State of play: The societal impact of cannabis criminalisation in the Czech Republic
Prohibiting the possession and cultivation of cannabis the way the Czech Republic does it is costly and fails to provide an efficient framework for regulating high-risk usage of psychoactive substances and reducing the harm linked to them. Repressive cannabis policies do not reflect the much lower negative health impacts and high-risk addiction rates for cannabis compared to other substances. Experts agree that adverse health impacts and high-risk addiction occur much more frequently for legal alcohol and tobacco.
Cannabis consumption in the Czech Republic is high despite the current regulation: various surveys have shown that 16.6 % of young adults (15-34 years) have used cannabis products in the last year.
Repressive policies are costly:
- 11.2 % of inmates are in prison for offences connected to the production, distribution, and possession of addictive substances; 45 % of these are related to cannabis (most of these with suspended sentences).
- The Czech police investigate ca. 2,000 cannabis-related criminal offences annually, spending capacities for investigating drug-related offences, which have no real victim and cause no actual harm. These capacities then cannot be used to prevent, detect, and investigate other crimes.
- Repressive policies also have problematic effects on health, which go directly against the primary official purpose of prohibition – protecting public health1
- Last but not least, the illegal cannabis production and distribution sectors completely evade taxation, although this tax revenue could be a significant boost to the state budget, financing targeted prevention and harm-reduction for cannabis usage, amongst other things.
The abovementioned reasons lead us to believe the current cannabis regulation is unsuitable and present a proposal for a regulated cannabis market. Many Western countries have already introduced such a market. This study uses the data and research from these states, while also considering all local specificities and reflecting on the state of play in the Czech Republic.
The regulation impact assessment, RIA, is a set of steps analysing the expected impact of the proposed regulation. RIA is an inherent part of the legislative process in the Czech Republic and comprises the first step when introducing or amending laws.
The detailed legal text of the legislation will be another critical step. The text will be presented by the Government or MPs to the Chamber of Deputies of the Czech Parliament for discussion. If the proposed text garners the support of legislators in both chambers and the President, a regulated cannabis market may be launched in the Czech Republic in 2025.
Summary of the presented proposal
The tabled proposal for a regulated cannabis market is based on a Regulatory Impact Assessment analysis (RIA) 2. The report was provided by an expert group of economists, lawyers, addictologists, and public policy scholars, which identified 27 regulatory points in total and proposed regulation versions for each based on international studies. The work was complemented by a multi-criteria analysis of international cannabis market regulation models and a preliminary costs/benefits analysis of regulation in the Czech Republic. Recommendations on the best regulatory versions consider not only regulatory results abroad but also the regulatory and socio-economic context of the Czech Republic. A detailed explanation of the presented proposal is enclosed in Section 3 of the report, which evaluates the various regulation versions. An overview of the selected versions can be found in Annex I of the report.
The primary goals of the new legislation on the cannabis market regulation can be divided into three pillars:
- Lowering health risks for users connected to the current illegal cannabis market.
- Creating an efficient risk reduction, treatment, and prevention system for problematic cannabis uses.
- Restricting cannabis access for vulnerable population groups (minors, addiction-prone users etc.).
Enforcement and control
- Eliminating disproportionate criminal sanctions of otherwise unproblematic cannabis usage.
- Decreasing the number of detained inmates sentenced for cannabis-related offences.
- Reducing organised crime connected to illegal cannabis production and distribution.
- Freeing up the financial and personnel capacities of law enforcement currently blocked by prosecuting illegal cannabis handling.
Economy, market, and budget
- Increasing state budget revenue from the legal cannabis market.
- Creating a legal market for economic operators in the Czech Republic.
- Supporting SMEs
Impact on the state budget and other public budgets
- Creating a control agency (Agency) for cannabis regulation in accordance with the 1961 Single Convention on Narcotic Drugs, for an est. 1.25 million EUR per year.
- Creating a licensing register for handling cannabis for recreational purposes and an electronic monitoring system for the production and distribution of cannabis across all licensed entities for an estimated 4.1 million EUR.
- Increasing the funding for cannabis-related prevention, treatment and harm-reduction service for up to 14 million EUR per year, depending on the number of new daily users and the percentage of cannabis users who enter treatment or use harm-reduction programmes.
- Cannabis excise duties and additional tax revenue in the form of VAT and income taxes for licensed entities authorised to produce and distribute cannabis, an estimated 26.8 million EUR up to 75 million EUR per year, depending on the size of the cannabis market and cannabis price developments after legalisation.
- Cutting law enforcement expenses in connection to the new legal market for cannabis for recreational purposes and licensed possession, production, and distribution, at an estimated 18.7 million EUR up to 25.3 million EUR based on experience from abroad, depending on whether the black market proportion is similar to the situation in Uruguay, Canada, or the USA.
The resulting budgetary impacts
- show income between 32.8 to 84.3 million EUR.
Impact on economic operators
- Creating new economic opportunities connected to the licensed cultivation, distribution, and sales of recreational cannabis.
