France briefly had a vibrant CBD market, with products sold frequently through coffee shops, CBD stores and smoke shops. However, in October 2018 the Ministry of Drugs concluded that all transactions involving cannabis, including most hemp products, were prohibited by law and began enforcement against retailers carrying these products. Products were banned from sale if they contained greater than 0.2% THC content or were extracted from cannabis (including hemp) flower or leaves, essentially banning CBD, which created a chaotic market with police raids to CBD specialty shops and resulted in a halt of sales in 2019. While personal use of CBD is "technically" legal in France, products are limited, and the formal market is on pause as retail itself has been banned.

In addition to country's already confusing legal landscape, the European Commission's Novel Foods reclassification on CBD-infused products added more complication. Even if it allows (or is forced by the court to allow) CBD product back on the market, France, being a conservative country, is likely to embrace Novel Foods regulations and limit legal use of CBD to smokables and topicals until companies get the necessary authorization through that channel. Adding to this, COVID-19 struggles and subsequent economic stalls will slow down the market even further should it come online. However, as France does not have an established legal cannabis market that can provide a substitute at present, it can be expected that consumers' demand for legal CBD products will remain strong if and when the regulations and legitimacy of the products are sorted out and they may re-enter the formal market.

Regulatory Analysis

In May 2017, the Minister of Health Agnes Buzyn stated that CBD products and cannabis were legal, as long as the products adhered to a 0.2% THC limit and no health claims were made about the products. Cannabis coffee shops appeared in Paris in mid-2018, selling high-CBD, low-THC strains, also known as 'ultralight weed' or 'le weed light'. These shops, such as ‘Cofyshop’ and ‘E-Klop’, sold products such as CBD-infused syrup, sweets, oils, and balms, certifying that products had less than 0.2% THC. The sudden surge in CBD Specialty Stores / coffee shops, as well as CBD’s substitution for tobacco in vapes and smokable products sold at coffee shops, head shops, and tobacco shops around the country, prompted a swift response from an anti-drug and increasingly anti-tobacco government. Within a few months, many shops were raided and the majority forced to close.

The Interministerial Mission for Combating Drugs and Addictive Behaviors (MILDECA), France’s agency for combating drugs and addiction, released a statement regarding CBD on June 11, 2018 stating that only cannabis seeds and fiber can be used for industrial and commercial purposes. The use of flower or leaves is prohibited - effectively banning CBD sales. MILDECA clarified the threshold of 0.2% THC is not for the finished product but for the plant itself. In addition, the presence of THC in finished products, regardless of the concentration, is prohibited. In addition, advertisements for CBD-containing products may confuse CBD and cannabis, and promoting cannabis and use of narcotics constitutes a criminal offense, thus - for all intents and purposes - advertising has also been prohibited in the country even if the formal CBD market should re-open.

As a consequence of these bans, drug related sentences were passed regarding hemp electronic cigarettes. The cases placed limitations on the origins of CBD products, which contradict freedom of movement of goods policies within the European Union. Courts decided to take this to the European Court of Justice and get an opinion on whether by prohibiting CBD e-cigarettes, France is disrespecting European Union regulations. While the defendants have based their claims on one of the pillars of the European Union, the French Republic argued that "the precautionary principle justifies the use of restrictive measures." The representative of the European Commission, Alexander Lewis said "The precautionary principle applies when there is scientific uncertainty, but in this case, there is little or no scientific uncertainty about the effects of CBD on human health." The Advocate General of the EU Court of Justice was expected to deliver their opinion on March 31, 2020 and a further decision was expected in the following months. However, due to COVID-19, the cases are delayed, and as of April 2020 no opinions regarding this matter have been published. The response of the court could establish jurisprudence and change France's restrictive approach to CBD.

To further complicate matters for CBD businesses, towards the end of 2018, the European Commission updated its Novel Food definition to include all cannabis - and thus CBD-infused - ingestible products, and should France ultimately open up the CBD market pursuant to the court's decision, it is likely to adhere to Novel Foods policy and maintain the ban on ingestibles pending European Commission authorization.

Competitive Landscape

Because of new restrictions regarding the production and sales of CBD products, the market is on pause in the country. Thus, while many companies continue to operate in the shadows, importing small amounts of CBD products at a time from nearby countries such as Switzerland, major competitors are taking a hiatus and not formally operating during this time of legal uncertainty. Small shops selling CBD are still popping up, but without any marijuana imagery and including instructions dictating that buds being sold are not to be smoked.

Distribution Analysis

The most successful channels that existed prior to the government crackdown were CBD specialty stores, coffee shops, and smoke shops. The same channels are expected to re-surge once legal CBD products with trace amounts of THC may once again be appropriately tested and sold, and manufacturers and distribution channels are permitted to operate by regulatory authorities.

Product Type Analysis

Flower had the largest market share in 2018, with over 40%, though legal sales are no longer taking place in the country today. Cartridges made up the second largest product type in 2018, followed by tinctures. In a country where smoking (tobacco and otherwise) is highly popular, smokable CBD products - both a supplement to and substitute for tobacco - have been highly successful and are expected to continue drawing a great deal of formal market share once they are authorized by state regulators for commercial production and sales.