Medical Cannabis & Cannabinoid Regulation 2024

Last Updated May 30, 2024

Switzerland

Law and Practice

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In Switzerland, products containing hemp or Cannabis sativa L (cannabis), are regulated by a set of laws and regulations that are intertwined and complex, and that create a level of legal uncertainty that lawmakers have realised needs to be addressed. The main rules surrounding cannabis are regulated by the laws and regulations on narcotics, therapeutic products, health insurance, foodstuffs, chemicals, cosmetics, utility articles, tobacco substitutes, plant varieties and seeds.

To facilitate matters, this chapter will provide an overview of only the most important aspects of cannabis laws and regulations, and draw a distinction between:

  • cannabis products containing a tetrahydrocannabinol (THC) content of 1% and above, which are considered prohibited narcotics under the Federal Act on Narcotics and Psychotropic Substances (the “Narcotics Act”, NarcA); and
  • products with a THC content below 1%, which have been popularised and aggregated into a somewhat untechnical jargon as “CBD products” – this refers to products containing cannabidiol, and which are not subject to the NarcA and so are more freely marketable.

Due to recent developments, also regarding the use of other cannabinoids (CBG, for example), the following statements, in so far as they relate exclusively to CBD, can in principle also be applied to other (non-psychotropic) cannabinoids. Both THC and CBD have garnered notoriety as the most prominent cannabinoids over recent years; however, research has shown that well over 140 cannabinoids, which are naturally occurring compounds found in the cannabis plant, can be identified (THC, THCV, CBD, CBG, CBT, CBN, CBL, CBE, etc).

Cannabis Products With THC of 1% and Above

The Narcotics Act, NarcA

The use of narcotics is primarily regulated by the NarcA. Today, the implementation of the NarcA is governed by four ordinances:

  • on the control of narcotics (BetmKV);
  • on the addiction to narcotics (BetmSV);
  • on the register of narcotics, psychotropic substances, precursors and auxiliary chemicals (BetmVV-EDI); and
  • on pilot trials under the NarcA (BetmPV). 

The BetmKV governs the activities of the Swiss Agency for Therapeutic Products (Swissmedic) in the area of granting authorisations for the legally permitted handling of controlled substances and the associated controls, and is of importance for the industrial use of these substances.

The BetmSV regulates the measures for prevention, therapy and harm reduction, as well as the exemptions for the restricted medical use of cannabis-containing medical products and the corresponding controls.

The BetmVV-EDI lists all controlled narcotics and psychotropic substances and determines to which control measures they are subjected.

Lastly, the BetmPV regulates the requirements for conducting scientific pilot trials with narcotics of the cannabis type in accordance with Article 8a NarcA.

Cannabis is classified as a prohibited narcotic if its THC content exceeds 1%, unless it is used for medical purposes. An amendment to the NarcA in force since 1 July 2011 provides for a restricted decriminalisation of the preparation of a negligible quantity of cannabis for one’s own consumption (10 g). Cannabis products with a THC content of lower than 1%, on the other hand, can be legally produced and marketed.

Pursuant to the NarcA, the Federal Office of Public Health (FOPH) may issue exceptional licences for cultivating, importing, producing and placing on the market narcotics containing an effective concentration of cannabinoids, where this is not prohibited by an international agreement and these narcotics are needed for scientific research.

Since 1 August 2022, an exceptional authorisation from the FOPH is no longer required for cannabis with a THC content of 1% and above, if it is used for medical purposes. In other words, doctors are free to prescribe cannabis to their patients as part of their regular treatment.

The long-sought relief of the recent medical cannabis reform is still, almost two years after its introduction, considerably new and will be described in further detail in the adjacent Trends and Developments article here.

Therapeutic products law

Legal basis

The regulations on the use of medical products and medical devices are mainly set forth in:

  • the Federal Act on Medicinal Products and Medical Devices (the “Therapeutic Products Act”, TPA);
  • the Ordinance on Pharmaceutical Products (VAM);
  • the Ordinance on Advertising of Pharmaceutical Products (AWV);
  • the Ordinance on the Approval of Medicinal Products (AMZV);
  • the Medicinal Products Licensing Ordinance (MPLO); and
  • the Medical Devices Ordinance (MedDO).

These laws and regulations apply to therapeutic products according to the TPA, including medical cannabis products.

Authorisation

Ready-to-use medical products may be placed on the market only if authorised by Swissmedic. The application for obtaining a market authorisation for medical cannabis products with indication must include (for example) detailed documentation on the results of physical, chemical, galenic and biological or microbiological tests, as well as the results of pharmacological and toxicological tests and clinical trials. The applicant must also prove that the medical products are of high quality, safe and effective and that the medical product in question does not pose a risk to the safety of consumers.

Only one ready-to-use medical product with a THC content above 1%, Sativex, is fully approved in Switzerland. Sativex can be prescribed without a special permit for spastic convulsions in multiple sclerosis patients only (ie, its application is very limited in scope).

In the context of cannabis-based medicinal products, reference can also be made to Epidyolex, a ready-to-use medicinal product without THC but including cannabidiol. Epidyolex was approved by Swissmedic on 10 February 2021, and is used as adjunctive therapy for seizures associated with Lennox-Gastaut syndrome (LGS) or Dravet syndrome (DS) in patients two years of age and older.

The manufacture of medical products and pharmaceutical excipients whose manufacture requires a licence must conform to the recognised rules of Good Manufacturing Practice (GMP). The MPLO refers to the EU’s GMP guidelines (Annex 1). Thus, in Switzerland the EU’s GMP guidelines are applicable.