- Strictly regulating profit motives on the recreational cannabis licensed market to prevent negative public health impacts.
Impact on local and regional authorities
Allowing municipalities to regulate licensed sales and cultivation of cannabis, i.e., allowing or banning licensed cannabis sales in the municipality.
We analysed international cannabis regulation models to identify possible societal impacts and select market regulation tools and consumer behaviour tools to minimise them. The societal impacts of international regulation were assessed using multi-criteria analysis, which points towards neutral or positive societal impacts of the proposed regulation.
Positive societal impact:
- Lowering the number of cannabis-related misdemeanours and criminal offences, including organised crime, which currently provides cannabis to the illegal market.
- Reducing direct and indirect law enforcement-related costs of up to 25.3 million EUR, as handling cannabis will be legal for persons licensed to hold cannabis for personal use.
- Reducing victimisation and stigmatisation by making cannabis available on a legal market.
as well as
- Reducing harm to health and society connected to the use of recreational cannabis-related by introducing an efficient prevention and treatment system, as well as quality assurance.
- Restricting cannabis access for vulnerable population groups (minors, addiction-prone users etc.).
Possible negative societal impacts:
- An increase in the number of recreational cannabis users in the adult population and a possible related rise in high-risk use and associated societal costs.
- Higher rates of negative impacts on health and society related to problematic cannabis usage.
Tools for minimising the negative impacts on health and society:
- Introducing a register for limiting cannabis sales to authorised users on the licensed recreational cannabis market (a monthly buying limit, a possibility for setting individual limits).
- Offering individual harm-reduction and treatment interventions connected to the register.
- Strengthening cannabis-related prevention, harm-reduction and treatment services, funded from the recreational cannabis excise revenue as part of a special licence for cannabis associations on a local level.
- Banning all forms of promotion and advertising on the licensed cannabis market.
- Limiting profit avenues for economic operators that might violate public health protection requirements.
Compliance with the proposed regulation with the Single Convention on Narcotic Drugs
The proposed regulation was drafted to fully comply with the Czech Republic’s commitments to the European Union and the UN in controlling narcotic and psychoactive substances.
The Czechoslovak Socialist Republic consented to be bound by the Single Convention on Narcotic Drugs on 31 July 1961. The proposed text complies with the Convention except for Art. 4 para. c), stating that states shall limit exclusively to medical and scientific purposes the ‘production, manufacture, export, import, distribution of, trade in, use and possession (hereinafter referred to as “handling”) of drugs. In this respect, the regulation introduces a possibility of legitimate handling of cannabis and cannabis products also for recreational consumption purposes (such as in alcohol or tobacco), but strictly under the condition of gaining authorisation for this handling in the meaning of the Conventions and in compliance with the Convention.
As for other Convention provisions, all obligations concerning establishing a state Agency for cannabis, criminalisation of unauthorised handling, statistical and recording obligations, and obligations related to the export and import of narcotic substances shall be upheld. Therefore, the proposed regulation will not infringe upon the Czech Republic’s commitments to the UN, the International Narcotics Control Board (INCB), and other states. The Czech Republic will keep respecting and upholding international law in this respect. Based on the proposed regulation and in compliance with the Convention, the Czech Republic will keep restricting and prosecuting unauthorised cannabis handling.
When we look at the current developments across the ocean and at home in Europe, it is clear that states have been changing their approach to the issue of psychoactive cannabis. Scientific evidence also shows that restrictions should be limited, so it is no wonder that more and more countries have been updating their policies on this substance. A balanced policy based on strictly regulating availability on the one hand and a comprehensive prevention and risk reduction system on the other would limit the negative consequences of problematic cannabis use while adding a much-needed revenue stream to public budgets. The Netherlands, Uruguay, America, Canada, Malta, and Spain – they all have in common a progressive approach to the issue of cannabis. Some of these states focus on all types of personal cannabis use, from cultivation for personal use to the cannabis market. In contrast, others only regulate some parts, such as cannabis clubs. However, all of them offer a great deal of inspiration and lessons learned.
The key pillars of the proposed ideal regulation reflecting the Czech context include legalising licensed production and sales, as well as the home-growing of cannabis. People who cannot cultivate their own cannabis will also have the opportunity to join cannabis clubs. The state will monitor all these activities: production, sales, buying, and home-growing will only be legal upon licensing (for companies) or registration (for natural persons). The registration of users and licensing of producers and traders will allow the Czech Republic to comply with international conventions and to adapt the offer of addictology services to actual demand. In prevention and risk reduction, regulated sales will offer new avenues of targeting users: stores can be targeted by awareness-raising campaigns and will be required to employ trained staff. Restrictions will also apply to the stores as such: municipalities will be in charge of their numbers and locations (allowing them to ban stores near schools, for example), and stores will not be allowed to sell alcohol alongside cannabis, as combined usage can cause higher risks. Producers will also be regulated to create a diverse market with many small and medium-sized enterprises.
1 Csete et al., 2016; Scheim et al., 2020; Small, Kerr, Charette, Schechter, & Spittal, 2006; Werb et al., 2008