“Starting today, cannabis flowers will once again be sold in cannabis specialty stores,” says Klaus Hübner, chairman of the newly founded Austrian Cannabis Federation (ÖCB). This is legally possible, referring to a recent expert opinion by constitutional expert Heinz Mayer. “Legally tradeable cannabis flowers are subject to tobacco tax, but are clearly not part of the Austrian tobacco monopoly,” Mayer clarifies.
The legal uncertainty was triggered by a decision from the Customs Authority at the end of 2024, which referred to a Supreme Administrative Court ruling. The Customs Authority interpreted this ruling to mean that the sale of legal cannabis flowers was exclusively reserved for tobacco shops and wholesalers, citing the Tobacco Monopoly Act. The impact was severe, as reported by Hübner at a press conference in Vienna on Thursday: nearly 500 CBD shops in Austria suffered sales drops of up to 80%. There were penalty notices, tax claims, and insolvencies. Meanwhile, customers migrated abroad, causing the Austrian treasury to lose tax revenue, and the industry faced acute existential threats.
Mayer: Tobacco Monopoly for Cannabis Would Be Unconstitutional
In his opinion for the Cannabis Federation, constitutional expert Mayer states: “The court only decided that cannabis products are subject to the tobacco tax law – that’s correct and uncontroversial.” This applies to the sale, taxation, and storage of cannabis. “However, the Administrative Court explicitly stated that no conclusion about the tobacco monopoly should be drawn from the tobacco tax obligation.” Extending the tobacco monopoly to cannabis would, according to Mayer, be unconstitutional, a violation of EU law, and an unlawful interference in freedom of enterprise.
Why did shops not sell cannabis flowers in recent months? Mayer says, “Well, they were scared.” Some media reports were “quite diabolical” and “quite aggressive,” claiming that hemp shops had to close and only tobacco shops could sell cannabis. This was due to a “misinterpretation of the Finance Ministry’s stance,” Mayer claims.
The Cannabis Federation is prepared to pursue legal clarification if necessary. “We are definitely prepared for an administrative procedure. This would actually be something that would somewhat benefit us because we could hand this legal case over to our lawyers.”
Action Needed on Tobacco Tax
Another problem is the handling of tobacco tax. “We’ve informed the Finance Ministry in advance about this issue. It’s the case that the cash registers don’t have an appropriate entry for the 34% tobacco tax. You can solve it by simply selecting ‘abroad’ as the location, but that can’t really be a serious solution,” indicating a need for further action from the Finance Ministry. The ÖCB has advised specialty shops to not only set aside the 34% tobacco tax but also an additional 20% VAT.
The industry, according to Hübner, comprises about 500 to 1,000 businesses, including at least 400 shops, as well as analytical labs, agricultural businesses, wholesalers, and importers. Hübner calls for a dedicated cannabis law, as seen in other countries. “We would recommend countries like Switzerland, Liechtenstein, and the Czech Republic as models. There, a 1% THC limit applies to freely traded products.” This is seen as a more realistic value than the current limit of 0.3%. THC is the psychoactive main compound in cannabis that induces the “high” when consuming marijuana or hashish, while CBD (Cannabidiol), another compound in cannabis, has no intoxicating effects.
The ÖCB advocates for the full decriminalization of cannabis. “I believe cannabis legalization is an unstoppable trend. That is, of course, one of our goals,” says Hübner. However, a “clear, reasonable, and well-thought-out regulation” is also necessary.
