso Pharma’s favour and present growth opportunities in new jurisdictions to complement the recent strong demand for its products in Canada and South Africa.
Creso Pharma is actively exploring a number of strategies to grow market share in Europe and Australia.
CBD market worth at least €1.5 billion by 2023
According to the Orian Research Group, the current market size for CBD in Europe is about €450 million, representing 31% of the global CBD oil market share.
It is suggested that CBD products market could account over 0.15% of the health and wellness market value by 2028.
According to the latest research by the Global Wellness Institute, the worldwide wellness market grew 12.9% from $3.72 trillion in 2017 to $4.2 trillion (€3.5 trillion) in 2018.
The European CBD market is projected to be worth at least €1.5 billion by 2023.