Small-cap cannabidiol product (CBD) manufacturer, Creso Pharma, surged 29% after the Court of Justice of the European Union (CJEU) ruled that cannabidiol products are not considered a narcotic, and as a result, CBD can be freely sold in the European Union. On 19 November 2020, the CJEU ruled that member states must not prohibit the marketing of lawfully produced CBD.
In arriving at the decision, the CJEU noted that, according to the current state of scientific knowledge, the CBD involved doesn’t 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 UN 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.
Creso Pharma notes that this landmark ruling is a major development and provides considerable opportunities, which the company will seek to capitalise on immediately.
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. While the projected European CBD market is anticipated to be worth at least €1.5 billion by 2023.
Creso Pharma also notes it has been observing the shifts in the regulatory environment across the globe, with the latest shift in Europe complementing 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.
The company is actively exploring a number of strategies to grow market share in Europe and Australia and anticipates providing regular updates to shareholders.