202302559 B1 - [2025] EWCA Crim 1149

EU law:

In Criminal proceedings against Hammarsten (C-46201) [2003] ECR 1-781 the court considered provisions of the European Community Treaty which prohibited quantitative restrictions on imports and exports of agricultural products between Member States. Such products included “True hemp (Cannabis sativa), raw or processed but not spun”. Aid was provided to support the growing of hemp, but was subject to limitations including a maximum THC content, initially of 0.3% but reduced to 0.2% after 2001. Swedish legislation classified all plants of the hemp family, including industrial hemp as narcotic drugs. The issue was whether that legislation, which had the effect of prohibiting the cultivation and possession of industrial hemp, was precluded by Community law. The court held that it was.

In Josemans v Burgemeester van Maastrict (C-137/09) [2011] CMLR 19 the European Court of Justice considered a challenge to a local regulation which restricted the use of coffee-shops (in which the sale and consumption of cannabis, in limited quantities and under controlled conditions, was tolerated) to local residents. The issue was whether that restriction offended against the free movement of goods within the European Community.

At [36] the court stated that it was important to bear in mind –

“… that, since the harmfulness of narcotic drugs, including those derived from hemp, such as cannabis, is generally recognised, there is a prohibition in all the Member States on marketing them, with the exception of strictly controlled trade for use for medical and scientific purposes.”

The court observed, at [37], that that legal position was consistent with various international instruments, including the United Nations Single Conventions on Narcotic Drugs (1961, as amended in 1972) and on Psychotropic Substances (1971). It concluded, at [41]:

“It follows that narcotic drugs which are not distributed through channels which are strictly controlled by the competent authorities to be used for medical and scientific purposes are, because their very nature, subject to a prohibition on importation and offering for sale in all the Member States.”

In BS, CA (C-66318) [2021] 2 CMLR 5 the European Court of Justice considered arts. 34 and 36 of the Treaty on the Functioning of the European Union (“TFEU”). Art. 34 prohibits, as between member states, “quantitative restrictions on imports and all measures having equivalent effect”. However, by art. 36, the provisions of art. 34 shall not preclude prohibitions or restrictions on imports justified on grounds of public morality, public policy or public security or of the protection of health and life.

The issues in BS, CA related to the marketing of CBD oil which had a THC level of less than 0.2%. The court, at [59] – [62] referred to the principles established by Josemans. In accordance with those principles, it was necessary to decide whether the CBD products concerned – which had been lawfully produced and marketed in the Czech Republic - were a narcotic drug. The court concluded at [76] that they were not a drug within the meaning of the Single Convention and that accordingly they were goods subject to arts. 34 and 36.

In Margiotta, the defendants carried on a business importing and selling cannabis which had lawfully been grown in Italy and which contained trace levels of THC not exceeding 0.2%. They were charged with offences of being knowingly concerned in the fraudulent evasion of the prohibition on importing controlled drugs, and being concerned in the supply of cannabis to another. The judge in the Crown Court acceded to the defendants’ submission that their prosecution should be stayed as an abuse of the process, on the ground that, having regard to the chemical composition of the imported material and by virtue of article 34 of the TFEU, it was not unlawful for them to import and sell the cannabis plant material. The prosecution appealed against the judge’s ruling. This court dismissed the appeal.

The reasoning of the judge in the Crown Court can be summarised as follows:

Absent any considerations of EU law, the plant material concerned was cannabis within the meaning of the MDA 1971.

It had lawfully been grown in Italy, and contained less than 0.2% THC.

It was therefore for the prosecution to show, “had they sought to do so”, that the plant material was a “narcotic drug” which could not amount to a good to which art. 34 applied. The judge took the view that the prosecution had been wise not to seek to do so, as “only a product whose harmfulness is demonstrated or generally recognised and whose importation and marketing is prohibited in all Member States” may be classified as such.

The plant material did not amount to a narcotic drug, or had not been proved by evidence to be properly classified as such.

