Austria: Let them eat space cake

The fact that an old-school, stuffy bakery like Aida is now jumping on the cannabis bandwagon is a clear sign that CBD products have arrived in the mainstream. In fact, there is a growing interest in CBD-containing products made from hemp throughout Europe.

But isn't cannabis consumption forbidden in Austria? On closer inspection, the Austrian legal situation is quite complex and should be examined in detail.

Cannabis: science and law

For a better understanding of the topic, it must be explained that cannabis contains various so-called "cannabinoids". The two best-known of these substances are Cannabidiol ("CBD") and Tetrahydrocannabinol ("THC"). The latter is psychoactive and responsible for the "high" experienced when using conventional (illegal) cannabis. Pure CBD, on the other hand, does not cause a state of intoxication. What makes the substance interesting is its alleged analgesic, neuroprotective and anti-inflammatory effect. Yet, many of the effects attributed to Cannabidiol have not yet been scientifically confirmed, as the Austrian Agency for Health and Food Safety Ltd ("AGES") points out. In short, the medical effect of CBD is not scientifically proven, but the substance is also unsuitable as a drug.

Its characteristics also explain why the Austrian legislator does not classify CBD, unlike THC, as an addictive drug or psychoactive substance. The Narcotic Substances Act ("SMG") constitutes the main framework of Austria's drug policy. It focuses on quantities on the one hand and a classification of substances on the other. However, the SMG refers to the Narcotic Drugs Ordinance ("SV") with regard to the specific substances that are to be classified as narcotic drugs. Annex I I.1.a SV stipulates that the flowers and fruit stems of plants belonging to the species Cannabis, from which the resin has not been removed, are considered narcotics and are therefore prohibited. The prohibition therefore does not extend to the seeds and leaves of the cannabis plant, but only to its THC and CBD-containing flowers and fruit stems.

Rules are made to be broken

The fact that CBD-containing products may nevertheless be sold in Austria is owing to an exceptional provision adopted in October 2017. The flowers and fruit stems of certain varieties of industrial hemp are exempted from the prohibition, provided that their THC content does not exceed 0.3 %. In comparison, cannabis acquired on the Austrian black market contains 15.1 % THC, as a study by the Austrian Federal Ministry of Health has shown.

It is thus established that CBD in pure substance is not qualified as a drug and, secondly, that certain cannabis extracts with a very low THC content are also permitted by law.

Medicinal?

In connection with the legal qualification, the question also arises as to whether CBD products might possibly be medicinal products. After all, many consumers of CBD oils, ointments and teas are people suffering from pain who seek relief. When classifying products as medicinal products, it must be borne in mind that there are not only functional medicinal products that actually influence physiological functions through their action. The competent authority responsible for pharmaceutical regulatory affairs, the Austrian Federal Office for Safety in Health Care ("BASG"), explicitly does not regard CBD products as functional drugs.

Beyond that, there are medicinal products by presentation. Relating to that category, the customer may assume that it is a medicinal product with regard to the name or declaration. It is irrelevant whether and if pharmacological effects are present. In other words, medicinal products by presentation are agents that generally look like and are presented as medicinal products. Consequently, there is a risk that those CBD products which give the impression of being a medicinal product will be classified as such and thus subject to authorisation. Nevertheless, CBD is generally not a medicinal product.

What to expect

It is unclear how long the legal situation will remain as it is. According to the "Regierungsprogramm", the Austrian government's plan is to ban the sale of hemp seeds and plants. Such a ban would primarily have consequences for farmers who grow hemp and for owners of "grow shops" who resell liners and plugs of the cannabis plant. The Austrian market leader in the sale of hemp plants, a multimillion Euro business by the name of Flowery Field, has already abandoned the sinking ship and relocated its operations to Italy.

Most recently, a number of young Austrian entrepreneurs have entered the European CBD market with their start-ups. Worth mentioning in this context is CBDoken, which uses blockchain technology to trade CBD bottles. It would undeniably be a heavy blow if a CBD ban were implemented in Austria, since substantial revenues are being generated worldwide by the trade of this substance. In the US, CBD trading is already a one-billion-dollar industry and there is immense growth potential. In view of this, it is possible to imagine the impact that a ban on CBDs could have. At present, however, such a ban is fortunately not being openly discussed. There is nothing else but to trust that the Austrian government will recognise the potential of this substance, if not for the human body, then at least for the economy.

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