Medical Cannabis & Cannabinoid Regulation

GLOBAL PRACTICE GUIDES

Definitive global law guides offering comparative analysis from top-ranked lawyers Medical Cannabis & Cannabinoid Regulation

Switzerland Daniel Haymann Froriep

practiceguides.chambers.com 2021 SWITZERLAND

Law and Practice Contributed by: Daniel Haymann Froriep see p.18

CONTENTS 1. Legal/Regulatory Framework p.3 1.1 Source of Regulations p.3 1.2 Regulatory Authorities p.10 1.3 Self-Regulation p.11 1.4 Key Challenges p.12 1.5 Level of Regulation p.14 1.6 Legal Risks p.14 1.7 Enforcement p.15

2. Cross-Jurisdictional Issues p.15 2.1 Cross-Jurisdictional Standards p.15

3. Future Developments p.15 3.1 Legal Elements Affecting Access to Medical Cannabis p.15 3.2 Use of Non-controlled Cannabinoids in Food p.15 3.3 Decriminalisation or Recreational Regulation p.17

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1. LEGAL/REGULATORY governed by three ordinances on the control of FRAMEWORK narcotics (BetmKV), the addiction to narcotics (BetmSV) and the register of narcotics, psy- 1.1 Source of Regulations chotropic substances, precursors and auxiliary In Switzerland, products containing hemp, or chemicals (BetmVV-EDI). Cannabis Sativa L. (cannabis), are regulated by a set of laws and regulations that are intertwined, The BetmKV governs the activities of the Swiss complex and create a level of legal uncertain- Agency for Therapeutic Products (Swissmedic) ty that lawmakers have realised needs to be in the area of granting authorisations for the addressed. The main tenets surrounding can- legally permitted handling of controlled sub- nabis are regulated in the narcotics, therapeutic stances and the associated controls, and is of products, health insurance, foodstuff, chemical, importance for the industrial use of these sub- cosmetic, utility articles, tobacco substitutes as stances. The BetmSV regulates the measures well as plant varieties and seeds laws and regu- for prevention, therapy and harm reduction as lations, among others. well as the exemptions for the restricted medical use of cannabis-containing medical products To facilitate matters, this guide will provide an and the corresponding controls. Lastly, the Bet- overview of only the most important aspects of mVV-EDI lists all controlled narcotics and psy- cannabis laws and regulations, and draw a dis- chotropic substances and determines to which tinction between cannabis products: control measures they are subjected.

• containing a tetrahydrocannabinol (THC) Cannabis is classified as a prohibited narcotic if content of above 1%, which are considered its THC content exceeds 1%. An amendment to prohibited narcotics under the Federal Act the NarcA in force since 1 July 2011 provides for on Narcotics and Psychotropic Substances a restricted decriminalisation of the preparation (Narcotics Act, NarcA); and of a negligible quantity of cannabis for one’s own • containing a THC content below 1%, which consumption (10 g). Cannabis products with a have been popularised and aggregated THC content lower than 1%, on the other hand, (in somewhat untechnical jargon) as “CBD can be legally produced and marketed. This products” – which means products contain- holds true for all cannabis products except for ing cannabidiol – which are not subject to the cannabis resin. Cannabis resin is separately list- NarcA and are more freely marketable. ed in the BetmVV-EDI and is considered a controlled narcotic, independent of its THC content. THC and CBD have garnered notoriety as the This classification of cannabis resin as - anar most prominent cannabinoids over the last cotic drug, which was confirmed by the Swiss years, but research has shown that over 140 Federal Tribunal in 2019, is considered rather cannabinoids (naturally occurring compounds unfortunate by the local cannabis industry as it found in the cannabis plant) can be identified. limits the commercial exploitation of the most cannabinoid-dense part of the cannabis plant, Cannabis Products with a THC Content drives a wedge of unequal treatment between Above 1% cannabis extracts, which are legal if their total Narcotics Act, NarcA THC content remains below 1%, and cannabis The use of narcotics is primarily regulated by resin, and creates a whole range of other legal the NarcA. The implementation of the NarcA is issues (eg, in cosmetics regulation).

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Pursuant to the NarcA, the Federal Office of • the administration of the prohibited narcotic Public Health (FOPH) may issue exceptional enables the patient to live more indepen- licences for cultivating, importing, producing dently (eg, in case inpatient treatment can be and placing on the market narcotics contain- avoided). ing an effective concentration of cannabinoids, where this is not prohibited by an international Applying for a special permit at the FOPH is agreement and these narcotics are needed for therefore quite cumbersome, and a revision to scientific research, the development of medical the NarcA, which was adopted on 19 March products or for restricted medical use. The pre- 2021, will provide long-sought relief. See the scription for medical purposes of unauthorised adjacent Trends & Developments article for cannabis-based medical products which contain further details. a THC level of above 1% is permitted under certain circumstances. Such an exemption permit Therapeutic Products Law from the FOPH is required: Legal basis The regulations on the use of medical products • to develop medical products with prohibited and medical devices are mainly set forth in the narcotics; Federal Act on Medicinal Products and Medical • to use prohibited narcotics for limited medical Devices (Therapeutic Products Act, TPA), the purposes; and Ordinance on Pharmaceutical Products (VAM), • to use an authorised medical product with the Ordinance on Advertising of Pharmaceuti- prohibited narcotics for any purpose other cal Products (AWV) and the Products Licensing than the approved indication. Ordinance (MPLO). These laws and regulations apply to therapeutic products according to the An exceptional licence for restricted medical use TPA, which include medical cannabis products. is issued to the attending physician. The physician then goes on to prescribe the medical can- Authorisation nabis product (in the form of oils and tinctures Ready-to-use medical products may be placed for ingestion). Based on this prescription, the on the market only if authorised by Swissmedic. corresponding medical product may be dis- The application for obtaining a market authori- pensed to the patient within the framework of sation for medical cannabis products must the Therapeutic Products Law. The granting of include, for example, detailed documentation a licence for the restricted medical use of pro- on the results of physical, chemical, galenic and hibited narcotics also requires a prior written biological or microbiological tests, as well as declaration by the patient stating that he or she the results of pharmacological and toxicologi- consents to the use. An exceptional licence for cal tests and clinical trials. The applicant must restricted medical use may only be granted if the prove that the medical products are of high qual- following conditions are cumulatively fulfilled: ity, safe and effective and that the medical product in question does not pose a risk to the safety • the patient suffers from an incurable disease; of consumers. • the suffering can be alleviated by taking the prohibited narcotic; Only one ready-to-use medical product with • the existing treatment options have been a THC content above 1%, Sativex®, is fully exhausted or there are no alternative treat- approved in Switzerland. Sativex can be pre- ment options; and scribed without special permit only for spastic