The provisions of the MDA 1971 on which the charges were based were measures capable of hindering intra Union trade in the plant material and must therefore be justified on one of the public interest grounds in art. 36.

But the prosecution had not sought to establish any such justification by evidence.

On appeal, this court noted that arts. 34 and 36 were concerned with addressing the single market in agricultural products, which expressly included “True hemp (cannabis sativa), raw or processed but not spun”, and observed (at [33]) that the law of the EU had had to grapple with seeking to apply the principles of the common market to hemp as an agricultural product, whilst acknowledging the status of cannabis as a narcotic.

The court also observed, at [8], that the procedural history of the case in the Crown Court had had the result that the factual position was “neither as clear nor as comprehensive as would be desirable”.

The court made a close analysis of relevant EU Regulations, including (at [48]) Regulation (EU) No 1307/2013, which set out rules for direct payments to farmers under the common agricultural policy, but which included the following limitation: “Areas used for the production of hemp shall only be eligible hectares if the varieties used have a tetrahydrocannabinol content not exceeding 0.2%”. The court also considered in detail the decisions in Criminal proceedings against Hammarsten and BS, CA. It noted, at [61], that at the time of the relevant conduct by the defendants, the TFEU and the EU Regulations had direct effect as a matter of UK domestic law, and that their effect had been continued as “retained EU law” by s3 of the European Union (Withdrawal) Act 2018.

The court concluded that, on the factual findings made in the court below, the judge had been correct to conclude that art. 34 of the TFEU was engaged. It further concluded that, as the prosecution had not advanced any art. 36 argument or evidence, it was not appropriate for the court to consider a justification argument for the first time on appeal.

For those reasons, the court dismissed the prosecution appeal.

The authorities cited to the court in Margiotta (which was heard in June 2023) did not include the recent (October 2022) decision of the High Court of Ireland in Bogusas v Minister for Health and others [2022] IEHC 621 (“Bogusas”). In his judgment dismissing an application for judicial review, Mr Justice Owen held that unauthorised trade in narcotic or psychotropic drugs does not come within art. 34 of the TFEU. He pointed out, at [59], that regulations such as Regulation (EU) No 1307/2013 relate to the protection of the EU common market in raw hemp and hemp seeds for use in agriculture or in industrial processing. He continued, at [60]:

“The 0.2% threshold has no necessary correlation with THC content of preparations derived from processing of parts of the plant which yield psychoactive agents. This threshold is not a measure of safety of non-medicinal use of THC.”

At [11] the judge referred to art. 7 of the 1971 Single Convention, which obliges all contracting parties to forbid unrestricted public access to products containing THC, and stated at [12] that unilateral action or inaction by a Member State which permitted such marketing did not result in the activity becoming lawful in other Member States.

The judge went on to say:

It follows that if a Member State allows use of a Schedule 1 psychoactive substance, such as THC, in a manner which is not permitted under Article 7 of the 1971 Convention, this national rule or concession cannot engage Article 34 of the TFEU. Any activity so permitted remains within the principle that unauthorised trade in narcotic or psychotropic drugs does not come within Article 34. These activities are treated as ‘res extra commercium’.

‘Schedule 1’ narcotic and psychoactive drugs which are not distributed through channels which are strictly controlled by the competent authorities to be used for medical and scientific purposes are, because of their very nature, subject to a prohibition on offering to the public for sake in all Member States.

Even if Article 34 of the TFEU was considered as capable of applying to unrestricted marketing of hemp oil containing THC to the public, the applicant’s claim could not succeed. This is because Article 36 of the TFEU permits Member States to impose restrictions on marketing of goods as precautionary measures for protection of public health. The evidence demonstrates that Irish controls on unrestricted marketing of hemp oil containing any THC to the public are justified on health grounds.

The applicant has not placed any evidence before this Court which shows that current restrictions on unrestricted public access to preparations containing THC may not be fully warranted. Without some evidence on this, his claim that these restrictions are in excess of what is allowed by Article 36 of the TFEU cannot be maintained.”