IS THE AUSTRIAN GOVERNMENT JEOPARDISING ITS MEDICAL CANNABIS INDUSTRY?

Austria has one of the most complicated legal frameworks when it comes to medical cannabis. We have navigated this convoluted environment as part of our European Country Review.

Austria is an interesting case in the European market. The Alpine country has a rich history of hemp production and a burgeoning cannabis industry from Vienna to Salzburg. However, the election of right-leaning conservative, Sebastian Kurz, may spell troubling times for the cannabis community.

Legislation

Austria - Leafly.jpg

(The Belvedere, Source: Leafly)

Generally speaking, Austria has enjoyed liberal drug laws with regards to private citizen use. The Austrian Narcotic Drugs Act only punishes cannabis cultivation for the purpose of drug production — a very significant distinction.

The introduction of new legislation in 2008, allowed citizens to grow cannabis plants at home and decriminalised the use of cannabis products in public.

Although it is illegal to grow cannabis with the intention of producing THC, it is legal to purchase cannabis seeds and seedlings in Austria. In fact, the ambiguous wording of the law effectively means that plants are legal at all points up to flowering, as prior to that THC levels are unlikely to be above the legal limit of 0.3%.

A Change of Chancellor

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(Sebastian Kurz, Source: CNN)

In December 2017, it was reported that the newly elected People’s Party, run by Chancellor Sebastian Kurz, planned to ban the “sale of hemp plants and hemp seeds”.

In the recently published government program, a small, inconspicuous announcement on page 44 is one of many measures of a planned criminal law reform. Such a move of the governing parties ÖVP (Austrian people’s Party/conservative) and FPÖ (Right Wing Liberals/populistic) could cripple the country’s cannabis industry to its foundation.

Mr Kurz, the youngest chancellor in history, had originally suggested a contemporary approach to cannabis legislation before the election. The recent bill, however, has shown an intention to break this promise in favour of a conservative approach though the long-term plans of Kurz’ party are currently unknown.

The Medical Market

The 2008 law has permitted the cultivation of cannabis for medicinal and scientific purposes. However, the Austrian government has failed to sanction treatments for medicinal cannabis patients.

The import and sale of Sativex and Dronabinol are permitted with a special license. Dronabinol is mostly imported from Germany, and is the most commonly prescribed drug, due to its relatively lost cost.

The 2008 Bill gave the exclusive right to grow cannabis to a single government department under control of the Health Ministry. Domestic cultivation of medicinal cannabis is therefore still illegal, although there have been several acquittals of individuals who have successfully argued that their cultivation was for personal medical use.

According to law, only THC is prohibited, but none of the other hundreds of Cannabinoids are illegal.

Peter Kolba worked as Head of Law for the Consumer Information Association in Austria (VKI) before parting ways in January 2017 to start his own pro-legalisation organisation (COBIN).

According to Kolba, a candidate for the Peter Pilz Party, there are many issues with medicinal cannabis treatments in Austria:

“The current possibilities are not sufficient. There are the following hurdles for pain patients”
“You have to find a doctor who is familiar with cannabis in medicine. (In cities easier, partly impossible in the countryside)”
“The doctor must be ready to issue a ‘narcotic drug prescription’.”
“The cost of Dronabinol are partly unworkable. In my dosage (3 x 10 drops) I would have to spend about 800 euros per month.”
“The health insurance companies accept these costs very hesitantly and only with the presence of clinical studies.”

As with any biopharmaceutical products, its success is dependent on the education of the medical community. Though Austria imports medicinal cannabis products via a license, there is a huge opportunity for competition.

A History in Hemp

Production of industrial hemp for the production of fibers, hemp seed oil and all other non-psychoactive parts of the hemp plant was allowed in 1995 after a forced hiatus since 1958.

The plants have been sold for decades for the purpose of “aromatherapy and decoration,” but owners are not permitted to let their plants bloom. However, it’s no secret that most of the thousands upon thousands of clones sold in Austria are destined for cannabis production.

One region in Northern Austria, Hanfthal (Hemp Valley) has revived a tradition of hemp production nearly 800 years old.

“We have a strange legal situation. Consumption of a [cannabis] joint is forbidden, but the selling of the hemp plant as a room air quality improver or a decorative plant is allowed,” - Toni Straka of the Hemp Institute in Austria.

Straka estimates that at least 300,000 seedlings are sold each month and many successful  hemp businesses have been established in Vienna and its suburbs.

Attack of the Clones

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(Clones in Vienna, Source: Dinafem)

Since 2006, in Vienna and the surrounding areas, clone facilities have been able to produce without interference creating the single biggest clone market in Europe.

In most European Union countries, cannabis seeds are legal and home growing is the name of the game. But Germany and Switzerland don’t allow the sale of cannabis seeds. So growers from these countries simply visit neighboring Austria, where customers can purchase an array of high quality clones and cuttings. In fact, Austria has exported immature plants to Germany for the production of Dronabinol.

In Vienna sales by major vendors already surpass seven-digit figures. In the border regions to the Czech Republic, Italy, Switzerland and Germany, the new and legal business model is both popular and profitable.

A Look to the Future

There are multiple reasons that investors and entrepreneurs should be aware of the Austrian market.

In view of an EU single market, many cannabis farmers from the eight neighboring countries appreciate the controlled quality and large selection of strains in Austria.

Legalization would clearly do more than forego enforcement costs. The Vienna Hemp Institute calculated that the Austrian state misses out on €600 million in tax revenues every year (based only on the amount of cannabis confiscated by the police, which is only a fraction of the market).

Many analysts forecast that as their German neighbours make strides in their approach to cannabis medicine, Austria may very well follow suit. Future german medical legalisation would curb home grows, keeping cannabis in pharmacies.

Austria has a seed and immature plant market available for non-narcotic purposes and could well capitalise on the niche industry as a seed, clone or cutting exporter for the growing CBD market in Europe.

A history of hemp production and a blooming seed market could position Austria as a big player in the cannabis cultivation market if the incoming People’s Party don’t stifle the growing market.