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convulsions in multiple sclerosis patients – in or a hospital pharmacy for a given person or other words, its application is very limited in group of persons. scope. The conditions for the use of medicinal products The manufacture of medical products and phar- that are exempt from authorisation are restric- maceutical excipients (eg, colourings, preserv- tive. Such use is mainly considered in order to atives) whose manufacture requires a licence ensure the supply if no authorised drug is avail- must conform to the recognised rules of good able for this purpose. Medical cannabis prod- manufacturing practice (GMP). The Medicinal ucts produced as a formula magistralis, which Products Licensing Ordinance (MPLO) refers are produced by a pharmacy based on a medi- to the GMP guidelines of the European Union cal prescription, require an exceptional authori- (Annex 1). Thus, in Switzerland the GMP guide- sation from the FOPH under the NarcA. An lines of the European Union are applicable. exceptional authorisation is also required for an approved drug (ie, Sativex®) that is dispensed The GMP guidelines provide the minimum for an indication other than the one for which it requirements that a manufacturer of medical has been approved. products must meet to assure that their products are consistently of sufficiently high quality The reason for this exemption from authorisation for their intended use. This includes risk man- is, according to the legislator, that the training of agement, documentation, continuing improve- the physician and the cantonal supervision of the ment processes as well as internal and external professional licences guarantee that the physi- audit requirements. Each manufacturer must cian issues the prescriptions correctly and the determine and document in writing how it com- pharmacist prepares the prescriptions according plies with and implements the GMP guidelines. to the law. An audit must verify whether all the required boxes of the GMP standard were ticked and thus The provisions of the TPA apply to narcot- that the products meet the safety and quality ics used as therapeutic products even if they standards. are placed on the market with an exceptional authorisation under the NarcA. The provisions Swiss-domiciled companies with a valid estab- of the NarcA are applicable to these narcotics lishment licence for the manufacture of medical insofar as the TPA does not provide any regu- products may apply to Swissmedic to obtain lation or provides a less far-reaching regulation a GMP certificate through its eGov GMP-GDP than the NarcA. In other words, narcotics used online portal. as medicinal products that are exempt from an exceptional authorisation by Swissmedic also Exemption from authorisation must comply with the minimum standards of The Therapeutic Products Act also provides for the TPA. the market placement of medicinal products that are exempt from authorisation. These include Health Insurance Law medical cannabis products manufactured as an The reimbursement of costs for medicinal prod- extemporaneous preparation (“magistral formu- ucts by the compulsory health insurance (OKP) la”) – ie, medicinal products prepared according generally requires that the medicinal product is to a doctor’s prescription by a public pharmacy included in the so-called list of specialties (SL) of the FOPH. To be included in that list, the medici-

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nal product requires both a licence from Swiss- Cannabis Products with a THC Content medic and proof of its efficacy, usefulness and Below 1% cost-effectiveness. Cannabis products containing a THC content of below 1% are not captured by the scope of In Switzerland, it is considered that there is lim- the NarcA. Of all the (known) cannabinoids in ited evidence for the efficacy of cannabis inter the cannabis plant, CBD stands out as the most alia in the treatment of chronic pain, nausea in prominently marketed cannabinoid in the can- chemotherapy and spasms in multiple sclero- nabis market. On 21 April 2021, Swissmedic, the sis. Accordingly, no medicinal product, not even FOPH, the Federal Food Safety and Veterinary Sativex®, is on the FOPH’s list of specialties for Office (FSVO) and the Federal Office -for Agri reimbursement by the compulsory health insur- culture (FOAG) jointly released an updated ver- ance. sion of an “Overview and implementation guide” regarding “Products containing cannabidiol Only in cases of hardship, and upon request for (CBD)” (the “Implementation Guide”), the main a cost approval by a physician, is reimbursement elements of which are set out below. by the OKP of a medicinal product not listed in the SL possible. It is considered a case of hard- CBD products can only be marketed legally if ship if the use of the product is expected to pro- they comply with the Swiss legislation that is vide a major therapeutic benefit against a dis- applicable to their respective classification. The ease that may be fatal for the insured person or range of CBD-containing products is extensive result in severe and chronic health impairments, and includes, among others, raw materials such and no other effective and approved treatment as cannabis buds or flowers with a high CBD- method is available due to a lack of therapeutic content, extracts in the form of oils or pastes, alternatives. ready-to-use products such as capsules, food supplements, liquids for e-cigarettes, tobacco It remains to be seen whether an amendment substitutes, scented oils, chewing gums and to the NarcA, which was adopted by the Swiss ointments, some of which are offered as -per Parliament on 19 March 2021, will provide relief sonal care products. in terms of reimbursement by the OKP. Unfortu- nately, the adopted amendment does not envis- In order to determine the applicable legislation, age an adjustment to the reimbursement require- the product must be assigned to the corre- ments. However, a so-called Health Technology sponding product category based on the rele- Assessment (HTA) report is being prepared on vant factors such as composition, intended use, behalf of the FOPH to clarify the scientific evi- dosage, etc. dence regarding the efficacy and cost-effectiveness of medical cannabis products and to differ- As an initial step, it must be determined whether entiate between the various patient groups. The the CBD product is a raw material or ready-to- HTA will form the basis for the reimbursement use product. CBD products considered as raw decision on medical cannabis products that do materials are governed by the Chemicals Act not require a marketing authorisation. It may be and the Chemicals Ordinance. If no intended published later in 2021. use can be determined for a cannabis-based raw material, it should be placed on the market in accordance with the legislation governing chemicals. Lastly, the Federal Act on Product

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Safety (PrSG) acts as a fallback catch-all leg- Epidiolex®, a ready-to-use CBD monoprepa- islation for products for which there is no other ration prescribed for the adjuvant treatment of specific applicable law. two rare forms of epilepsy, was approved by the United States Federal Drug Administration CBD offered as chemicals (FDA) on 28 June 2018. This was the first time a CBD-containing products may be marketed ready-to-use CBD medicinal product has been legally as scented oils. Manufacturers must clas- approved anywhere in the world. Recently, on sify, package and label the product in accord- 10 February 2021, the same preparation was ance with the provisions of the Chemicals approved in Switzerland under the name of Ordinance (ChemO) after having assessed that Epidyolex®. substances or preparations they intend to place in the market do not endanger human life, health Pharmacies can also prepare and dispense CBD or the environment. containing medicinal products as extemporaneous preparations – ie, as a magistral formula, However, if the presentation of the products indi- based on a prescription of a specialised physi- cates, or suggests, other uses that are covered cian – in Lennox-Gastaut syndrome and Dravet by other legal provisions, their marketability must syndrome or other treatment-resistant forms of be assessed according to these provisions. This epilepsy. The medicinal product must be pre- may be the case, for example, if a “scented oil” pared with CBD that has been produced in com- is sold in a cartridge for e-cigarettes, in which pliance with GMP to a quality standard that as case foodstuffs/utility articles legislation applies a minimum satisfies the requirements of mono- for the assessment of marketability. The same graph C-052 Cannabidiol of the current Ger- would apply if, for example, cannabis oils con- man Drug Codex DAC/NRF and the preparation taining full spectrum hemp extracts would be itself at the pharmacy level must comply with the labelled as having a specific nutritional value, or GMP requirements of the current Pharmacopoea is sold under the banner of a therapeutic prod- Helvetica (Ph. Helv.). uct. CBD sold as cosmetics The authorities are applying a holistic approach According to the Ordinance on foodstuffs and in their assessment of product classification, consumer products (LGV), cosmetic products which also includes a detailed analysis of how are broadly defined as “substances or prepa- CBD-containing products are marketed through rations intended to come into external contact company websites and other sales channels. with certain parts of the human body, such as the skin, the hair system, the nails, the lips or CBD sold as medicinal products external intimate regions, or with the teeth and Ready-to-use CBD-containing products with a the mucous membranes of the oral cavity, for the medical-intended use are regarded as medicinal sole or predominant purpose of cleaning them, products under the TPA, which require authori- perfuming them, changing their appearance, sation by Swissmedic to be placed on the mar- protecting them, keeping them in good condi- ket. Companies that manufacture, distribute or tion or influencing body odour” (the author’s dispense medicinal products containing CBD translation). always require a corresponding authorisation from Swissmedic or the respective canton. Cosmetic products must be safe, and the safety of the individual ingredients must be document-

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ed in a safety report. References of any kind to be used to introduce CBD into cosmetics. Seeds disease-curing, disease-soothing or disease- and leaves not accompanied by the flowering or preventing effects of cosmetics (eg, medicinal fruiting tops, however, can be used to produce or therapeutic properties) are prohibited. cosmetics.

