Comparing Cannabis Economies in Central and Eastern European Countries
Comparing Cannabis Economies in Central and Eastern European Countries
The Czech Republic has one of the highest rates of cannabis use among adults in Europe
Comparing Cannabis Economies in Central and Eastern European Countries
The code 420 is not only the country code of the Czech Republic but also a code for smoking marijuana, created secretly by a group of Californian teenagers, as explained in Vox. Eventually, 420 was converted into 4/20 as a day for celebration in an American manner, and now weed enthusiasts celebrate it worldwide, including in Central and Eastern European countries.
Over time, marijuana, also known as weed, cannabis, and hemp, became a leader of the most used psychoactive drugs in the European Union: Over 25% of the population of the EU used weed at some point in their lifetime, reported Statista. Weed consumption is gradually growing yearly, supporting the cannabis economies in the Czech Republic and other Central and Eastern European countries.
Let's take a closer look at annual sales, sales taxes, the demographic and psychographic profile of smokers, country regulations, and new business models and technological improvements in the production and delivery of cannabis.
Overview of the Cannabis Consumption in Central and Eastern Europe
In the Czech Republic, the consumption of cannabis is relatively high compared to other countries in Central and Eastern Europe. According to Deutsche Welle, a German public, state-owned international broadcaster, approximately 30% of the adult population has tried marijuana, and 8% to 9% use it regularly. This makes the Czech Republic one of the countries with the highest rate of people who have had at least one THC experience in their lifetime.
Slovenia and Croatia also have relatively high rates of cannabis consumption, with around 22% and 19% of adults, respectively, having tried marijuana at least once in their lifetime, as noted in the article published in the International Journal of Environmental Research and Public Health.
While cannabis remains one of the popular drugs in Slovakia, its consumption rate was roughly 13% in 2015, as reported by Statista. In neighboring Hungary and Poland, the use of cannabis is relatively low. For instance, in 2018, approximately 8.5% of the adult population used the substance, as outlined in the European Drug Report for 2019.
In Eastern Europe, cannabis consumption is a golden mean between the rate of the Czech Republic and Poland, and Hungary. For instance, in Estonia, it is 13%, whereas in Latvia, it is 8.5%, and in Lithuania, it is 7.4%. The use of synthetic cannabinoids, also known as "spice" or "K2," is a growing problem in some parts of Central and Eastern Europe. These substances are often marketed as legal alternatives to cannabis, but their effects can be much more dangerous and unpredictable. In the Czech Republic, for example, there have been reports of severe health problems and even deaths linked to synthetic cannabinoids.
In other states, such as Moldova, any use of cannabis is unlawful, and no data supports this information. The availability of medical cannabis varies across the region.
Annual Sales of Cannabis by Country
The cannabis market in Central and Eastern Europe is characterized by a complex legal landscape, with some countries adopting a more progressive approach towards cannabis legalization while others have strict prohibitive laws. Despite the differences, the medical cannabis market in the region is growing, and there are indications that more patients are turning to cannabis as an alternative treatment for various medical conditions.
In the Czech Republic, the sales of medical cannabis have been increasing steadily, with a 63% increase in 2021 alone. The country has one of the most liberal attitudes toward cannabis in Europe. Patients with medical conditions can access cannabis through licensed dispensaries.
However, the situation is not the same in other countries, such as Poland, where the legal status of cannabis is constantly changing, and the medical cannabis market is not vividly reported. Nonetheless, the market for medical cannabis in Poland quadrupled from PLN 210 million in 2019 to PLN 900 million in 2021. It is expected to reach PLN 2.2 billion by 2026.
In Croatia, medical cannabis has been legal since 2015. Still, there are no available sales figures, and the drug is often expensive and not affordable for many patients. In Slovenia, medical cannabis has been legal since 2012, but no data supports medical sales. In Slovakia, cannabis is illegal for all purposes, and possessing or using even small amounts can result in imprisonment. The same goes for Hungary, where cannabis is unlawful, except for Sativex, a cannabis-based mouth spray prescribed to patients with multiple sclerosis.
In Moldova, using cannabis in any form is illegal. In Estonia, medical cannabis is legal but only available as cannabinoid-based medications that require a prescription from the Ministry of Social Affairs. Lithuania has also legalized medical cannabis, but only in the form of synthetic cannabinoid-based medicines that require a prescription from a doctor. Latvia, on the other hand, has legalized only synthetic cannabinoid-based medications for medical use.
Despite the legal complexities, the legal cannabis market size in Europe was estimated at USD 103.5 million in 2020, and it is projected to grow to USD 140.5 million by 2025. In addition, unlicensed medical cannabis sales in Europe were estimated at EUR 354 million in 2020. This figure is expected to increase as more patients seek alternative treatments for chronic conditions.
Sales Taxes on Cannabis Across Eastern and Central Europe
Sales taxes on cannabis in several countries in Eastern Europe have revealed varying levels of legal restrictions and taxation policies.
The Czech Republic has decriminalized personal possession of cannabis and legalized medical cannabis since 2013. Sales taxes on cannabis are not clearly defined, although VAT is generally charged at 21%.
Cannabis is illegal for recreational and medical use in Poland, Slovakia, Hungary, Lithuania, Latvia, and Estonia. At the same time, CBD products with minimal THC levels are permitted. Cannabis sales taxes are not explicitly specified; however, VAT is typically levied at 20% to 23%.
Croatia has decriminalized personal cannabis possession and permitted restricted medicinal use, with no clear definition of cannabis sales taxes; however, VAT is 25%. Meanwhile, Slovenia decriminalized personal cannabis possession and permitted therapeutic use with no sales taxes but a 22% VAT.
