International Shipping Rules on CBD

Cannabidiol as an international commodity

Regulations establishing the guidelines on the cultivation, processing, use, and commercialization of cannabis has changed significantly in the last few years. Initially, the policies on cannabis and cannabis-derived products were focused squarely on regulated cultivation of cannabis and its use for medical purposes in selected chronic illnesses. The new rules currently enacted in different parts of the globe address the commodity status of cannabis and its share in a booming interstate trade. In the United States, the 2018 Farm Bill expressly recognized hemp-derived cannabidiol as a commodity and allowed a licensed cultivator to market CBD-derived products via interstate commerce. 

Relaxing the strict rules on cannabis products opened up a new channel of opportunity for licensed cultivators as the volume of production increased significantly. Beyond personal use and domestic use in industries, cannabidiol is now a lucrative commercial product crossing international boundaries. In 2019, the international trade—import alone—in cannabis oil alone was estimated at $ 3.1 billion, with the export value totaling $2.9 million. In the United States, the sale of hemp-derived CBD is projected to reach $1,299 million by 2022. Projected value is expected to be driven by a large network of distribution and a supply chain that extends beyond state and federal boundaries. As of 2019, consumption stats in the U.S. suggests that more than one quarter of Americans have tried a CBD product. In all, these stats indicate that the commercialization of cannabidiol presentations in countries where it is legal is rapidly evolving.   

For economic reasons and the healthy trade balance sheet that large volume exports offer, state authorities have decided to invest heavily in the CBD market. In 2017, the Greece government legalized cannabis use for medical purposes, and by 2019 more than ten private companies have been licensed to grow medicinal cannabis—a move projected to create 770 jobs and $214 million in investment capital. Unlike in different parts of the world, the Greece cannabis cultivation program is predominantly export-oriented with trade interests from the cannabis markets in Israel and Canada. Just as in Greece, lawmakers around the globe have developed a strict legal framework not just for cannabis cultivation but also for cannabis transportation and trade across state boundaries. 

The trend of international shipping of cannabis-derived products

The trend of cannabis legalization globally has supplied the needed push for international trade in cannabis and cannabis-derived products. Some countries depend on imported cannabis for medical and scientific purposes as existing local policy prohibits cannabis cultivation. As expected, cannabis trade—and by extension, CBD trade has grown tremendously over the years. 

In 2019, licensed cannabis producers in Canada exported approximately 3,800 kilograms of dried cannabis to international trade partners, with Germany as a major destination for this product. In 2019, Germany’s international cannabis trade stats revealed that the country imported about 6,700 kilograms of medical cannabis for internal redistribution and stock for its dispensaries.  

In Europe, Germany is considered the largest market for cannabis products in large parts of its pro-cannabis laws and a rapidly evolving medical cannabis market. As of 2019, the annual sales record for medical cannabis in this country amounted to $192 million—a significant part of the over $230 million records for annual sales across Europe. Globally, the cannabis export market is largest in Canada as international trade stats for exported cannabis-derived products totals hundreds of millions annually. 

Cannabis oil is considered the most widely traded cannabis-derived product across international boundaries. In 2019, Asian countries recouped the highest dollar value from this product with a joint shipment value pegged at $1.5 billion—a 51.9% portion of the total global cannabis shipment value. European exporters recorded 29.2% of the total export value, North America recorded 12.7%, Africa recorded 3.5%, Latin America recorded 2.1%, and Oceania recorded 0.6%. 

Regulations guiding international shipping of cannabidiol

As with other commodities, international trade and shipment of cannabidiol and other cannabis-derived products are subject to international rules. The cannabis policy of the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) holds that under international laws, the cultivation, use, possession, and supply of cannabis is allowed only for medical and scientific purposes. Currently, cannabidiol is the most researched cannabis-derived product with enormous therapeutic effects in rare and chronic diseases. 

With reference to the Single Convention on Narcotic Drugs 1961 (as amended by the 1972 protocol) and the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotic Substances of 1988, all countries are expected to regulate cannabis trade and shipment in accordance with international drug control conventions. In Canada, only licensed traders under the Cannabis Regulation are allowed to import or export cannabis-derived products. Currently, the International Conventions on the shipment of cannabis products across state boundaries for medical and scientific purposes are based on four major criteria: licensing, potency, origin, and testing requirements. 

On licensing, all exporting or importing companies with an interest in international trade of cannabidiol must be granted a trade permit by the host country under the strict regulation of the international conventions. Most importantly, all shipments of cannabidiol and other cannabis-derived products must be sourced from a licensed supplier or producer. Testing requirement policies mandates that all cannabis-derived products meant for international trade must be tested and evaluated by a licensed third-party for compliance with international standards of purity and integrity. 

Cannabidiol circulated for international trade is also required to be derived exclusively from hemp, as marijuana-derived products remain largely illegal in different parts of the world. This is important to regulate the THC content of the products. Convention rules also mandate that all cannabidiol shipments traded across international boundaries must have a THC level below 0.3%. In a bid to consistently meet international standards, some countries have pegged the legal THC at 0.2% for cannabidiol and cannabis-derived products distributed across international boundaries. Other guidelines on cannabis trading also regulate packaging, labeling and volume allowed per shipment lot. In Canada, residents are only allowed to distribute a maximum of 30 grams of dried recreational cannabis within state boundaries. Lot size per shipment in international trade is regulated by Health Canada.   

Cannabis is a strictly regulated product with vast economic potential in the international market. As the global policy change positively affects the production and distribution of cannabis-derived products, more cannabidiol is expected to cross international boundaries for medical and scientific purposes in the coming years.  

REFERENCES

• https://www.statista.com/statistics/980357/cbd-sales-channel-us/
• https://www.consumerrepots.org/cbd/cbd-goes-mainstream/
• https://www.worldstopexports.com/cannabis-oils-imports-by-country/
• https://mjbizdaily.com/canada-exported-record-amount-of-dried-cannabis-2019/amp/
• https://www.bigcommerce.com/blog/shipping-cbd/
• https://www.emcdda.europa.eu/publications/topic-overviews/cannabis-policy/html_en