The GMP guidelines provide the minimum requirements that a manufacturer of medical products must meet to ensure that their products are consistently of sufficiently high quality for their intended use. This includes risk management, documentation, continuing improvement processes as well as internal and external audit requirements. Each manufacturer must determine and document in writing how it complies with and implements the GMP guidelines.

An audit must verify whether all the required boxes of the GMP standard were ticked, and thus that the products meet the safety and quality standards. Swiss-domiciled companies with a valid establishment licence for the manufacture of medical products may apply to Swissmedic to obtain a GMP certificate through its eGov GMP-GDP online portal. 

Exemption from authorisation

The Therapeutic Products Act also provides for the market placement of medicinal products that are exempt from authorisation. These include medical cannabis products manufactured as an extemporaneous preparation (“magistral formula”) – that is, medicinal products prepared according to a doctor’s prescription by a public pharmacy or a hospital pharmacy for a given person or group of persons. The conditions for the use of medicinal products that are exempt from authorisation are restrictive. Such use is mainly considered in order to ensure supply if no authorised drug is available for this purpose. The prescribing physician and the pharmacist preparing the drug (or the manufacturer), who are controlled by the authorities, are protecting public health by having appropriate training.

As mentioned above, medical cannabis products as magistral formulas, produced by a pharmacy based on a medical prescription, no longer require exceptional authorisation from the FOPH under the NarcA. The same applies to an approved drug containing cannabis (eg, Sativex) that is dispensed “off-label” for an indication other than the one for which it has been approved.

Health insurance law

The reimbursement of costs for medicinal products by the compulsory health insurance (OKP) generally requires that the medicinal product be included in the list of specialties (SL) of the FOPH. To be included in that list, the medicinal product requires both a licence from Swissmedic and proof of its efficacy, usefulness and cost-effectiveness (WZW).

In Switzerland, there is considered to be limited evidence for the efficacy of cannabis in the treatment of chronic pain, nausea in chemotherapy and spasms in multiple sclerosis, etc. Accordingly, no medicinal product, not even Sativex, is on the FOPH’s list of specialties for reimbursement by the compulsory health insurance.

Only in cases of hardship, and upon request for a cost approval by a physician, is reimbursement by the OKP of a medicinal product not listed in the SL possible. It is considered a case of hardship if the use of the product is expected to provide a major therapeutic benefit against a disease that may be fatal for the insured person or result in severe and chronic health impairments, and if no other effective and approved treatment method is available due to a lack of therapeutic alternatives. Unfortunately, the medical cannabis reform did not provide relief in terms of reimbursement by the OKP, and no adjustments were made to the reimbursement requirements.

A Health Technology Assessment (HTA) report published on 30 April 2021, on behalf of the FOPH, was prepared to clarify the scientific evidence regarding the efficacy and cost-effectiveness of medical cannabis products and to differentiate between the various patient groups. The HTA ultimately decided that the efficacy data on medical cannabis use for chronic pain and spasticity was inconsistent (ie, studies with comparable patient populations and similar types of medical cannabis did not show consistent results pointing in the same direction) and inconclusive (ie, none of the studies was able to draw a definitive conclusion on the efficacy of medical cannabis). As a result, the WZW criteria for medical cannabis have not been confirmed.

Cannabis Products With THC Content of Below 1%

Cannabis products with THC content below 1% are not captured by the scope of the NarcA. Of all the known cannabinoids in the cannabis plant, CBD stands out as the most prominently marketed cannabinoid in the cannabis market. On 12 April 2024, Swissmedic, the FOPH, the Federal Food Safety and Veterinary Office (FSVO), the Cantonal Pharmacists’ Association and the Association of Swiss Cantonal Chemists jointly released an updated version of “Products containing cannabidiol (CBD) and other cannabinoids which do not fall under narcotics regulation: Overview and implementation guide”, the main elements of which are set out below. 

CBD products can only be marketed legally if they comply with the Swiss legislation that is applicable to their respective classification. The range of CBD-containing products is extensive, and includes:

  • raw materials such as cannabis buds or flowers with high CBD content;
  • extracts in the form of oils or pastes; and
  • ready-to-use products such as capsules, food supplements, liquids for e-cigarettes, tobacco substitutes, scented oils, chewing gums and ointments, some of which are offered as personal care products.

In order to determine the applicable legislation, the product must be assigned to the corresponding product category based on the relevant factors, such as composition, intended use and dosage. 

As an initial step, however, it must be determined whether the CBD product is a raw material or ready-to-use product. CBD products considered as raw materials are governed by the Chemicals Act and the Chemicals Ordinance (ChemO). If no intended use can be determined for a cannabis-based raw material, it should be placed on the market in accordance with the legislation governing chemicals. Lastly, the Federal Act on Product Safety (PrSG) acts as a fallback catch-all legislation for products for which there is no other specific applicable law. 

CBD offered as chemicals

CBD-containing products may be marketed legally as scented oils. Manufacturers must classify, package and label the product in accordance with the provisions of the ChemO, after having assessed that substances or preparations they intend to place in the market do not endanger human life, health or the environment.

However, if the presentation of the products indicates, or suggests, other uses that are covered by other legal provisions, their marketability must be assessed according to these provisions. This may be the case, for example, where a “scented oil” is sold in a cartridge for e-cigarettes, in which case foodstuffs/utility articles legislation applies for the assessment of marketability. The same would apply, for example, where cannabis oils containing full-spectrum hemp extracts are labelled as having a specific nutritional value.

