Cannabis Shops Reopen: Legal Sale Confirmed by Expert Opinion

As of today, cannabis flowers are once again available for purchase in specialized cannabis shops across Austria. This development follows a legal assessment by constitutional law expert Heinz Mayer, affirming that the sale of these products is permissible under current laws.

Klaus Hübner, the leader of the newly established Austrian Cannabis Association, emphasized that while cannabis flowers are subject to tobacco taxes, they do not fall under the purview of Austria's tobacco monopoly. This clarification comes after a period of legal uncertainty triggered by a decision from the Customs Authority in late 2024, which interpreted a high court ruling to mean that only tobacco retailers could sell legal cannabis flowers, citing the Tobacco Monopoly Act.

The impact of this interpretation was significant, with reports indicating that nearly 500 CBD shops in Austria faced revenue declines of up to 80%. Many businesses dealt with penalties, tax claims, and even insolvencies, while consumers began seeking products abroad, leading to a loss of tax revenue for the Austrian government and putting many businesses at risk.

Mayer's analysis for the Cannabis Association states that the court ruling only established that cannabis products are subject to tobacco taxation, which applies to their sale and storage. However, it explicitly stated that no conclusions regarding the tobacco monopoly could be drawn from this tax obligation. Mayer further noted that extending the tobacco monopoly to cannabis sales would be unconstitutional and infringe on individual economic freedoms.

Concerns about potential business closures due to media reports suggesting that cannabis shops would no longer be allowed to sell cannabis flowers were addressed by Mayer. He pointed out that some media outlets had reported this situation in a misleading manner, which contributed to a climate of fear among shop owners.

In response to these developments, the Cannabis Association is prepared to pursue legal action if necessary. They are ready to engage in administrative proceedings to clarify the legal framework surrounding cannabis sales.

One remaining challenge is the collection of tobacco taxes. The association has alerted the Finance Ministry to issues arising from point-of-sale systems that do not accommodate the 34% tobacco tax. As a workaround, some retailers have reportedly indicated 'abroad' as the location of the sale, but this is not a sustainable solution. The Cannabis Association has advised retailers to set aside both the tobacco tax and an additional 20% value-added tax.

The cannabis industry in Austria encompasses approximately 500 to 1,000 businesses, including at least 400 retail shops, as well as laboratories, agricultural producers, wholesalers, and importers. Hübner advocates for a distinct cannabis law, similar to regulations in other countries such as Switzerland, Liechtenstein, and the Czech Republic, which allow for a THC limit of 1% in freely traded products. This limit is considered more realistic compared to the current 0.3% threshold.

The Cannabis Association is also calling for the decriminalization of cannabis, asserting that the trend toward legalization is inevitable. However, they stress the need for a clear, rational, and well-considered regulatory framework.