Czech Republic: Cannabis legalization project aims to create a “strictly regulated” market

The Czech Republic is on the verge of creating a strictly regulated adult/recreational cannabis market that will allow for the legal sale and distribution of cannabis in the country. Despite possession being decriminalized since 2010, the sale and distribution of cannabis has remained illegal. The proposed regulation aims to create greater protection for consumers and greater control over the quality and quantity of cannabis on the market, while increasing tax revenues for the government.

Licensing fees and a cannabis tax would be introduced for growers and sellers in a market that would function similarly to an excise tax. Annual net revenues from the cannabis tax are estimated to be up to CZK 2 billion (about €85 million) in the Czech market alone, with additional revenues expected from exports to countries such as Germany, Malta, Netherlands, Luxembourg and Switzerland , where they are already in force, or about to come into force, or policies for the legalization of adult/recreational use of cannabis as pilot projects for this purpose.

There would be no limit to the number of licenses issued for sales and cultivation, as long as applicants pay the annual fee, which is expected to be around CZK 50 (about €000) for a small shop, although fees would be calculated based on the area of ​​activity, be it cultivation or stores, and so the government expects this to generate up to CZK 2 million (about €100 million) a year in fees.

“The cannabis black market is growing across Europe. In the Czech Republic, we seem to have reached your ceiling and I don't see many other options to stop you from working other than taking your demand and putting it in the hands of legal sellers. This is what happened in Canada, for example, where seventy percent of the black market has been taken over by the legal market in the last five years” – Jindřich Vobořil

Cannabis would be sold in specialized stores, however advertising of cannabis products on the market will be prohibited, and each batch will have uniform packaging, without advertisements or photographs, just a description of the quantity, and a warning about the risks.

A special registration system will be created for users, and a customer will only be able to buy a limited amount per month to avoid starting to trade on their own. Authorized sellers would have access to each customer's record using a specific code and would be able to verify the quantity already purchased. The limit of the proposal is currently between 100 and 150 grams per person per month, but the maximum amount is still under negotiation.

There are still disagreements about the user registration system, as well as the maximum limit. Some experts oppose the creation of the register, while others believe that monitoring the market is essential. There are also questions about the content of cannabinoids, especially CBD due to its properties of lessening some of the adverse effects of THC that some consumers experience, where some experts consider whether or not products available for sale should have a minimum percentage of CBD, as well as the percentage of THC will be limited to between 18% and 20%.

The proposed regulation of the cannabis market in the Czech Republic is a step towards a much more controlled and better regulated market, given the current situation in the country. With the introduction of licensing fees and tax on cannabis, the state will be on the verge of making billions in revenue, however it is also necessary to bear in mind that excess fees and licensing costs can end up creating adverse situations which are intended to create, especially when the main objective is to provide greater consumer protection and greater control over the quality of cannabis products.