The requirements of the general ruling issued by the Swiss Chemicals Notification Authority on 24 March 2022 must also be taken into account. According to this general ruling, CBD-containing scented oils (ie, ready-to-use products) may only be placed on the market or sold to consumers if they contain a denaturant in a suitable concentration to prevent misuse (ie, oral application).

CBD sold as medicinal products

Ready-to-use CBD-containing products with a medical intended use are regarded as medicinal products under the TPA, and require authorisation by Swissmedic to be placed on the market. Companies that manufacture, distribute or dispense medicinal products containing CBD always require a corresponding authorisation from Swissmedic or the respective canton.

Epidiolex, a ready-to-use CBD monopreparation prescribed for the adjuvant treatment of two rare forms of epilepsy, was approved by the United States Federal Drug Administration (FDA) on 28 June 2018. This was the first time a ready-to-use CBD medicinal product was approved anywhere in the world. Recently, on 10 February 2021, the same preparation was approved in Switzerland under the name of Epidyolex.

Pharmacies can also prepare and dispense CBD-containing medicinal products as extemporaneous preparations (ie, as a magistral formula), based on a prescription of a specialised physician for Lennox-Gastaut syndrome and Dravet syndrome or other treatment-resistant forms of epilepsy. The medicinal product must be prepared with CBD that has been produced in compliance with GMP to a quality standard that, as a minimum, satisfies the requirements of monograph C-052 on cannabidiol of the current German Drug Codex DAC/NRF, and the preparation itself at the pharmacy level must comply with the GMP requirements of the current Pharmacopoea Helvetica (Ph Helv). Furthermore, the position papers of the Association of Cantonal Pharmacists regarding “Cannabis medicinal products” and “Formula medicinal products, manufacture and placing on the market” should be consulted in the current versions.

CBD sold as cosmetics

According to the Ordinance on Foodstuffs and Consumer Products (LGV), cosmetic products are broadly defined as “substances or preparations intended to come into external contact with certain parts of the human body, such as the skin, the hair system, the nails, the lips or external intimate regions, or with the teeth and the mucous membranes of the oral cavity, for the sole or predominant purpose of cleaning them, perfuming them, changing their appearance, protecting them, keeping them in good condition or influencing body odour” (unofficial translation).

Cosmetic products must be safe, and the safety of the individual ingredients must be documented in a safety report. References of any kind to disease-curing, disease-soothing or disease-preventing effects of cosmetics (eg, medicinal or therapeutic properties) are prohibited.

CBD has gained widespread popularity as an ingredient in cosmetic products in recent years (skin care oil, skin cream, lip care oil, mouthwash, toothpaste, bath capsules, mouth spray, dental gum, etc). The use of synthetic CBD is not specifically regulated and can be used in the formulation of cosmetic products if the requirements set forth in the LGV are met.

Regarding the use of naturally derived CBD in cosmetics – ie, CBD derived from the cannabis plant – the Implementation Guide provides as follows.

Article 54 (1) LGV refers to the list of substances prohibited in cosmetic products in Annex II of Regulation (EC) No 1223/2009 on Cosmetic Products, Entry No 306, which reads “Narcotics, natural and synthetic: All substances listed in Tables I and II of the single Convention on narcotic drugs signed in New York on 30 March 1961”.

Schedule I of the signed Single Convention on Narcotic Drugs of 1961 (the “Single Convention”) lists cannabis, cannabis resin, cannabis extracts and cannabis tinctures. According to the definition in Article 1 of the Single Convention, “cannabis” means “the flowering or fruiting tops of the cannabis plant (excluding the seeds and leaves when not accompanied by the tops) from which the resin has not been extracted, by whatever name they may be designated”. “Cannabis resin” is further defined in the Single Convention as “the separated resin, whether crude or purified, obtained from the cannabis plant”.

The Implementation Guide in its previous version went on to conclude that, therefore, cannabis resin obtained from any part of the cannabis plant may not be used to introduce CBD into cosmetics. Seeds and leaves not accompanied by the flowering or fruiting tops, however, may be used to produce cosmetics.

In a remarkable update, the latest version of the Implementation Guide finally corrects this previously held conclusion, clarifying that the Single Convention is not “self-executing” and that it is up to the signatories to the Single Convention to define how it should be implemented (no harmonised interpretation).

The Implementation Guide further notes that in Switzerland “the Single Convention is implemented accordingly in national narcotics legislation”. “Cannabis” is defined in Annex 1 of the BetmVV-EDI. The total THC content of at least 1.0% is decisive, regardless of whether CBD or other cannabinoids were extracted from the flowers or leaves of the hemp plant. For the production of CBD or other cannabinoids for use in cosmetic products, it does not matter which part of the hemp plant is used. The decisive factor is rather that none of the intermediate products has THC content of more than 1.0% during the entire manufacturing process.”

On 19 November 2020, the European Court of Justice (ECJ) concluded in its judgment C-663-/18 (the Kanavape case) that CBD extracted from the fruiting or flowering tops of the cannabis plant, and not only from the seeds and leaves, “is not a drug within the meaning of the Single Convention”. The ECJ clarified that “since CBD does not contain a psychoactive ingredient in the current state of scientific knowledge […] it would be contrary to the purpose and general spirit of the Single Convention to include it under the definition of ‘drugs’ within the meaning of that convention as a cannabis extract”. Swiss authorities have now adopted the same interpretation as in the Kanavape case, and further extended it to apply to all cannabinoids, if the THC content remains below 1%. This latest update in the Implementation Guide finally clarifies a long-contested issue regarding the use of cannabinoids in cosmetic products, and paves the way for easier market access. 