The legal status of cannabis and sales taxes on cannabis in Eastern Europe vary widely. As the situation in each country can change, it is vital to stay up-to-date with the latest news and developments regarding cannabis legalization and taxation policies.
Demographic and Psychographic Profile of Smokers
Cannabis use rates vary across different countries in Europe. According to recent data, the Czech Republic has one of the highest rates of cannabis use among adults in Europe, with 11.1% of their population consuming cannabis in the preceding twelve months as of 2020. Male rates were higher than female rates, with 14.1% of males and 8.2% of females using cannabis. The cannabis use rate was also higher among younger age groups (15-34 years) and lower educated groups.
In comparison, Poland has a moderate cannabis use rate among adults in Europe, with 6.6% of their population consuming cannabis in the preceding twelve months as of 2019. Male rates were higher than female rates, with 9.3% of males and 4.0% of females using cannabis. The cannabis use rate was higher among younger age groups (15-34 years) and urban residents.
Slovakia has a low cannabis use rate among adults in Europe, with 4.5% of their population consuming cannabis in the preceding twelve months as of 2019. Male rates were higher than female rates, with 6.5% of males and 2.5% of females using cannabis. The cannabis use rate was higher among younger age groups (15-34 years) and urban residents.
Similarly, Hungary, Lithuania, Latvia, and Estonia all have low cannabis use rates among adults in Europe, with rates ranging from 3.7% to 4.0%. Male rates were higher than female rates in all these countries, ranging from 1.9% to 6.0% for females and 3.8% to 5.7% for males. The cannabis use rate was higher among younger age groups (15-34 years) and urban residents in these countries.
On the other hand, Moldova has a meager cannabis use rate among adults in Europe, with only 0.7% of their population consuming cannabis in the preceding twelve months as of 2019. Male rates were higher than female rates, with 1.0% of males and 0.4% of females using cannabis. The cannabis use rate was higher among younger age groups (15-34 years) and rural residents.
Croatia has a high cannabis use rate among adults in Europe, with 10.2% of their population consuming cannabis in the preceding twelve months as of 2020. Male rates were higher than female rates, with 13% of males and 7% of females using cannabis. The cannabis use rate was higher among younger age groups (15-34 years) and lower educated groups.
Slovenia has a moderate cannabis use rate among adults in Europe, with 6% of their population consuming cannabis in the preceding twelve months as of 2020. Male rates were higher than female rates, with 8% of males and 4% of females using cannabis. The cannabis use rate was higher among younger age groups (15-34 years) and lower educated groups.
Country Regulations and the Route to Legalization
Let's take a tour of the cannabis laws in some European countries and see where they stand regarding the recreational and medical use of marijuana.
In the Czech Republic, the recreational use of cannabis is prohibited, but possessing up to 15 grams or cultivating up to five plants is not considered a crime. Medical cannabis has been allowed since 2013, and the government is considering legalizing adult usage by 2023. They plan to collaborate with Germany on this matter, so stay tuned!
Moving on to Poland, similar laws apply. Recreational use is banned, but possession of small amounts is decriminalized and subject to prosecutorial discretion. Medical cannabis has been legal since 2017, but unfortunately, the government has shown little interest in legalizing cannabis for adult usage.
Possessing up to 10 grams or producing up to five plants in Slovakia is allowed, but recreational use is still prohibited. Medical cannabis has been legal since 2020 and is available at pharmacies with a prescription. However, the government has not expressed interest in legalizing cannabis for adult use.
Hungary takes a strict approach towards cannabis, with recreational use wholly prohibited. Even possession or cultivation of any quantity can land you in prison. Medical cannabis is also banned, but certain cannabinoid medications are authorized with a prescription. Unfortunately, it seems that the government has no intention of legalizing cannabis for any reason.
In Lithuania, possessing up to 0.5 grams or producing up to five plants is allowed, but recreational use is still prohibited. Medical cannabis has been legal since 2018 and is available at pharmacies with a prescription. However, no news has been on legalizing cannabis for adult use, as contemplated in some other countries.
In Latvia, possessing up to one gram or cultivating up to one plant is decriminalized and penalized by a fine or community service. Medical cannabis has been allowed since 2019 and may be purchased at pharmacies with a prescription. Nevertheless, the government has no plans to legalize adult-use cannabis.
In Estonia, possessing up to 7.5 grams or producing up to five plants is not criminalized, but recreational use is still prohibited. Medical cannabis has been allowed since 2005 and is available at pharmacies with a prescription. However, the administration has no plans to legalize adult-use cannabis.
Moving on to Moldova, any possession or cultivation of cannabis is illegal and can result in jail time. Medical cannabis is outlawed, but certain cannabinoid medications are legal with a prescription. Unfortunately, the government does not intend to legalize cannabis for any purpose.
In Croatia, possession of up to five grams or producing up to five plants is decriminalized and punished by a fine or treatment. Medical cannabis has been legal since 2015 and may be purchased at pharmacies with a prescription. However, there is no indication that the government intends to legalize cannabis for adult use.
New Business Models and Production Technological Improvements
Another significant trend in the cannabis industry is the integration of technology. As cannabis becomes more mainstream and accepted, businesses seek ways to optimize their operations and scale their growth. Forbes notes that technology solutions can help with everything from cultivation and processing to distribution and retail. Examples of cannabis technology solutions include software for tracking inventory and compliance, hardware for precise dosing and extraction, and automation for streamlined production.
Forbes predicts that the cannabis market will continue to grow as a global industry. More countries legalizing or reforming their cannabis laws will only fuel this growth. Additionally, as outdated stereotypes about cannabis fade away, the drug will become more mainstream and accepted by society. This means that businesses will need to adapt and evolve to meet the changing demands of consumers.