Czechia Moves Ahead of Germany in Race to Establish Europe's First Commercial Adult Use Market
With a majority in parliament there is a strong possibility the Czechia’s ruling right-leaning coalition will overtake Germany and become the first European country to create a commercially-based, adult-use cannabis market.
Peter McCusker, BusinessCann
In September this year Czechia’s national drug coordinator, and former anti-communist campaignerJindřich Vobořil announced plans to deliver comprehensive cannabis reform by early 2024.
He went on to say the adult-use regulations should cover sales, production, recommended THC levels, and the licensing of manufacturers and retailers.
His plans have the backing of Czechia’s Prime Minister Petr Fiala who leads a five party coalition with 108 seats, and therefore a majority in the 200-seat Parliament.
Benjamin-Alexandre Jeanroy, of Paris-based cannabis consultancy Augur Associates, believes Czechia’s cannabis initiative will progress more quickly than that of its German neighbours.
He said: “There is a very strong possibility Czechia will complete before Germany. As well as protecting public health Czechia’s right-leaning government says it wants to secure the economic benefits that cannabis reform will bring.
“It anticipates the potential to export to the German market depending on how it is legally argued, and it welcomes the additional tax revenues a regulated commercial market will deliver to the public finances.
“Germany has to overcome the lack of a majority in the Upper House, the Bundesrat, the issues caused by the conservatives slowing down cannabis reform, whilst the on-going differences between members of the Traffic-Light Coalition should not be underestimated.”
Czechia And Cannabis
Czechia, with a population of over 10 million, is one of the most liberal-minded European countries when it comes to cannabis.
It permitted the use of medical cannabis in 2013 after previously decriminalising cannabis use and possession three years earlier.
Earlier this year it streamlined access to medical cannabis after witnessing a growth in patient numbers to 4,601 – up almost a quarter on 2021.
A first draft of Czechia’s path out of prohibition was issued by coalition members the Pirates Party this September – see here.
It focuses on harm reduction, removing the illicit market and protecting public health. It recommends establishing licensed production and sales as well as self-cultivation and the potential to form cannabis social clubs.
It also focuses heavily on the economic benefits which it highlights in a press release, saying: “Reform, regulation, taxation – these are the three pillars with which we, as Pirates, approach the regulation of the cannabis market.
“Through taxation, we will get billions of crowns a year and at the same time prevent unnecessary expenses on repression. In addition, if we succeed in launching a regulated market together with the German one, it will mean huge opportunities for our economy in the field of exports.”
The proposals are similar in many ways to those of its German neighbours with one particular exception being the recommendation that all cannabis users should register with the state.
This oddity – imagine if all alcohol consumers had to register with the government – will no doubt be challenged in the drafting process.
The Pirates’ proposals will inform the initial draft which Mr Vobořil had previously said would be completed by the end of the year, but looks like being delayed until Spring 2023.
One significant issue which will have to be tackled is aligning with the international drug conventions which the Pirates’ proposals have attempted to address.
These hurdles continue to challenge signatories to the conventions, as highlighted by BusinessCannrecently.
Mr Jeanroy believes Mr Vobořil will address these over the coming weeks in a pan-European way as Czechia currently holds the rotating six-month presidency of the European Union until the end of 2022.
Evidence of a co-ordinated European approach to cannabis emerged earlier this year when a handful of countries – Germany, Czechia, Malta, Luxembourg and the Netherlands – met to develop a joint approach to reform.
Whether this will help clarify the issues around supplying the markets is still uncertain. German Health Minister Karl Lauterbach has previously stated that to align with the conventions all of its supplies will have to be sourced domestically.
And, Germany, with a population of 83 million and a potential annual demand of 500 tonnes will become a magnet for global cannabis companies. Czechia currently secures most of its supplies from one licensed company.
Public health and the potential economic benefits of a booming commercial cannabis sector – as witnessed in North America – are the key drivers of European reform, and cross-border trade in cannabis can potentially align with the international treaties, argues Mr Jeanroy.
He believes the complexities associated with cannabis reform are the legacy of over 100 years of prohibition.
He said: “There seems to be a tendency to over-regulation as governments are still working from their prohibition reflexes.
“Progressive governments will need to listen, to debate and to develop. This hasn’t been done in Europe before so there will be diversions and contradictions and this will take time, and may temper the desire to move forward quickly.
“It may not be perfect, at first, but we have the capacity and the ability to evolve a workable framework which can evolve as we progress.”
Stephen Murphy CEO and Co-founder of Prohibition Partners identified the benefits of Czech reform, saying: “The Czech Republic has a unique opportunity to lead the EU in the evolution of drug policy, which is beginning to move beyond the outdated prohibition of cannabis.
“They have the highest prevalence of cannabis use in any country in Europe, meaning legalisation there represents a big step forward for the industry but also for the protection of those hundreds of thousands of consumers in the country.
“What we need to see before we can really think about the industry in the country is the legal structure of the legislation and how it deals with Czechia’s commitment to the Single Convention on Narcotic Drugs. The Pirates party has stated that their plan is in line with these commitments but we have yet to see these details fleshed out. It is unlikely that Czechia or any other country will proceed in violation of international and EU law.
“If we have learned anything from the legalisation efforts in Germany, Switzerland and Netherlands, the process must be given the time it needs, and delays may well be expected.”
In relation to Czechia’s progress Mr Jeanroy added: “This is due in no small part to the incredible efforts of Mr Vobořil. He is the locomotive driving reform and it wouldn’t be happening at this speed if he wasn’t driving it.”