It is worthwhile to note that a recent decision by the High Court of the Canton of Fribourg confirmed that the ECJ’s findings in the Kanavape case need to be considered when interpreting EU Regulations, thus setting a precedent in Switzerland that CBD, regardless of how it was derived from the cannabis plant, does not constitute a prohibited narcotic and can, in general, be introduced into cosmetic products.

Lastly, the Implementation Guide mentions for the first time that “CBD and other cannabinoids, regardless of their origin, may only be used in cosmetic products if their safety to health has been scientifically proven in a safety assessment” in accordance with the LGV. CBD oils with a CBD content of up to 12% sold as cosmetic skin care oils and proper documentation (including a product information file containing toxicological data) have further been accepted by various cantonal enforcement agencies.

CBD sold as utility articles

CBD-containing liquids for e-cigarettes are classified as utility articles that come into contact with mucous membranes under the Federal Act on Foodstuffs and Utility Articles (the “Foodstuffs Act”, FSA) and under the LGV, and may be sold unless they release substances in quantities that pose a risk to health. It is further not permitted, in principle, to add CBD to liquids for e-cigarettes in pharmacologically effective doses.

However, this rule is superseded by the requirements of the Cassis De Dijon principle, according to which CBD-containing liquids may be sold in Switzerland if they have been lawfully placed on the market in an EEA or EU state. In addition, since the regulations on technical barriers to trade aim to prevent discrimination against domestic suppliers compared to internationally operating suppliers, CBD-containing liquids may currently be lawfully marketed in Switzerland (and, at the latest, after the new Tobacco Products Act enters into force in 2024).

Refill containers for e-cigarettes containing CBD are subject to the provisions of chemicals legislation. Distributors must carry out self-regulation and implement labelling and reporting obligations (product registration for chemicals).

On a side note, it may be added that paraphernalia and smoking accessories such as bongs, vaporisers and grinders (without CBD) may be sold without restriction if they comply with the FSA, the LGV and the PrSG.

CBD sold as tobacco substitutes

Hemp with a total THC content of less than 1% does not fall under the NarcA and can be sold as a tobacco substitute for smoking. Tobacco substitutes are a part of Swiss food legislation and are subject to the Tobacco Ordinance (TabV), independent of the Swiss Federal Tribunal’s decision that hemp containing CBD is not considered a tobacco substitute according to the Tobacco Tax Act (TStG).

Therefore, it is lawful to sell tobacco substitutes containing CBD or other cannabinoids as dried flower, buds or cigarettes/cigars, for example. However, existing food legislation must be observed, which includes the obligation to self-regulate and to notify the FOPH before placing products on the market.

According to the TabV, tobacco substitutes must satisfy the prerequisites applicable to the smoked tobacco products they replace (eg, herbal cigarette packaging must contain photographic warnings). The substitutes must not pose a direct or unexpected threat to health.

In 2024, the new Tobacco Products Act (TobPA) will enter into force. Under the TobPA, all tobacco-based and similar products (ie, with a similar purpose such as pouches) will therefore be regulated under the TobPA, and Swiss food law (according to the LMG, LGV, etc) will no longer apply to such products.

CBD sold as foodstuffs

The use of non-controlled cannabinoids in foodstuffs will be discussed in 3.2 Non-controlled Cannabinoids in Food, which also includes some comments on the consumption of THC.

Reform of Switzerland’s hemp seed legislation

As of 1 January 2021, all provisions of the seed legislation relating to the production and sale of hemp seed and seedlings, which includes cannabis with a THC content of below 1%, were repealed. Previously, only approved varieties of hemp grown for oil and fibre that were listed in the Federal Office of Agriculture’s (FOAG) varieties ordinance or the EU’s Common Catalogue of Varieties (which is still in force) could be placed on the market for commercial use in agriculture. This is a significant competitive advantage for Switzerland as an innovation hub for the development of hemp seeds and varieties compared to the EU.

For the agricultural production of hemp, the provisions of plant health legislation and direct payments legislation must be respected; for the use of hemp as animal feed, the provisions of the Animal Feed Law must be observed.

Switzerland is a federal state, which means that powers are divided between the Confederation, the cantons and the communes, according to the principle of subsidiarity. The Confederation, in principle, only undertakes tasks that the cantons are unable to perform, or which are expressly allocated to the Confederation by the Federal Constitution.

As discussed in 1.1 Primary Laws & Regulations, regulations affecting the cannabis market span a very wide spectrum of the law. It would go beyond the scope of this guide to describe the authorities responsible for enforcement on both a federal and cantonal level for each area of law. However, a short overview will be provided of the enforcement authorities for the laws related to narcotics, therapeutic products, foodstuffs and utility articles (which include cosmetics), and chemicals. 

Enforcement of the NarcA

As a result of Switzerland’s federal political system, the cantonal law enforcement agencies (ie, the public prosecutor’s office) are principally charged with enforcing the NarcA, with the help of the police.

