Austria to Limit Low-THC Cannabis Sales and Impose Tax

Austria to Limit Low-THC Cannabis Sales and Impose Tax

Image: APA/AFP/FRED TANNEAU

 

Austria’s top administrative court has ruled that smokable cannabis flowers with low THC levels can only be sold in licensed tobacconists (Tabak-Trafik shops) and will now be subject to a 34% tax.

The ruling, handed down by the Administrative Court (VwGH), states that dried cannabis flowers fall under Austria’s Tobacco Tax Act – a decision expected to generate millions in additional revenue for the state.

New Rules for Low-THC Cannabis

Cannabis flowers containing less than 0.3% tetrahydrocannabinol (THC) – the primary psychoactive compound that produces a “high” – are not classified as narcotics in Austria. This means they can be legally bought, owned and used.

The most common form of low-THC cannabis legally sold in Austria is CBD cannabis, which is rich in cannabidiol (CBD), a non-psychoactive compound known for its calming effects.

Court Case Behind the Ruling

The case was brought by a cannabis retailer in Vorarlberg, which had imported large quantities of dried cannabis flowers from Switzerland. Austria’s customs office in Feldkirch demanded nearly €30,000 in tobacco tax, but the retailer argued that the products were not tobacco.

The Federal Fiscal Court ruled that the tax still applied, as Austria’s Tobacco Tax Act covers smokable products made entirely or partly from substances other than tobacco. The retailer then took the case to the Administrative Court, which has now upheld the decision.

Blow to Cannabis Shops

The ruling is expected to have a significant financial impact on cannabis retailers, as CBD products make up a large share of their sales. Hannes Hofer, head of Austria’s Monopoly Administration, estimates the legal smokable cannabis market to be worth around €50 million.

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