CBD has gained widespread popularity as an It should be noted that, on 19 November 2020, ingredient in cosmetic products in recent years. the European Court of Justice (ECJ) concluded The use of synthetic CBD is not specifically in its judgment C-663-/18 (the Kanavape case) regulated and can be used in the formulation of that CBD extracted from the fruiting or flowering cosmetic products if the requirements set forth tops of the cannabis plant, and not only from in the LGV are met. the seeds and leaves, “is not a drug within the meaning of the Single Convention”. The ECJ Regarding the use of naturally derived CBD in clarified that “since CBD does not contain a cosmetics, (ie, CBD derived from the cannabis psychoactive ingredient in the current state of plant), the Implementation Guide provides as scientific knowledge […] it would be contrary follows: to the purpose and general spirit of the Single Convention to include it under the definition of Article 54 (1) LGV refers to the list of substanc- “drugs” within the meaning of that convention es prohibited in cosmetic products in Annex II as a cannabis extract”. of Regulation (EC) No 1223/2009 on Cosmetic Products, Entry No 306, which reads: “Narcot- Cosmetic ingredients have an international des- ics, natural and synthetic: All substances listed ignation, a so-called INCI term (International in Tables I and II of the single Convention on Nomenclature for Cosmetic Ingredients). Each narcotic drugs signed in New York on 30 March ingredient is also listed in the Central European 1961”. Schedule I of the signed Single Conven- Register of Cosmetic Ingredients (CosIng) either tion on Narcotic Drugs of 1961 (the Single Con- with or without restriction. Following the publica- vention) lists cannabis, cannabis resin, cannabis tion of the decision in the Kanavape case and extracts and cannabis tinctures. According to upon request of the European Industrial Hemp the definition in Article 1 of the Single Conven- Association (EIHA) to lift the existing restriction tion, “cannabis” means “the flowering or fruiting on the use of cannabis extracts in cosmetic tops of the cannabis plant (excluding the seeds products, the European Commission has lifted and leaves when not accompanied by the tops) the restriction on CBD and has revised the entry from which the resin has not been extracted, as follows: “Cannabidiol – derived from extract by whatever name they may be designated”. or tincture or resin of cannabis”. It recently did “Cannabis resin” is further defined in the Sin- the same for cannabigerol, or CBG, which is gle Convention as “the separated resin, whether another known minor constituent of cannabis. crude or purified, obtained from the cannabis While the CosIng (cosmetic ingredients) data- plant”. The Implementation Guide goes on to base is not legally binding, the listing of ingredi- conclude that, therefore, the use of “cannabis” ents is regarded by authorities and courts in the or non-deresinated flowering or fruiting tops of EU member states as a strong indication of their the cannabis plant and products made from legality in cosmetic products. them (eg, hemp extracts, CBD) are prohibited in cosmetic products. Cannabis resin obtained While cannabis resin is clearly defined as a nar- from any part of the cannabis plant can also not cotic under Swiss law, cannabis extracts are

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exempt from the NarcA if their THC content tion and are subject to the Tobacco Ordinance does not exceed 1%. In view of a harmonisa- (TabV), independent of the Swiss Federal Tribu- tion with recent practice in the European Union nal’s decision that hemp containing CBD is not (EU) as well with the ECJ’s conclusion that “it considered a tobacco substitute according to would be contrary to the purpose and general the Tobacco Tax Act (TStG). spirit of the Single Convention to include CBD under the definition of ‘drugs’ within the mean- It is therefore lawful to sell tobacco substitutes ing of that convention as a cannabis extract”, it containing CBD or other cannabinoids as dried would be desirable – and, in the author’s view, flower, buds, or as cigarettes/cigars, for exam- in line with current legislation – to reconsider the ple. However, existing food legislation must be described practice in the Implementation Guide observed, which includes the obligation to self- to the effect that CBD, as well as all other can- regulate and to notify the FOPH before placing nabinoids, derived from cannabis extracts from products on the market. the flowering and fruiting tops should also be allowed in cosmetic products. According to the TabV, tobacco substitutes must satisfy the prerequisites applicable to the CBD sold as utility articles smoked tobacco products they replace (eg, CBD-containing liquids for e-cigarettes are clas- herbal cigarette packaging must contain pho- sified as utility articles that come into contact tographic warnings). The substitutes must not with mucous membranes under the Federal Act pose a direct or unexpected threat to health. on Foodstuffs and Utility Articles (Foodstuffs Act, FSA) as well as the LGV, may be sold unless CBD sold as foodstuffs they release substances in quantities that pose Please see 3.2 Use of Non-controlled Cannab- a risk to health. It is further not permitted to add inoids in Food, which includes some comments CBD to liquids for e-cigarettes in pharmacologi- on the consumption of THC. cally effective doses. Reform of Switzerland’s hemp seed Refill containers for e-cigarettes containing CBD legislation are subjected to the provisions of the chemicals As of 1 January 2021, all provisions of the seed legislation. Distributors must carry out self-reg- legislation relating to the production and sale of ulation and implement labelling and reporting hemp seed and seedlings, which includes can- obligations (product registration for chemicals). nabis with a THC content of below 1%, were repealed. Previously, only approved varieties of On a side note, it may be added that parapher- hemp grown for oil and fibre that were listed in nalia and smoking accessories such as bongs, the Federal Office of Agriculture’s (FOAG) varie- vaporisers, grinders (without CBD), etc, may be ties ordinance or the European Union’s Com- sold without restriction if they comply with the mon Catalogue of Varieties, which is still in force FSA, the LGV and the PrSG. in the EU, could be placed on the market for commercial use in agriculture. This is a signifi- CBD sold as tobacco substitutes cant competitive advantage for Switzerland as Hemp with a total THC content of less than 1% an innovation hub for the development of hemp does not fall under the NarcA and can be sold seeds and varieties as compared to the EU. as a tobacco substitute for smoking. Tobacco substitutes are a part of Swiss food legisla-