The clear statement of the law that the enforcement of the NarcA lies within the competence of the cantonal law enforcement agencies was relativised by the fact that it had always been assumed that the narcotics sector was subject to special supervision by the Confederation. Consequently, the Office of the Attorney General of Switzerland could, under certain circumstances, order investigations itself if the criminal acts were committed, in whole or in part, abroad or in several cantons. This competence continues to exist. Thus, there is a parallel investigative competence of the Confederation in this area.

The Confederation exercises oversight over the implementation of the NarcA. It conducts controls at the border (importation, transit and exportation) and in customs warehouses and bonded warehouses. The Confederation and the cantons work together to fulfil their tasks under the NarcA and co-ordinate their work; they may call on the assistance of other organisations concerned.

Non-compliance with the NarcA is a criminal offence. Under the NarcA, any person who without authorisation (among others) cultivates, produces, stores, sends, transports, imports, exports or carries in transit narcotic substances, or possesses, keeps, buys, acquires or otherwise obtains narcotic substances, is liable to a custodial sentence not exceeding three years or to a monetary penalty.

As mentioned in 1.1 Primary Laws & Regulations, medicinal cannabis products with a THC content of 1% and above may be prescribed with a special authorisation by the FOPH, which develops Switzerland’s health policy and works to ensure that the country has an efficient and affordable healthcare system in the long-term.

Enforcement of the TPA

Swissmedic is responsible for the duties assigned to it by the TPA. It is involved in the entire life cycle of a medicinal product through its duties in the areas of authorisation, approval and monitoring of medicinal products. Swissmedic is run by the Confederation with the co-operation of the cantons, as an institution under public law with its own legal personality.

It is important to note that Swissmedic’s areas of responsibility are closely related to those of other authorities or implementing bodies – for example, regarding the delimitation between medicinal products and cosmetics or between medicinal products and foods, where the FOPH and the Federal Food Safety and Veterinary Office (FSVO) are involved, all areas relevant for the emerging cannabis market.

Furthermore, Swissmedic has, among others, the competence to authorise ready-to-use medicinal cannabis products and to grant a licence for imports of therapeutic products (including medicinal cannabis) if the applicant complies with the requirements of the Medicinal Products Licensing Ordinance.

In simplified terms and on a cantonal level, the Cantonal Office for the Control of Therapeutic Products (Kantonale Heilmittelbehörde) in Zurich, for instance, is divided into three operative units: the inspectorate, the laboratory and the administration. The Kantonale Heilmittelbehörde in Zurich is responsible for:

  • the control of the production, wholesale trading and dispensing of therapeutic products;
  • the market surveillance of therapeutic products (which includes marketability reviews and conformity tests in accordance with recognised pharmacopeias);
  • the granting of cantonal licences for the dispensing of medicinal products (pharmacies, drugstores, etc);
  • the issuance of professional and narcotic licences; and
  • other tasks.

The cantonal pharmacy is mandated to secure a high quality and economical supply of therapeutic products to hospitals, a wide range of institutes and the general population. In the Canton of Zurich, the cantonal pharmacy is also responsible for the production of a wide range of pharmaceutical products. Other cantons have similar structures.

In terms of enforcement, non-compliance with the TPA may lead to a series of administrative (including disciplinary) and penal actions on both the federal and cantonal level.

Enforcement of the FSA

According to the LGV, business operators who manufacture, process, treat, distribute, import or export food, food additives or utility articles must exercise self-control and designate a responsible person who appropriately documents compliance with the requirements of the FSA/LGV. This includes the obligation to secure good manufacturing procedures, the implementation of quality management systems and the obligation to withdraw or recall unsafe food, if applicable.

On its website, the Swiss Association of Cantonal Chemists (ACCS) has published a useful list of local law enforcement authorities for food and utility articles in Switzerland. In Zurich, for example, the Cantonal Laboratory is responsible for the implementation of food safety regulation, including the control of reporting and permitting obligations, as well as the implementation of special protective regulations of non-food or utility articles such as cosmetics.

Authorities charged with the implementation of the FSA and its many ordinances have a wide range of administrative measures that they can impose on non-compliant market participants.

While numerous organisations act as self-regulatory bodies for the cannabis industry in Switzerland, three groups in particular stand out.

Interest Group Hemp (IG Hanf)

Interest Group Hemp (IG Hanf) is an association representing the Swiss hemp industry and its members in politics, before authorities and in public. It is by far the largest interest group of market participants in the cannabis industry in the country. The association’s goal is to promote exchange and co-operation among its members and to thus strengthen the hemp industry in Switzerland. Its mission is to establish cannabis in society in a sustainable manner, and to create a regulated cannabis market in order to ensure that Switzerland plays a leading role in the global cannabis industry.

To secure quality control among its members, IG Hanf established the quality label “Swiss Certified Cannabis”. The label guarantees products and consumer safety, and determines quality standards (in accordance with ISO 9001). Specifically, the goals of the label as stipulated in the guidelines of Swiss Certified Cannabis are:

  • to guarantee absolute traceability throughout the production chain;
  • to ensure highest security for consumers and customers;
  • to build trust with consumers, customers and authorities; and
  • to protect against economic damage or loss of reputation.

The Swiss Certified Cannabis label can only be used by certified companies. The application process includes:

  • training by a qualified auditor;
  • a certification audit on-site by an independent and qualified auditor; and
  • a decision on the granting of the certificate based on the audit report by the board of directors of IG Hanf.

The guidelines of Swiss Certified Cannabis set standards on quality policy, production, packaging, storage, safety, control, work safety and hygiene, labour, environment and infrastructure.

