ARTICLE Legal aspects of cultivation, trade and use of cannabis in Serbia

ARTICLE Legal aspects of cultivation, trade and use of cannabis in Serbia

For article in Serbian published by LawLife Portal click HERE

For article in Serbian published by Pravna komora Srbije click HERE


Is cannabis legal in any form as per the legal system of the Republic of Serbia?


LEGALITY OF CANNABIS

If a person in the Republic of Serbia decides to produce cannabis oil or CBD gummies for anxiety and stress relief in order to sell and market them further, would that, or any other cannabis-related activity, be legal? 


The short answer is – YES!

However, there are a number of particularities, loopholes and open questions that cause this answer to lack an absolute certainty.


REGULATIONS

Issues of importance for this area are primarily regulated by the Law on Psychoactive Controlled Substances ("Official Gazette of the RS", No. 99/2010 and 57/2018, hereinafter - the Law) and the Rulebook on Conditions for Growing Hemp ("Official Gazette of RS", No. 64/2013, hereinafter – the Rulebook).
 

According to Article 60 of the Law:

The cultivation of hemp (Cannabis) is only permitted for the purpose of fiber production, production of seeds for animal feed, further propagation, processing, examination of seed quality, as well as for the purpose of seed trading. 

The cultivation of hemp is only allowed to a legal or natural person who has a permit issued by the ministry in charge of agriculture.

According to paragraph 5 of the same article of the Law, the Minister of Agriculture, Forestry and Water Management (hereinafter referred to as the Minister of Agriculture) is to prescribe the variety of hemp (Cannabis) that can be grown and traded, as well as the conditions that must be met in order to obtain a permit for the cultivation of hemp.

The Minister of Agriculture is the one who adopted the Rulebook, and in light of this article, the most important provision is the one prescribing that it is only allowed to grow varieties belonging to the hemp species (Cannabis sativa L) registered in the Register of Varieties of Agricultural Plants, in accordance with the Law regulating the recognition of varieties of agricultural plants where the level of substances from the tetrahydrocannabinol (THC) group is below 0.3%.

To summarize, the cultivation, production and trade of industrial hemp, namely CBD (Cannabidiol), is permitted. Strictly speaking, since it is a cannabinoid, a derivative of cannabis, which does not contain more than 0.3% THC, this should also be applicable to Delta 8 and Delta 9 derivatives.


REALITY

In reality, things are not that simple. First of all, although CBD itself is not psychoactive, someone who wants to use its oil would have to extract it from the flower of industrial hemp, which contains a high percentage of CBD, up to 0.3% of THC, which is psychoactive. It is allowed by law in a given percentage.

However, although the cultivation is allowed, the extraction of CBD oil is not regulated by law.

Moreover, the Commission for Psychoactive Controlled Substances gave an opinion stating that CBD is actually a psychoactive substance and that it can produce unwanted effects. The practical consequence of this position of the Commission is that while a percentage of THC of 0.3% can be tolerated in cultivation, in circulation that percentage must be 0, which is impossible. Also, the seeds of such varieties of hemp can be used for non-domestic animal feed, bearing in mind that the meat of domestic animals (e.g. beef) is used in the human diet, so there is a risk of CBD indirectly being consumed by the humans. 

To encapsulate, although there is a legal basis that allows the cultivation and trade of hemp under the prescribed conditions, uncertainty stays, especially due to a lack of a uniform practice of state authorities.

Nevertheless, products containing CBD are widely sold in the territory of the Republic of Serbia, as souvenirs, as anxiety relief food products, or as medicinal oils, cosmetic products, etc.


CONDITIONS

Certain conditions must be met in order for someone to be able to perform activities in this field.


In terms of hemp cultivation:

•    Legal persons / natural persons / entrepreneurs are allowed to cultivate; 
•    It is necessary to obtain a Cultivation Permit issued by the Ministry of Agriculture;
•    The permit lasts for one production year and is issued upon request;
•    The content of the permit request and its attachments are prescribed by the Rulebook and the Law;
•    The request is to be submitted before hemp planting and no later than 30 April of the current year.