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For the agricultural production of hemp, the investigative competence of the Confederation provisions of the plant health legislation and the in this area. direct payments legislation must be respected. For the use of hemp as animal feed, the provi- The Confederation exercises oversight over the sions of the Animal Feed Law must be observed. implementation of the NarcA. It conducts controls at the border (import, transit and export) 1.2 Regulatory Authorities and in customs warehouses and bonded ware- Switzerland is a federal state, which means that houses. The Confederation and the cantons powers are divided between the Confederation, work together to fulfil their tasks under the NarcA the cantons and the communes, according to and co-ordinate their work. They may call on the the principle of subsidiarity. The Confedera- assistance of other organisations concerned. tion, in principle, only undertakes tasks that the cantons are unable to perform, or which are Non-compliance with the NarcA is a crimi- expressly allocated to the Confederation by the nal offence. Under the NarcA any person who Federal Constitution. without authorisation, among others, cultivates, produces, stores, sends, transports, imports, As discussed in 1.1 Source of Regulations, exports or carries in transit narcotic substances, regulations affecting the cannabis market span possesses, keeps, buys, acquires or otherwise a very wide spectrum of the law. It would go obtains narcotic substances, etc, is liable to a beyond the scope of this guide to describe the custodial sentence not exceeding three years or authorities responsible for enforcement on both to a monetary penalty. a federal and cantonal level for each area of law. However, a short overview will be provided of the As mentioned in 1.1 Source of Regulations, enforcement authorities in narcotics, therapeu- medicinal cannabis products with a THC content tic products, foodstuffs and utility articles (which of 1% and above may be prescribed with a spe- includes cosmetics) and chemicals law. cial authorisation by the FOPH, which develops Switzerland’s health policy and works to ensure Enforcement of the NarcA that the country has an efficient and affordable As a result of Switzerland’s federal political sys- healthcare system in the long term. tem, the cantonal law enforcement agencies (ie, the public prosecutor’s office) are principally Enforcement of the TPA charged with enforcing the NarcA, with the help Swissmedic is responsible for the duties of the police. The clear statement of the law assigned to it by the TPA. It is involved in the that the enforcement of the NarcA lies within entire life cycle of a medicinal product through the competence of the cantonal law enforce- its duties in the areas of authorisation, approval ment agencies was relativised by the fact that and monitoring of medicinal products. Swiss- it had always been assumed that the narcotics medic is run by the Confederation with the co- sector was subject to special supervision by the operation of the cantons, as an institution under Confederation. Consequently, the Office of the public law with its own legal personality. Attorney General of Switzerland could, under certain circumstances, order investigations itself It is important to note that Swissmedic’s areas if the criminal acts were committed in whole or in of responsibility are closely related to those of part abroad or in several cantons. This compe- other authorities or implementing bodies – for tence continues to exist. Thus, there is a parallel example, when it comes to the delimitation

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between medicinal products and cosmetics or Enforcement of the FSA between medicinal products and foods, where According to the LGV, business operators who the FOPH and the Federal Food Safety and Vet- manufacture, process, treat, distribute, import or erinary Office (FSVO) are involved, all areas rel- export food, food additives or utility articles must evant for the emerging cannabis market. exercise self-control and designate a responsible person who appropriately documents com- Furthermore, Swissmedic has, among oth- pliance with the requirements of the FSA/LGV. ers, the competence to authorise ready-to- This includes the obligation to secure good use medicinal cannabis products and to grant manufacturing procedures, the implementation a licence for imports of therapeutic products of quality management systems as well as the (including medicinal cannabis) if the applicant obligation to withdraw or recall unsafe food, if complies with the requirements of the Medicinal applicable. Products Licensing Ordinance. The Swiss Association of Cantonal Chemists In simplified terms and on a cantonal level, the (ACCS) published a useful website listing local Cantonal Office for the Control of Therapeu- law enforcement authorities for food and utility tic Products (Kantonale Heilmittelbehörde) in articles in Switzerland; see www.kantonsche- Zurich, for example, is divided in three operative miker.ch. In Zurich, for example, the Cantonal units: the inspectorate, the laboratory and the Laboratory is responsible for the implementa- administration. The Kantonale Heilmittelbehörde tion of food safety regulation, including the con- in Zurich is responsible for the control of the trol of reporting and permitting obligations, as production, wholesale trade and dispensing of well as the implementation of special protective therapeutic products, the market surveillance of regulations of non-food or utility articles such therapeutic products (which includes marketa- as cosmetics. bility reviews and conformity tests in accordance with recognised pharmacopeias), the granting of Authorities charged with the implementation of cantonal licences for the dispensing of medicinal the FSA and its many ordinances have a wide products (pharmacies, drugstores, etc), the issu- range of administrative measures they can ance of professional and narcotic licences and impose on non-compliant market participants. other tasks. The cantonal pharmacy is mandated to secure a high quality and economical sup- 1.3 Self-Regulation ply of therapeutic products to hospitals, a wide While there are numerous organisations that act range of institutes and the general population. as self-regulatory bodies to the cannabis indus- In the canton of Zurich, the cantonal pharmacy try in Switzerland, three groups stand out in par- is also responsible for the production of a wide ticular, as detailed below. range of pharmaceutical products. Other cantons have similar structures. The Interest Group Hemp (IG Hanf) The association Interest Group Hemp (IG Hanf) In terms of enforcement, non-compliance with represents the Swiss hemp industry and its the TPA may lead to a series of administrative members in politics, before authorities and in (including disciplinary) and penal actions on both public. It is by far the largest interest group of the federal and cantonal level. market participants in the cannabis industry in the country. The association’s goal is to promote exchange and co-operation among its members

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and thus strengthen the hemp industry in Swit- uct, its legal regulation as well as its clinical zerland. Its mission is to establish cannabis in implementation in close co-operation with the society in a sustainable manner and to create FOPH. As an umbrella organisation for profes- a regulated cannabis market in order to ensure sionals from medicine, pharmacy, pharmacolo- that Switzerland plays a leading role in the global gy, research and industry, its declared goal is to cannabis industry. foster the scientific, rational and destigmatised use of medicinal cannabis as well as the sim- To secure quality control among its members, plified, unbureaucratic access to therapies with the IG Hanf established the quality label “Swiss medicinal cannabis. Certified Cannabis”. The label guarantees products and consumer safety and determines qual- Its task is to serve as the Swiss interdisciplinary ity standards (in accordance with ISO 9001). knowledge and information platform for the Specifically, the goals of the label as stipulated medical use of cannabis and cannabinoids and in the guidelines of Swiss Certified Cannabis are: as a networking platform for a wide range of pro- fessionals, care-givers, interest groups, etc. The • to guarantee absolute traceability throughout organisation further promotes basic and clini- the production chain; cal research and collects valuable data, based • to ensure highest security for consumers and on which it elaborates medical recommenda- customers; tions for the most relevant treatment principles. • to build trust with consumers, customers and SGCM-SSCM is the Swiss ambassador of IACM authorities; (International Association for Cannabinoid Medi- • to protect against economic damage or loss cines). of reputation. MEDCAN The Swiss Certified Cannabis label can only be MEDCAN advocates for the interests of patients used by certified companies. The application in Switzerland who take cannabis as a medicine process includes: and provides information on the use and effects of the medicinal plant. The association pursues • training by a qualified auditor; the goal of ensuring that patients in Switzerland • a certification audit on site by an independent have legal access to cannabis without a great and qualified auditor; deal of bureaucracy and can use it medically in • a decision on the granting of the certificate tested quality and at reasonable prices. Moreo- based on the audit report by the board of ver, it demands from the FOPH to further edu- directors of IG Hanf. cate physicians regarding possible indications and dosages and to minimise the bureaucratic The guidelines of Swiss Certified Cannabis set effort to obtain medicinal cannabis. MEDCAN standards on quality policy, production, pack- advocates on a political and on a public level for aging, storage, safety, control, work-safety and people who use cannabis for medical purposes. hygiene, labour, environment and infrastructure. 1.4 Key Challenges Swiss Society of Cannabis Medicine The cannabis market faces tremendous chal- The goal of the Swiss Society of Cannabis in lenges such as inconsistent cannabis and can- Medicine (SGCM-SSCM) is to promote the nabinoids terminology, significant differences in acceptance of cannabis as a therapeutic prod-

