CBD demand in Austria is large and still growing, most likely due to the country's lack of a legal adult-use program and its very limited medicinal cannabis market. Seeing the opportunity, manufacturers and retailers have tapped into this demand by offering a variety of products from smokables to edibles, tinctures to cosmetics, and many more. However, with the European Union regulatory update and reclassification of CBD-infused ingestible products as Novel Foods, CBD shops and retailers carrying CBD had to take immediate measures to either discontinue or modify the products offered. Edibles and cosmetics are currently banned in Austria, and ingestibles will need Novel Food authorization to get back on shelves. In the meantime, smokables - flowers, CBD cigarettes, e-liquids and vape cartridges - are still allowed and maintain their popularity. Retailers also offer "aromatherapy" oil products in lieu of tinctures, which have been included under the tinctures category.

The Novel Food regulations began to impact Austria's CBD market in 2019 and will continue to affect prospects for edibles and cosmetics in the coming years, as the authorization process takes time. Due to COVID-19, all non-essential businesses have closed, and retail channels are limited for CBD sales, which will cause sales to shrink in 2020. However, Austrian consumers and their high demand for CBD will prevail, bringing growth back to the market once Novel Foods authorizations are ironed out and the economic and logistical impacts of the Coronavirus pandemic phase out.

Regulatory Analysis

As the Austrian government seeks to tighten regulation around the existing legal hemp CBD market, food, nutritional supplements and cosmetics are banned until an authorization process and system of quality control is developed. However, hemp flower and oil can still be sold as “aromatherapy” products. The possibility of banning cannabis seeds and cuttings remains and has caused companies like Flowery Field to relocate their operations outside of Austria to continue distribution of EU certified strains to other countries. The change in Novel Foods regulations has also caused many retail shops to empty their shelves and manufacturers to recall and relabel products. As an illustrative example, one major Austrian CBD manufacturer (CannHelp Gmbh), explained that, in addition to its portfolio shrinking from 14 to four products, the regulatory change's effects on company’s operations are as follows:

• CBD oil is now sold as an “aroma product”

• Substantial amounts of money have been invested into re-labeling, shipping, communication, and compensation of pharmaceutical wholesalers

• More than 50% of company employees had to be laid off

• No compensation was received from the government for the costs the company incurred
  

Due to the “CBD Decree” of the Austrian Federal Government in December 2018, CBD products are not allowed to be marketed as food supplements, and they were renamed as “aroma oils”. As aroma oils are not pharmaceuticals or food supplements, they are declared as “not suitable for consumption," and companies cannot give recommendations for usage or dosage.

The banning of CBD-infused food, drink, nutritional supplements and cosmetic products following recent European and Austrian regulatory changes have caused concern regarding whether CBD products might be banned altogether. These changes received backlash and were considered an anti-business move by the government. Addressing these concerns, the Ministry of Social Affairs stated that it has no intention of banning sales of CBD products, but is looking to maintain stricter regulations and improve quality control of the market.

Regulations by Product Type

• Smokable CBD, known as ‘hash light’, is and will remain considered legal as there is no suggestion that it can be classified as food and can be found in the forms of flower, CBD cigarettes, e-liquids, and vape cartridges. These products are subject to the youth protection laws set in Austria, mandating that to legally purchase product, consumers must be over the age of 18. Outside of this, restrictions are relatively minor. Sales of hemp flower, as long as it does not exceed 0.3% THC after decarboxylation and follows certain labeling requirements, are permitted. For example, CBD cigarettes may be sold anywhere from supermarket chains to CBD specialty shops to vending machines.

• As indicated above, CBD oil/tinctures must now be sold as an “aromatherapy product”. Once companies change the labeling and packaging of their products to meet the criteria of the new regulations, the aroma oils may be sold in pharmacies, supermarkets, and CBD specialty shops.

• Though edible and cosmetic CBD products are currently banned in Austria, edibles have a path back to market once they are authorized by the European Commission. Despite that, the potentially high cost of Novel Food compliance will increase the barrier to entry significantly for ingestible CBD products in Austria, with some projecting the process for obtaining approval to cost up to half a million euros.

Competitive Landscape

The competitive landscape of Austria’s CBD market has shifted dramatically since the introduction of the ban on CBD edible and cosmetic products. Prominent brands enduring the changing legislation have been highlighted below.

Europe-based Distributors: 

Medihemp

Medihemp, based in Austria, cultivates EU-certified organic industrial hemp varieties on 200 hectares of land. The company’s main product categories are CBD oils, capsules, and hemp food products such as tea, latte, hemp oils, hemp nuts, and protein powder. Medihemp’s processed products can be found in 42 outlets, including CBD specialty shops and pharmacies, throughout Europe in 11 countries and ships to EU countries via their website. The company offers CBD pet products under the Vetrihemp brand and is a member of the European Industrial Hemp Association.

Dr. Greenthumb

Dr. Greenthumb sells CBD flower to more than 60 CBD Specialty Shops - representing nearly one-fourth of total CBD Specialty Shops in the country - as well as offering product through its 32 vending machines operating throughout Austria, through which adults over the age of 18 can buy up to three grams of CBD at a time. The company has already onboarded its first set of franchisees as well.

Biobloom GmbH

Biobloom GmbH, located in Apetlon, Austria, specializes in the production of 100% organic hemp products without additives and sells CBD-infused teas, extracts, cosmetic products and hemp oil and seeds. Their products are available via any pharmacy in Austria without a prescription, as well as through health food stores and on their online platform from which they ship to EU countries.

This list is not exhaustive, a number of additional companies have a significant foothold in Austria. For detailed profiles of various companies thriving in the country and region, see our European Competitive Landscape Page.

Distribution Analysis

Legally permitted CBD products can be found in the following establishments around Austria:

• CBD Specialty Shops: There are roughly 250 CBD Specialty Shops in Austria, with a majority located in Vienna. Though regulations related to CBD have changed, these shops continue to carry hemp flower, “aromatherapy” oils, and vape products. Magu CBD store, for example, sells “aroma oils”, flowers, topicals, balms, hemp tea, herbal mixtures, vape kits and crystal concentrates.

• Supermarkets carry predominantly CBD cigarettes and some forms of “aromatherapy” oils in alignment with new state regulations. Currently, there are 240 Lidl chain stores in Austria where CBD cigarettes can be found.

• Pharmacies will offer a wider range of CBD medicines should the Ministry of Health decide there is sufficient data to conclude that they have medically therapeutic properties. However, it is expected that CBD will be available only as a “magistral preparation”, meaning it will be prepared in a pharmacy in accordance with a prescription for an individual patient, and sold under prescription. Currently, pharmacies do carry a variety of CBD products in the form of non-edible “aromatherapy oils” and sprays.

• Vending machines sell CBD cigarette packages, which have garnered a great deal of public and media attention. Dr. Greenthumb’s machines cost $1,160 (€1,000) each to install and charge a 1.6 cent fee to verify the age of each buyer. They offer a quick and inexpensive way to provide the public access to this product, thus the unique machines have taken off in the country. Adults can purchase up to 3 grams of flowers for €10–30 after verifying their age via their ATM card