Permits are also required for production and trade. The request for such permit can be submitted to the Ministry only by a certain type of legal entity, namely: 

•    a legal entity that has been issued a drug manufacturing license, i.e. a manufacturer of active substances that is registered in the Register of Manufacturers of Active Substances, in accordance with the regulations governing the field of drugs/medicines and medical substances;
•    a legal entity that produces chemicals and is registered in the Register of Chemicals Producers in accordance with the regulations governing the field of chemicals; 

•    other legal entities, in accordance with the Law.

A request for a production/trading permit can be submitted to the Ministry by any of the above-mentioned forms of legal entity, as well as by a legal entity that has been issued a license for the wholesale trade of drugs/medicines and medical substances or a license for the wholesale trade of chemicals. Based on the submitted request, the Ministry of Agriculture issues the specified permit in accordance with the submitted request. 

It is very important to keep in mind that a Permit for Production or Trade of a Psychoactive Controlled Substance, is issued for:


•    a specific psychoactive controlled substance, 
•    a certain amount that is produced, 
•    a specific validity period, 
•    a specific place of production, 
•    a specific production facility,
•    a specific room within the facility. 

 

The license thus obtained is non-transferable, and its transfer to other persons is strictly prohibited.

In order for the permit to be issued, the legal entity has to meet certain conditions:

1)    the legal entity must have a person responsible for the production/trade of a psychoactive controlled substance; this person can also perform other tasks, in accordance with the law;
2)    the legal entity must have a representative, i.e. a person responsible for the production/trade of a psychoactive controlled substance from point 1) of this article, who has not been sentenced for an economic offense for an act in the field of psychoactive controlled substances;
3)    the legal entity has conditions for the storage of psychoactive controlled substances in special rooms, where other products are not stored, or it wields metal safes, in accordance with the law;
4)    the legal entity meets other conditions prescribed by law and regulations adopted for its implementation.

The permit is issued within 90 days from the date of receipt of the proper request, and it is valid for five years from the date of issue. The permit may be valid for a shorter period of time, if so requested by the applicant.

Finally, the import/export of such substances, including products that contain cannabis extracts, can be carried out exclusively by a legal entity, namely the one a license for the production/trade of a psychoactive controlled substance has been issued to. For each import or export, the Minister of Agriculture issues a permit, based on a previously submitted request containing the shipment declaration.

The duration of the permit also depends on whether the legal person opted for import or export. The import permit lasts for three months and is valid from the day of the issue, and the export permit is issued for a period determined by the Minister of Agriculture in accordance with the period of validity of the import permit, or another act, of the competent authority of the country to which the psychoactive controlled substance is exported.

Furthermore, the Ministry must be informed on actions of import and export. When the export or import occurs, the legal entity must notify the Ministry in writing about the amount of the exported/imported substance within 15 days of the realization. If the import/export does not occur within the period specified in the permit, the Ministry must still be notified within 15 days from the day the permit expires, and all copies of the issued permits must be returned.

The export and import are interlaced, which is confirmed by the provision of the Law stating that an export permit can be issued if an import permit or another relevant act of the competent authority of another country had been submitted.

CONCLUSION

According to all the above mentioned observation, we can conclude that:
•    it is allowed to grow hemp only in the form of industrial (CBD) hemp, which contains up to 0.3% THC;
•    it is allowed to trade it if it has those same properties.

The regulation in this area is extremely strict and exclusive – there is a number of different permits and the persons who can obtain them - but CBD-based derivatives are not prohibited for as long as they contain up to 0.3% THC.

The market of the Republic of Serbia is not liberal enough, even though there is a big potential. Industrial hemp is grown on almost 1.000 hectares in the area of the province of Vojvodina alone, and the former SFR Yugoslavia was the main exporter in Europe back in the day and even made a quarter of European production. The impression is that its popularity is growing again due to numerous scientifically proven benefits.

Therefore, it is expected that the Republic of Serbia will further liberalize the market in the future, taking into account international activity, especially the decisions of the competent bodies of the United Nations in the area on the decriminalization of cannabis and marijuana. 

Authors:

Miloš Vučković, Senior & Managing Partner

Aleksandar Čermelj, Associate
 

*The information in this announcement does not represent legal advice and is provided for general informational purposes only.

**Partner, Senior Associate and Associate refers to Independent Attorney at Law in cooperation with IVVK Lawyers.

17/03/2023

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