12 SWITZERLAND Law and Practice Contributed by: Daniel Haymann, Froriep

enforcement between cantons as well as a con- higher instance courts, or ideally by lawmak- stantly changing regulatory environment. ers. CBD-pollinate is often exported into the EU and contains in most cases a THC content of The most obvious challenge market participants less than 0.2%. This is just one example of how face is that cannabis is considered a narcotic confusing it can potentially be to bring cannabis drug if the THC content exceeds 1%. Conse- products to market. quently, all efforts by market participants to legally bring products to market are biased by Furthermore, some of the most challenging the default assumption that cannabis is an illicit aspects of the cannabis market come to the sur- drug. This negative bias leads to heightened face where various areas of the law overlap. The scrutiny by enforcement agencies and is not par- development of a new product can be very chal- ticularly conducive for an emerging new industry. lenging when it is unclear, for example, whether it is governed by therapeutics or cosmetics law. A practical example of a widespread confusion A chewing gum containing CBD could be many in the market is the classification of “CBD-pol- things – for example, a therapeutic product, a linate”. As mentioned in 1.1 Source of Regu- cosmetic product or a foodstuff. Defining the lations, cannabis resin is defined in the Single product category and abiding by all regulatory Convention as “the separated resin, whether requirements while considering pertinent case crude or purified, obtained from the cannabis law can only be managed with a detailed techni- plant”. Cannabis resin is further separately list- cal and legal assessment. ed in the BetmVV-EDI and is considered a controlled narcotic independent of its THC content. Reference can be made to two very useful In contrast to cannabis resin, however, pollinate guides that can help, to some extent, navigate (hemp flower pollinate) consists of fine CBD these complexities: hemp flower components that fall off when the biomass is shaken into drums (known as pol- • Demarcation criteria therapeutic products – linators). The production of hemp flower polli- foodstuffs with regard to products to be taken nate is based exclusively on a process where the orally (published jointly by Swissmedic and flower components of the cannabis plant, which the FSVO); and are freely marketable, are extremely refined and • Criteria for the demarcation of cosmetic prod- extracted, resulting in a powder called hemp ucts from therapeutic products and biocidal flower pollinate. At no point in this process is products (jointly issued by Swissmedic, the the resin content explicitly increased. The resin FOPH and the FSVO). content (consisting of trichomes) of these products is the same as in CBD flowers. The resin is Another main challenge in the CBD market is thus not secreted from the flower but is still in the the classification of cannabis extracts or- tinc very small flower components. Yet, many mar- tures (CBD oils). They can be qualified as raw ket participants had significant quantities of their materials or as ready-to-use products. While in pollinate production confiscated and destroyed, practice, most consumers are ingesting CBD which has caused widespread legal insecurity oils, such oils cannot be marketed as foodstuff and economic damage. or nutritional supplements without authorisation of its components as novel food by the FSVO The classification of pollinate as cannabis res- or the European Commission (EC). No company in is debatable and remains to be clarified by

13 Law and Practice SWITZERLAND Contributed by: Daniel Haymann, Froriep

in Switzerland, or in the EU, has obtained such control measures. An allocated taxation of can- authorisation to date. nabis products could generate state revenues and secure the financing of already necessary Another key challenge for participants in the prevention and health measures, in particular for medical cannabis market is to place a medici- the protection of youth. nal cannabis product on the market. In view of the revision of the NarcA – which is thoroughly At the same time, cannabis legislation concern- described in the adjacent Trends & Develop- ing specifically THC limits in Switzerland is con- ments article – and the lifting of the traffic ban sidered rather progressive if compared to the for cannabis for medicinal purposes, the market EU and the USA, where the threshold from legal for medicinal cannabis should be better acces- cannabis (or hemp in the USA) to a narcotic drug sible for companies in the future. (which in some states in the USA is legalised) is passed when the THC levels surpass 0.2% or The above examples of key challenges do not 0.3%, respectively. Also, the Ordinance on the touch on the many complexities surrounding maximum levels of contaminants (VHK) allows international trade of medicinal and recreational for significantly higher values of THC intake from cannabis products, and a whole range of other food than the THC values in the EU. Switzerland issues and uncertainties participants in the can- has further repealed all provisions of the seed nabis market must deal with. legislation relating to the production and sale of hemp seed and seedlings and is no longer 1.5 Level of Regulation bound by the European Union’s Common Cata- Cannabis-specific regulations in Switzerland are, logue of Varieties. with few exceptions, limited to narcotics and criminal law. Legal uncertainty is still prevalent In view of the latest developments in legislative in production, trade and consumption of canna- reform of the NarcA regarding medicinal can- bis products of all kinds (cosmetics, foodstuffs, nabis as well as cannabis trials for recreational medicines, recreational use, etc), as is inconsist- purposes, Switzerland is well positioned to fur- ent cantonal enforcement. ther expand its regulatory edge in the emerging European cannabis industry. In other jurisdictions, such as in many US states where medical and recreational cannabis have 1.6 Legal Risks been legalised, the cannabis market is thor- Companies and individuals in the cannabis oughly regulated. Countries such as Canada market must navigate a complex web of inter- and Uruguay are following suit with their own related, constantly changing areas of law. Non- regulatory models. compliance with existing laws and regulations may lead to indictments for criminal offences, Considering these developments, a revision of to administrative penalties and potentially to civil Switzerland’s approach to cannabis regulation damage claims. appears warranted, as was recently proposed in a postulate submitted to the Council of States on Recent enforcement measures by authorities 18 March 2021 by Thomas Minder, a member of were, for example, the shutdown of a retailer’s the Council of States. Specific cannabis-related website for publishing health claims in connec- legislation could bring legal certainty through- tion with CBD products, or the imposition of a out the value chain and secure efficient quality marketing ban for specific CBD oils.

14 SWITZERLAND Law and Practice Contributed by: Daniel Haymann, Froriep

It should be noted that special attention must a laboratory accredited to ISO/IEC 17025 or by be paid to compliance with the NarcA. Cannabis a GMP laboratory. resin is illegal independent of its THC content. Furthermore, cannabis products with a total THC content below 1% must meet the specific 3. FUTURE requirements of the Therapeutic Products Act, DEVELOPMENTS the Foodstuffs Act, the Ordinance on Foodstuffs and Utility Articles, the Chemicals Ordinance and 3.1 Legal Elements Affecting Access to the Tobacco Ordinance, among others, depend- Medical Cannabis ing on the classification of the product placed The main elements affecting medical cannabis on the market. It should be noted in this context in Switzerland are described in the adjacent that not only the NarcA but also other acts such Trends and Developments article, along with as the TPA provide for penal provisions. an overview of impending changes to the current regulatory framework. 1.7 Enforcement Please see 1.4 Key Challenges. 3.2 Use of Non-controlled Cannabinoids in Food The FSA sets forth the rules on the safety and 2. CROSS- transparency of foodstuffs and utility articles. JURISDICTIONAL ISSUES According to the FSA, foodstuffs are all - sub stances or products that are intended or may 2.1 Cross-Jurisdictional Standards reasonably be expected to be consumed by In Switzerland, only cannabis with a THC content human beings in a processed, partly processed below 1% can be exported. The cannabis legis- or unprocessed state. Medical products, nar- lation of the importing country must therefore be cotics and psychotropic substances do not fall complied with. Generally, in the EU, cannabis- under the definition of foodstuffs, and the other products with a THC content of 0.2% and above way around. are considered narcotic drugs and thus cannot be imported, except for medical purposes with Except for a few reservations (eg, “novel foods”), a special permit from local authorities. non-described foods without an authorisation can be placed on the market, provided they A revision of the NarcA which was adopted on meet all the requirements of food law. 19 March 2021 will allow for exports of medical cannabis with a THC content of 1% and Under certain circumstances, which will be above. It is estimated that the revised law will be described below, cannabis products may also enacted in the summer/autumn of 2022. Further be used in foodstuffs. The main tenet in food- details can be found in the adjacent Trends and stuffs law is that foodstuffs must be safe – that Developments article. is, they must neither be harmful to health nor unsuitable for human consumption. Importers of cannabis products with a THC content of 1% and below must be able to provide Novel Foods proof in the form of a batch-specific analytical For foodstuffs that have not been used for certificate for the delivery in question issued by human consumption to any significant extent either in Switzerland or in an EU member state

