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Are hemp stores really prohibited from registering with the Registre du Commerce?

Published

7 years ago

February 28, 2019

The Comité de Coordination du Registre du Commerce et des Sociétés (CCRCS), a body of the Ministry of Justice whose mission is to interpret the Commercial Code and harmonize its application, has been asked by the Conseil National des Greffiers des Tribunaux de Commerce (CNGTC) to address the issue of cannabis-derived products. It issued a highly controversial opinion on registration with the Registre du Commerce et des Sociétés (RCS) for the purpose of marketing «products derived from cannabis» and therefore hemp.

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A dubious interpretation

The starting point was the question put to the Committee by the CNGTC: «Can the business of marketing cannabis-derived products be registered with the Registre du Commerce et des Sociétés? From this, the Committee concluded that yes, such registration is possible, but subject to having obtained the necessary authorizations, i.e. authorization from the Agence Nationale de la Santé et des Médicaments (French National Agency for Health and Medicines) or a tobacconist's contract with the State. As Yann Bisiou, lecturer in private law and criminal sciences and a specialist in drug law, points out, in a publication on Lexbase, This interpretation is more than inconsistent.

The Committee thus seems to be basing itself on articles R5132-74 and R5132-75 of the French Public Health Code, but these texts only concern drugs classified as poisonous substances and narcotics. CBD is not classified as a narcotic by either France or the United States. nor by the WHO. These texts therefore do not apply to CBD products derived from hemp. What's more, the ANSM can only issue marketing authorizations for medicinal products.. However, CBD products or hemp derivatives do not claim to be therapeutic products. In any case, this claim is considered illegal.

The Committee's opinion goes on to state that «if the activity consists of marketing products that can be consumed and are composed, even partially, of tobacco, it is assimilated to the sale of tobacco products, which is itself subject to the conclusion of a management contract between the retailer and the State». This confusion between cannabis-derived products and tobacco seems totally unjustified. CBD products do not contain tobacco. Some CBD-free e-liquids may contain nicotine, but products of this type are already sold outside tobacconists' shops.

The opinion also claims that activities related to the trade of cannabis-derived products are already regulated on the basis of the regulations in force for tobacco products and medicines. Would cannabis entrepreneurs therefore have to improvise themselves as tobacconists or pharmacologists to trade in hemp derivatives and CBD products?

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Yet another attempt to discourage entrepreneurs?

This is not the first time that a ministerial body has issued a restrictive interpretation of the law to curb the trade in cannabis-derived products. MILDECA and DACG have already attempted to assert their interpretation of the law, according to which only the stems and seeds (and not the flower) can be used, and the finished product must contain no trace of THC. These interpretations, hardly justified by international conventions, European law or even domestic law, are currently preventing the development of a sector that is already in the starting-blocks.

This time, with the opinion of the CCRCS, the attempt at dissuasion is even more crude. According to Yann Bisiou, the documents requested are unnecessary: «the first document is not necessary, while the second simply does not exist». This notice will nevertheless be sent to all registrars in France, and is already public. on the Ministry of Justice website. As a result, these operating conditions can be verified by the registrars, who can then remove a company from the commercial register or refuse to register it.

On the other hand, this interpretation can be opposed in court by another valid interpretation of the law, and there are probably more legitimate ones. Indeed, the same Public Health Code on which the committee's opinion is based provides for an exemption for non-psychoactive cannabis or hemp in the context of its European business. European regulations specify that cannabis and its derivatives are legal as long as they are derived from varieties registered in the European catalog. This is the position the hemp and well-being industry association is committed to achieving recognition.

According to the European principle of free movement of goods, France should not be able to block trade in a product recognized as legal at European level. The first relaxation of a CBD store had succeeded in asserting this position and another case to the European Court of Justice must rule on the matter. In the meantime, the Committee's opinion can be used in legal proceedings against merchants and contractors, until such time as its invalidity can be demonstrated.

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Hemp stores on the front line

As Yann Bisiou explains, the CBD stores targeted by the Committee will not be the hardest hit because, in the context of the crackdown they have suffered, they have opened under very vague names that make no mention of CBD products. On the other hand, the concept of hemp derivative stores is entirely focused on the plant's virtues, and it's difficult to ignore the word hemp in terms of communication.

«The CBD stores targeted by the Committee will not be the ones most affected. It's the hundreds of companies in the traditional hemp industry that will be the most visible and the most endangered. Legally inconsequential, this opinion is also clumsy and misses the target it was intended to hit,» develops Yann Bisiou.

To get around this problem and avoid being refused entry in the commercial register, entrepreneurs are well advised not to mention certain key words (hemp, cannabis, tobacco) in their articles of association. NORML France advises opting for broader denominations such as «wellness products». For companies already established, there is a risk, and the association advises prior modification of the articles of association. NORML France has announced that it intends to approach the Ministry of Justice and take legal action to challenge the document.