The Swiss Society of Cannabis in Medicine

The Swiss Society of Cannabis in Medicine’s (SGCM-SSCM) goal is to promote the acceptance of cannabis as a therapeutic product, its legal regulation, and its clinical implementation in close co-operation with the FOPH. As an umbrella organisation for professionals from medicine, pharmacy, pharmacology, research and industry, its declared goal is to foster the scientific, rational and destigmatised use of medicinal cannabis as well as simplified, unbureaucratic access to therapies with medicinal cannabis.

Its task is to serve as the Swiss interdisciplinary knowledge and information platform for the medical use of cannabis and cannabinoids, and as a networking platform for a wide range of professionals, care-givers, interest groups, etc. The organisation further promotes basic and clinical research, and collects valuable data, based on which it elaborates medical recommendations for the most relevant treatment principles. SGCM-SSCM is the Swiss ambassador of the International Association for Cannabinoid Medicines (IACM).

Medcan

Medcan advocates the interests of patients in Switzerland who take cannabis as a medicine, and provides information on the use and effects of the medicinal plant. The association pursues the goal of ensuring that patients in Switzerland have legal access to cannabis without a great deal of bureaucracy, and that they can use it medically in tested quality and at reasonable prices. Moreover, it demands from the FOPH the further education of physicians regarding possible indications and dosages, and minimisation of the bureaucratic effort involved for obtaining medicinal cannabis. Medcan advocates on both a political and public level for people who use cannabis for medical purposes.

The cannabis market faces tremendous challenges, such as inconsistent cannabis and cannabinoids terminology, significant differences in enforcement between cantons and a constantly changing regulatory environment.

The most obvious challenge faced by market participants is that cannabis is considered a narcotic drug if the THC content exceeds 1%. Consequently, all efforts by market participants to legally bring products to market are biased by the default assumption that cannabis is an illicit drug. This negative bias leads to heightened scrutiny by enforcement agencies and is not particularly conducive to the success of an emerging new industry.

Some of the most challenging aspects of the cannabis market come to the surface where various areas of the law overlap. The development of a new product can be very challenging when it is unclear, for example, whether it is governed by therapeutics or cosmetics law. A chewing gum containing CBD could be many things – for example, a therapeutic product, a cosmetic product or a foodstuff. Defining the product category and abiding by all regulatory requirements, while considering pertinent case law, can only be managed with a detailed technical and legal assessment.

Reference can be made to two very useful guides that can help, to some extent, in navigating these complexities:

  • the guide on “Demarcation criteria therapeutic products – foodstuffs with regard to products to be taken orally”, published jointly by Swissmedic and the FSVO; and
  • the guide on “Criteria for the demarcation of cosmetic products from therapeutic products and biocidal products”, jointly issued by Swissmedic, the FOPH and the FSVO.

Another main challenge in the CBD market is the classification of cannabis extracts or tinctures (CBD oils). They can be qualified as raw materials or as ready-to-use products. While in practice, a lot of consumers ingest CBD oils, such oils cannot be marketed as foodstuff or nutritional supplements without authorisation of their components as novel food by the FSVO or the European Commission (EC). No company in Switzerland, or in the EU, has obtained such authorisation to date. Meanwhile, CBD oils have gained wide popularity as cosmetic skin care or as oral care (mouth spray) products.

Further challenges for participants in the medical cannabis industry are described in the accompanying Trends and Developments article here.

The above examples of key challenges do not touch on the many complexities surrounding international trade of medicinal and recreational cannabis products, and on the whole range of other issues and uncertainties that participants in the cannabis market must deal with.

Companies and individuals in the cannabis market must navigate a complex web of interrelated, constantly changing areas of law. Non-compliance with existing laws and regulations may lead to indictments for criminal offences, to administrative penalties and potentially to civil damage claims.

Recent enforcement measures by authorities included, for example, the shutdown of a retailer’s website for publishing health claims in connection with CBD products, and the imposition of a marketing ban for specific CBD oils.

However, special attention must be paid to compliance with the NarcA. Cannabis resin is illegal, independent of its THC content. Furthermore, depending on the classification of the product placed on the market, cannabis products with a total THC content of below 1% must meet the specific requirements of (among others):

  • the Therapeutic Products Act;
  • the Foodstuffs Act;
  • the Ordinance on Foodstuffs and Utility Articles;
  • the Chemicals Ordinance; and
  • the Tobacco Ordinance.

It should be noted that, in addition to the NarcA, other acts such as the TPA also provide for penal provisions.

Level of Regulation

Cannabis-specific regulations in Switzerland are, with few exceptions, limited to narcotics and criminal law. Legal uncertainty is still prevalent in production, trade and consumption of cannabis products of all kinds (cosmetics, foodstuffs, medicines, recreational use), as is inconsistent cantonal enforcement.

In other jurisdictions – such as in many US states where medical and recreational cannabis has been legalised – the cannabis market is meticulously regulated. Other countries are following suit with various regulatory models (eg, Canada, Uruguay).

Considering these developments, a revision of Switzerland’s approach to cannabis regulation appears warranted, as was proposed in a postulate submitted to the Council of States on 18 March 2021 by Thomas Minder, a member of the Council of States. Specific cannabis-related legislation could bring legal certainty throughout the value chain and secure efficient quality control measures. An allocated taxation of cannabis products could generate state revenues and secure the financing of already necessary prevention and health measures, particularly for the protection of youth.