15 Law and Practice SWITZERLAND Contributed by: Daniel Haymann, Froriep

before 15 May 1997, so-called “novel foods”, an ta 9-tetrahydrocannabinol in foodstuffs (which authorisation by the Federal FSVO or an approv- are generally higher than in the EU). al by the European Commission (EC) is required. This applies to extracts of Cannabis sativa L. It is important to note that all foods which in that contain cannabinoids such as cannabidiol accordance with the Novel Food Regulations (CBD) and food products enriched with extracts (EC) No 258/97 and (EU) 2015/2283 may be of Cannabis sativa L. or with cannabinoids such placed on the market in the EU are fundamen- as CBD (eg, hemp seed oil with added CBD, tally also marketable in Switzerland (except for food supplements with CBD), which are clas- genetically modified foods). To place foodstuff sified as novel foods and therefore require an with CBD on the European market presupposes authorisation. the application for authorisation to the European Commission. If the application is granted, food- Products of Cannabis sativa L., or parts of plants stuff containing CBD can be also placed on the that had a safe and documented significant use Swiss market. Hence, the authorisation from as food in the EU before 15 May 1997, are not the European Commission entails the advan- considered novel foods in Switzerland provided tage that the foodstuff can be placed on both they originate from an approved plant of Can- the European and the Swiss markets. However, nabis sativa L. This is particularly the case for the reverse situation does not apply. Foodstuffs hemp seeds, hemp seed oil, hemp seed flour that are not novel foods in Switzerland or have and defatted hemp seeds. been authorised as such in Switzerland and are classified as a novel food in the EU require an Furthermore, in Switzerland, herbal tea made authorisation from the European Commission for from leaves of the hemp plant Cannabis sativa market placement in the EU. L. is also not considered a novel food. However, the production, import or market placement of Lastly, authorisations are generally not issued herbal teas obtained from the herb of the can- for composite foods. The authorisation require- nabis plant is possible if one furnishes proof ment always relates to a substance, not to a that the herbal tea was already consumed as composite product containing a novel food as a foodstuff to a significant degree prior to 15 an ingredient. May 1997, and is therefore not classified as a novel food. Novel foods that do not require an The EIHA Consortium authorisation are listed in the FDHA Ordinance The European Industrial Hemp Association on Novel Foods. (EIHA) is Europe’s largest association that represents the common interests of hemp farm- Authorisation ers, producers, and traders working with hemp As part of the authorisation procedure for novel fibres, shives, seeds, leaves and cannabinoids. foods, the FSVO examines whether the product is safe and not deceptive. The basic prerequisite In 2019, EIHA created a Novel Food Consortium for approval is that the product is classified as with the aim of submitting a joint Novel Food a foodstuff and is not covered by the legislation application both to the UK Food Safety Authority on medicinal products. In the case of foodstuffs for the British market as well as to the European containing cannabis, the Ordinance on the maxi- Food Safety Authority (EFSA) for the EU mar- mum levels of contaminants (VHK) is relevant. It ket (which, as mentioned above, would include regulates the maximum permissible levels of del- Switzerland), the costs of which will be shared

16 SWITZERLAND Law and Practice Contributed by: Daniel Haymann, Froriep among its members. It is estimated that the 3.3 Decriminalisation or Recreational consortium will invest up to EUR3.5 million for Regulation financing all relevant and unprecedented toxico- The latest developments regarding a potential logical studies on CBD and THC with the help of legalisation of cannabis use for recreational pur- a qualified service provider (ChemSafe). A whole poses can be found in the adjacent Trends and range of cannabinoids containing ingredients Developments article. will be tested to secure all food products using these ingredients will be covered by the joint application. For the purpose of the application, a corporation under German law was founded (EIHA projects GmbH), which collects the special contributions to finance the project and ulti- mately acquires the rights for the distribution of the approved products. EIHA projects GmbH will manage these rights and transfer them to EIHA members, with an established sublicensing system for white label (retail) trading companies.

In its press release dated 23 March 2021, EIHA informed its members that the UK Food Safety Authority has confirmed that both applications for the regular/full-spectrum and the natural iso- late products were considered to be compliant with the administrative requirements. By granting the pre-validation status, the Food Stand- ards Agency recognises and supports the strong will of the hemp sector, and particularly of the EIHA Consortium, to evaluate and determine the safety levels of its novel food products.

Swiss companies aspiring to develop and bring cannabis-based food products to market are advised to evaluate a participation in the EIHA Consortium.

17 Law and Practice SWITZERLAND Contributed by: Daniel Haymann, Froriep

Froriep is a Swiss law firm with a unique inter- qualified attorneys. Clients include cultivators, national presence and perspective. Founded in extractors, product developers, distributors, Zurich in 1966, the firm is one of the leading law retailers, pharmaceutical companies and inves- firms in Switzerland, with offices in Zurich,- Ge tors from Switzerland and abroad. Froriep is neva and Zug, as well as foreign offices in both also the first Swiss law firm to join the European London and Madrid. Froriep is a first mover in Industrial Hemp Association as a member. Fro- new areas of law and was the first law firm to riep is in the process of merging with Meyer- establish a dedicated cannabis practice cover- lustenberger Lachenal, creating a new top-tier ing the regulatory and commercial aspects of commercial law firm in Switzerland with a total the cannabis industry in Switzerland. The can- of 155 lawyers. nabis team consists of three partners and five

AUTHOR

Daniel Haymann heads second career as an attorney, Daniel gained Froriep’s cannabis practice. He over 12 years of experience in the trading, specialises in corporate and mining, energy and related industries based commercial law, with a focus on out of Switzerland, Singapore and Hong Kong, private equity and venture working for multinational corporations as a capital transactions, as well as trader and in managerial positions. He is a on regulatory matters in the cannabis industry. member of the Zurich and Swiss Bar He advises investors, start-ups, and vertically Associations, the International Cannabis Bar integrated companies in the cannabis industry Association and is a co-founder of the network along the value chain. Prior to embarking on a of European Cannabis Lawyers.