At the same time, cannabis legislation concerning THC limits in Switzerland is considered rather progressive compared to the EU and the USA, where the threshold from legal cannabis (or hemp in the USA) to a narcotic drug (which in some US states is legalised) is passed when the THC levels surpass 0.2% or 0.3%, respectively. Also, the Ordinance on the Maximum Levels of Contaminants (VHK) allows for significantly higher values of THC intake from food than the THC values in the EU. Switzerland has further repealed all provisions of the seed legislation relating to the production and sale of hemp seed and seedlings, and is no longer bound by the EU’s Common Catalogue of Varieties. 

In view of the latest developments in legislative reform of the NarcA regarding medicinal cannabis, as well as cannabis trials for recreational purposes, Switzerland is well positioned to further expand its regulatory edge in the emerging European cannabis industry. 

Please refer to 1.4 Challenges for Market Participants and 1.5 Legal Risks.

In Switzerland, only cannabis with a THC content of below 1% can be exported. The cannabis legislation of the importing country must therefore be complied with. Generally, in the EU, cannabis-products with a THC content of 0.3% and above are considered narcotic drugs and thus cannot be imported, except for medical purposes with a special permit from local authorities.

Since the revision of the NarcA in August 2022, medical cannabis independent of its THC content can be traded cross-border under an authorisation process by Swissmedic. Further details can be found in the accompanying Trends and Developments article here.

Importers of cannabis products with a THC content of 1% and below must be able to provide proof in the form of a batch-specific analytical certificate for the delivery in question, issued by a laboratory accredited to ISO/IEC 17025 or by a GMP laboratory.

The main elements affecting medical cannabis in Switzerland are described in the accompanying Trends and Developments article here, along with an overview of impending changes to the current regulatory framework.

The FSA sets forth the rules on the safety and transparency of foodstuffs and utility articles. According to the FSA, foodstuffs are all substances or products that are intended (or may reasonably be expected) to be consumed by human beings in a processed, partly processed or unprocessed state. Medical products, narcotics and psychotropic substances do not fall under the definition of foodstuffs, or vice versa.

Except for a few reservations (eg, novel foods), non-described foods without an authorisation can be placed on the market, provided they meet all the requirements of food law.

Under certain circumstances (described below), cannabis products may also be used in foodstuffs. The main principle in foodstuffs law is that foodstuffs must be safe – in other words, they must neither be harmful to health nor unsuitable for human consumption.

Novel Foods

For foodstuffs that have not been used for human consumption to any significant extent, either in Switzerland or in an EU member state before 15 May 1997 (so-called novel foods), an authorisation by the Federal FSVO or an approval by the European Commission (EC) is required. This applies to extracts of Cannabis sativa L that contain cannabinoids such as cannabidiol (CBD) and food products enriched with extracts of Cannabis sativa L or with cannabinoids such as CBD (eg, hemp seed oil with added CBD, food supplements with CBD), which are classified as novel foods and therefore require an authorisation.

Products of Cannabis sativa L or parts of plants that had a safe and documented significant use as food in the EU before 15 May 1997 are not considered novel foods in Switzerland, provided they originate from an approved plant of Cannabis sativa L. This is particularly the case for hemp seeds, hemp seed oil, hemp seed flour and defatted hemp seeds.

Furthermore, in Switzerland, herbal tea made from leaves of the hemp plant Cannabis sativa L is also not considered a novel food. However, the production, importation or market placement of herbal teas obtained from the herb of the cannabis plant is possible if one furnishes proof that the herbal tea was already consumed as a foodstuff to a significant degree prior to 15 May 1997 and is therefore not classified as a novel food. Novel foods that do not require an authorisation are listed in the FDHA Ordinance on Novel Foods.

Authorisation

As part of the authorisation procedure for novel foods, the FSVO examines whether the product is safe and not deceptive. The basic prerequisite for approval is that the product is classified as a foodstuff and is not covered by the legislation on medicinal products. In the case of foodstuffs containing cannabis, the Ordinance on the Maximum Levels of Contaminants (VHK) is relevant. It regulates the maximum permissible levels of delta-9-tetrahydrocannabinol in foodstuffs (which are generally higher than in the EU).

It is important to note that all foods which, in accordance with the Novel Food Regulations (EC) No 258/97 and (EU) 2015/2283, may be placed on the market in the EU are fundamentally also marketable in Switzerland (except for genetically modified foods). Placing foodstuff with CBD on the European market presupposes the application for authorisation to the European Commission. If the application is granted, foodstuff containing CBD can also be placed on the Swiss market. Hence, the authorisation from the European Commission entails the advantage that the foodstuff can be placed on both the European and the Swiss markets. However, the reverse situation does not apply. Foodstuffs that are not novel foods in Switzerland, or that have been authorised as such in Switzerland and are classified as a novel food in the EU, require an authorisation from the European Commission for market placement in the EU.

Lastly, authorisations are generally not issued for composite foods. The authorisation requirement always relates to a substance, not to a composite product containing a novel food as an ingredient.

The EIHA Consortium

The European Industrial Hemp Association (EIHA) is Europe’s largest association representing the common interests of hemp farmers, producers and traders working with hemp fibres, shives, seeds, leaves and cannabinoids.

In 2019, EIHA created a Novel Food Consortium with the aim of submitting a joint novel food application both to the UK Food Safety Authority for the British market and to the European Food Safety Authority (EFSA) for the EU market (which, as mentioned previously, would include Switzerland), the costs of which are shared among its members. It is estimated that the consortium will invest up to EUR3.5 million for financing all relevant and unprecedented toxicological studies on CBD and THC with the help of a qualified service provider (ChemSafe).