Froriep Legal AG

Bellerivestrasse 201 8034 Zurich Switzerland

Tel: +41 44 386 60 00 Fax: +41 44 383 60 50 Email: [email protected] Web: www.froriep.ch

18 SWITZERLAND Trends and Developments

Trends and Developments Contributed by: Daniel Haymann Froriep see p.24

The current regulatory environment surround- patients are consuming “medical” cannabis ille- ing cannabinoid-based products in Switzerland gally (ie, sourced from the black market), which is unfortunately still marked by a high degree exposes them to significant health risks due to of uncertainty, due both to vague legislative the lack of quality control and a growing number requirements and heterogenous, sometimes of cut and contaminated products in circulation. arbitrary, enforcement. However, with the rise This number does not include those who con- of public awareness of the general benefits of sume cannabis for recreational purposes, which the cannabis plant as a result of the cannabid- is, by conservative measures, three times that of iol (CBD) boom of the last few years, as well the FOPH estimate. as by actual and growing anecdotal evidence from local and liberalised recreational markets Cannabis with a tetrahydrocannabinol (THC) such as Canada, Uruguay and certain states in content of 1% and above is considered a pro- the USA, recent legislative developments are hibited narcotic in Switzerland. Under very presenting an opportunity for Switzerland to restrictive circumstances, cannabis with a THC establish itself as a role model for an innovative, content above 1% may be prescribed for medi- pragmatic, safe and comprehensively regulated cal purposes, which requires an exceptional cannabis market. permit from the FOPH. As the currently most- researched cannabinoid, THC is predominantly Medical Cannabis Reform used for chronic pain conditions, spasticity and The status quo spasms, as well as nausea and loss of appe- A study conducted by the Institute for Addiction tite (mostly in the context of chemotherapy). and Health Research on behalf of the Federal Ready-to-use medicinal products may only be Office of Public Health (FOPH), the findings of marketed in Switzerland if they are approved by which were published in February 2020, came Swissmedic, the Swiss Agency for Therapeutic to the conclusion that, for over 96% of the par- Products. Only one ready-to-use medicinal prod- ticipants questioned, the consumption of medi- uct with a THC content above 1%, Sativex®, is cal cannabis has led to an improvement of their fully approved in Switzerland. Sativex can be symptoms. Half of the participants reported an prescribed without special permit for spastic “extreme improvement”. A large part of the par- convulsions in multiple sclerosis patients. For ticipants who already had prescriptions for can- any other indication, an exception permit by the nabinoid-based medicines reported that they FOPH must be obtained (ie, for so-called off- were able to either completely abandon other label use). prescribed drugs, or at least substantially reduce their consumption. See Cannabiskonsum: If an approved preparation is unsuitable, physi- Rekreative oder medizinische Beweggründe? cians can prescribe cannabis as a drug which is exempt from approval by Swissmedic but which Around 3,000 patients are legally prescribed still requires a special permit by the FOPH. The medical cannabis in Switzerland today. Mean- drug is then usually produced by a pharmacy while, the FOPH estimates that over 110,000 on a doctor’s prescription as a so-called extem-

19 Trends and Developments SWITZERLAND Contributed by: Daniel Haymann, Froriep

poraneous preparation (ie, a “formula magistra- ment authorities and the prescribing physi- lis”), which is how most cannabis is prescribed cians. in Switzerland today. • Commercial exports of medical cannabis will be made possible. Applying for a special permit at the FOPH is bur- densome, both for the physician and the patient. Reimbursement by compulsory health Although most applications are granted, the insurance surge of applications in the last few years no Unfortunately, treatment with medical canna- longer justifies the special treatment of medical bis products is not covered by the compulsory cannabis as a prohibited narcotic. This realisa- health insurance (OKP) due to insufficient scien- tion has led to a revision of the current regime tific evidence regarding the efficacy and cost- and the required amendments to the Federal effectiveness of these medicines, especially for Act on Narcotics and Psychotropic Substances extemporaneous preparations. Such medicines (NarcA), which the Swiss Parliament recently are reimbursed by the health insurance providers adopted (on 19 March 2021). It is estimated that in consultation with the physician on an excep- the revised law will be enacted in the summer/ tion basis only. autumn of 2022 at the earliest, together with the details of implementation in a separate Ordi- The major challenge regarding the adopted nance. amendment is that the law does not envisage adjusting the current requirements for reim- The amendment of the NarcA bursement by the OKP. According to MEDCAN, The main features of the legislative amendment Switzerland’s largest medical cannabis patients’ are as follows. association, the costs of treatment with medical cannabis can range from CHF450 to over • The ban on the marketability of medical CHF10,000 per month. cannabis will be lifted. Medical cannabis will be reclassified as a controlled narcotic with A Health Technology Assessment (HTA) report is restricted marketability. Cultivation, process- being prepared on behalf of the FOPH to clarify ing, production and trade will be subject the scientific evidence regarding the efficacy and to the authorisation and control system of cost-effectiveness of medical cannabis products Swissmedic, in the same way as other nar- and to differentiate between the various patient cotics that are used in a medical context (eg, groups. The HTA will form the basis for the reim- morphine). bursement decision on medical cannabis prod- • A special permit by the FOPH will no longer ucts that do not require a marketing authorisa- be required to prescribe medical cannabis. In tion. It may be published later this year. other words, every doctor in Switzerland will be able to prescribe medical cannabis. Commercial opportunities • During the first few years after the coming The amendment to the NarcA presents entre- into force of the amendment, doctors will preneurs with a range of new and exciting com- have to regularly report to the FOPH a whole mercial opportunities, such as: range of data regarding the therapies. The data collection will serve as a basis for the • cultivation of medical cannabis in Switzerland scientific evaluation of the revision as well as (with a special permit by Swissmedic when guidance to the responsible cantonal enforce- the amendment has been enacted);

20 SWITZERLAND Trends and Developments Contributed by: Daniel Haymann, Froriep

• further research into new plant varieties and meeting on 31 March 2021, the Federal Council traits as well as cannabinoid development; adopted the Ordinance on Pilot Trials as per the • innovative research and development of NarcA, which sets a detailed framework for the cannabinoid-based drugs; dispensing of cannabis products for non-medi- • development of new delivery methods, cal use. On 15 May 2021, an amendment to the including vaporisers, dry powder inhalers, NarcA came into effect, allowing pilot testing of slow-release tablets; the controlled dispensing of cannabis for recrea- • establishment of a cross-border medical can- tional purposes. From this point onwards, appli- nabis marketplace with a surge in imports as cations to conduct such trials can be submitted well as exports; to the Federal Office of Public Health. • development of software tools for quality assurance, seed-to-sale traceability solutions The amendment to the NarcA, which will remain as well as documentation standards (GACP, in effect for ten years, provides the legal basis GMP, etc); for the implementation of local and time-limited • education platforms for physicians, patients scientific pilot trials with cannabis. The pilot trials and the general public. will allow consumers to legally purchase a wide range of cannabis-based products. The can- Many more opportunities will arise in this grow- nabis offered must meet high quality standards ing and fast-moving industry. The success of the with strict seed-to-sale transparency and must adopted amendment, the purpose of which is originate from organic cultivation. first and foremost a facilitated access to medical cannabis for patients, will hinge on whether The aim of the studies is to expand knowledge these patients will be able to obtain reliable, on the advantages and disadvantages of con- quality-controlled, safe and affordable medical trolled access to cannabis. They should facilitate cannabis products. the examination and documentation of the con- sequences on health and consumption habits of Tiptoeing in Cannabis Legalisation: users in a scientific framework and provide data Recreational Pilot Trials on the effects on the local illicit drug market as Cannabis is the most frequently consumed ille- well as on the protection of minors and public gal substance in Switzerland. Around one-third safety. of people aged 15 and over have already had experience with the drug. According to the FOPH In more detail, the pilot trials must meet the fol- and Addiction Monitoring Switzerland, approxi- lowing main requirements. mately 7.7% of the population used cannabis at least once during the last 12 months, and 4% • Pilot trials are limited in time (five years, with in the last 30 days. See Cannabis Use – Basic an option to extend by another two years), Facts and Figures, and Addiction Monitoring in location (one or several municipalities), as Switzerland. well as number of participants (maximum 5,000 participants per trial). Repression has never been effective in curb- • Cannabis supplied to the pilot trials has to ing cannabis consumption or in eliminating the originate in Switzerland, be in line with the black market. Legislators in Switzerland have guideline on good agricultural and collection therefore arrived at the conclusion that alterna- practice (GACP) of the European Medicines tive regulatory options must be examined. At its Agency (EMA), and be, in principle, organi-

21 Trends and Developments SWITZERLAND Contributed by: Daniel Haymann, Froriep

cally produced according to the Organic Indoor or outdoor production? Farming Ordinance of 22 September 1997 While the adoption of the pilot trial legislation (only outdoor or greenhouse production that has been positively received by the cannabis is soil-bound – ie, indoor grow is excluded). industry and is recognised as a possible fur- • The total THC content of any dispensed ther step towards a controlled liberalisation, product may not exceed 20%; in products for the requirements for the cannabis products to oral intake the THC content may not exceed be used in the trials poses some major chal- 10 mg per serving. Cannabis products must lenges of which lawmakers may not have been not contain levels of contaminants that give fully aware. Most of the cannabis from the black rise to health concerns and must be limited market consumed today is produced indoors. In to specified amounts of foreign components, general, the cannabis flower grown indoors in a microbial contaminants, mycotoxins, heavy controlled environment tends to be denser, con- metals, pesticides and solvent residues from tain a higher trichome count and provide a more extraction. Notably, the maximum levels of potent “high” than cannabis grown outdoors or delta-9-THC content as per Annex 6 of the in greenhouses, although this point is subject Contaminants Ordinance of 16 December to repeated debate in the cannabis community. 2016 do not apply to edibles. • Cannabis products must abide by a whole set Concerns have been raised that the requirements of safe packaging and labelling requirements. set with regard to organic farming, which limits • Advertising for cannabis products remains suppliers of the cannabis trials to soil-bound prohibited. outdoor production or greenhouse operations, • Minors (under the age of 18) are excluded may thwart obtaining reliable data from the trials from the pilot trials and participants must by failing to attract enough participants willing already be consumers of cannabis products. to try a new avenue with products to which they • The maximum amount of dispensed cannabis are not accustomed. Other challenges may be to per participant per month may not exceed 10 abide by a precise THC limit of 20% when grow- g of total THC. ing outdoors where weather conditions cannot • Cannabis products may only be dispensed at be controlled, as well as the use of clones only points of sale with trained staff and adequate as opposed to “feminised” seeds which are not infrastructure, and at a price that is in line compliant with the Organic Farming Ordinance with the black market. Distribution will there- but have grown popular as they can be relied on fore be made possible in both pharmacies to produce female plants only and increase yield. and social clubs, for example. • Both public and private organisations can It should be noted that no such restrictions have apply to the FOPH to conduct cannabis trials. been imposed on cultivation of cannabis for • Outside of the pilot trials, the existing can- medical purposes. nabis prohibition with the associated penal provisions for violations of the law will con- Commercial opportunities tinue to apply. The high bar set regarding the application process, cultivation, production, distribution and A long list of further requirements is detailed in data-gathering of recreational cannabis prod- the Ordinance on Pilot Trials as per the NarcA of ucts in the context of the trials, as well as the 31 March 2021. black-market pricing ceiling, will leave very limited room for extracting meaningful margins for

22 SWITZERLAND Trends and Developments Contributed by: Daniel Haymann, Froriep

suppliers or distributors of the pilot programme. in a statement made on 23 May 2018, candidly While the pilot trials allow for up to 5,000 partici- admitted that the NarcA has failed to fulfil its pants, the first impressions obtained by univer- purpose of protecting the population, consid- sities and cities planning to conduct such trials ering the more than 300,000 regular cannabis is that the actual number of participants will be consumers in Switzerland. A flourishing black significantly lower (ie, in the hundreds at best), market, the lack of quality controls and reliable mostly for funding reasons. However, the trials information, the ineffective protection of youth, may well be a first step towards a trend in further as well as a growing risk of “cut” cannabis prod- liberalisation of the recreational cannabis mar- ucts containing artificial and toxic substances ket. Companies with a reliable, quality-controlled warrant the replacement of the current prohibi- supply chain may be well positioned to use the tion with a fully regulated cannabis market that pilot trials to establish brand equity, create inno- meets the requirements of Swiss addiction pol- vative new products and gather valuable experi- icy, according to the initiative. ences in a new and developing market. On 28 April 2021, Switzerland’s Health Commis- Further Political Developments sion of the National Council voted in favour of The Siegenthaler Initiative a controlled legalisation of cannabis. This is the On 25 September 2020, Heinz Siegenthaler, a first important political hurdle the Siegenthaler member of the Swiss National Council, filed a parliamentary initiative has passed. As a next parliamentary initiative which was signed by a step, the equivalent commission in the Council total of 40 members of the Swiss National Coun- of States will review the dossier. cil, in an attempt to force a new and compre- hensive regulation for the cultivation, production, This latest political development surrounding trade and consumption of cannabis containing cannabis legislation is proof that the urgency to THC, in line with the recommendations of the comprehensively regulate this growing market Federal Commission on Narcotic Drugs (EKSF). has manifested itself in the general public con- The main objectives of the initiative are the con- sciousness. The limited view of cannabis as an trol of production and trade by governmental allegedly harmful narcotic drug and the stigma- bodies, the separation of the medical and the tisation of its consumers is making way for the non-medical markets, the drying-up of the black recognition of its significant medical potential, as market by lifting the prohibition, the regulation of well as the promising economic growth it could taxation and advertising as well as cultivation for further unfold in recreational and industrial use. personal use. Given its already progressive regulatory frame- The reasoning accompanying the original text work regarding THC thresholds compared to the of the initiative describes a general moral and rest of Europe and the liberalisation of cannabis legal inconsistency in cannabis prohibition for medical purposes, Switzerland is in an excel- based on current scientific research, especially lent position to expand its lead in Europe as an if contrasted with other harmful substances such innovative, responsible and attractive hub for as tobacco and alcohol. The Federal Council, cannabis entrepreneurs all along the value chain.

23 Trends and Developments SWITZERLAND Contributed by: Daniel Haymann, Froriep

AUTHOR

Daniel Haymann heads second career as an attorney, Daniel gained Froriep’s cannabis practice. He over 12 years of experience in the trading, specialises in corporate and mining, energy and related industries based commercial law, with a focus on out of Switzerland, Singapore and Hong Kong, private equity and venture working for multinational corporations as a capital transactions, as well as trader and in managerial positions. He is a on regulatory matters in the cannabis industry. member of the Zurich and Swiss Bar He advises investors, start-ups and vertically Associations, the International Cannabis Bar integrated companies in the cannabis industry Association and is a co-founder of the network along the value chain. Prior to embarking on a of European Cannabis Lawyers.

Froriep Legal AG

Bellerivestrasse 201 8034 Zurich Switzerland

Tel: +41 44 386 60 00 Fax: +41 44 383 60 50 Email: [email protected] Web: www.froriep.ch