A whole range of cannabinoid-containing ingredients have already been tested to ensure that all food products using these ingredients will be covered by the joint application. For the purpose of the application, a corporation under German law was founded (EIHA projects GmbH), which collects special contributions to finance the project and ultimately acquires the rights for the distribution of the approved products. EIHA projects GmbH will manage these rights and transfer them to EIHA members, with an established sublicensing system for white label (retail) trading companies. 

Swiss companies aspiring to develop and bring cannabis-based food products to market are advised to evaluate a participation in the EIHA Consortium.

EFSA has already conducted preliminary assessments on applications forwarded by the EU Commission, and its experts panel identified numerous gaps in the data on the health effects associated with the consumption of CBD. Until these data gaps have been closed by the applicants, the assessment of CBD as a novel food is currently suspended in the EU. There are safety concerns in Switzerland too, and the safety of CBD or other cannabinoids as a foodstuff cannot be conclusively assessed at present due to data gaps.

The latest developments regarding a potential legalisation of cannabis use for recreational purposes can be found in the adjacent Trends and Developments article here.

MME Legal | Tax | Compliance

Zollstrasse 62
PO Box
8031 Zurich
Switzerland

+41 44 254 99 66

daniel.haymann@mme.com www.mme.ch/en/
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Trends and Developments


Author



MME Legal | Tax | Compliance is an innovative and fast-growing Swiss firm that offers integrated professional advisory and litigation services in all fields of legal, tax and compliance. MME supports and represents both companies and individuals in business and economic-related private matters. Many of MME’s partners are nationally and internationally recognised as leading experts in their areas of practice, and together with their teams provide made-to-measure advice and practical, cost-effective and down-to-earth solutions for improving their clients’ businesses or resolving their private economic challenges. MME’s clients recognise the firm particularly for its lean organisational structure, its co-operative hands-on approach and its cost-effective workflow. They and MME’s peers consider the firm an innovation pioneer which consistently operates at the cutting edge of the industry and the relevant fields of business. With its open-door, hierarchy-free company culture and its consistent innovation policy, MME has also become one of the most attractive employer brands in its field in the Greater Zurich Area, and attracts a considerable number of young high-potential associates and consultants.

Introduction

The current regulatory environment surrounding cannabinoid-based products in Switzerland is still marked by a high degree of uncertainty, due both to vague legislative requirements and to heterogenous, sometimes arbitrary, enforcement. However, with the rise in public awareness of the general benefits of the cannabis plant as a result of the cannabidiol (CBD) boom, as well as the increasing use of a whole range of other cannabinoids during the last few years (and growing anecdotal evidence from liberalised recreational markets such as Canada, Uruguay and certain US states), recent legislative developments present an opportunity for Switzerland to establish itself as a role model for an innovative, pragmatic, safe and comprehensively regulated cannabis market.

Medical Cannabis Reform

The status quo

A study conducted by the Institute for Addiction and Health Research on behalf of the Federal Office of Public Health (FOPH), the findings of which were published in February 2020, concluded that for over 96% of the questioned participants the consumption of medical cannabis has led to an improvement of their symptoms. Half the participants reported an “extreme improvement”. A large number of the participants who already had prescriptions for cannabinoid-based medicines reported that they were able to either completely abandon other prescribed drugs or at least strongly reduce their consumption.

Around 3,000 to 4,000 patients are legally prescribed medical cannabis in Switzerland today. The FOPH estimates that over 110,000 patients consume “medical” cannabis illegally – that is, sourced from the illicit market – which exposes them to significant health risks due to the lack of quality control and a growing number of cut and contaminated products in circulation. This number does not include the number of recreational cannabis consumers, which is, by a conservative estimate, three times the FOPH figure.

Since 1 August 2022, cannabis with a tetrahydrocannabinol (THC) content of 1% and above is no longer considered a prohibited narcotic if it is used for medical purposes. The adopted amendment to the law facilitates access to cannabis medicines for thousands of patients as part of their treatment. This affects cases of cancer, multiple sclerosis and many other indications where cannabis-containing medicines can alleviate chronic pain.

As the currently most-researched cannabinoid, THC is predominantly used for chronic pain conditions, spasticity and spasms, as well for nausea and loss of appetite (mostly in the context of chemotherapy). Ready-to-use medicinal products may only be marketed in Switzerland if they are approved by Swissmedic, the Swiss Agency for Therapeutic Products.

At present, in Switzerland, only two ready-to-use medicinal products based on cannabis have been approved by Swissmedic – one of which is Sativex, with a THC content of above 1%. Sativex can be prescribed without a special permit for spastic convulsions in multiple sclerosis patients. For any other indication, an exception permit by the FOPH must be obtained (ie, for “off-label use”).

The second medicinal product is Epidyolex, a CBD-based drug that was approved by Swissmedic on 10 February 2021. Epidyolex contains the active substance cannabidiol, which can be used for the treatment of seizures (epilepsy). Epidyolex is an oral solution, and is used in combination with other medicines in patients aged two years and older with Lennox-Gastaut syndrome or Dravet syndrome; both syndromes are rare diseases associated with seizures and fits (epilepsy).

If an approved preparation is unsuitable, physicians can prescribe cannabis as a drug that is exempt from approval by Swissmedic. The drug is then usually produced by a pharmacy on a doctor’s prescription as a so-called “extemporaneous preparation” – ie, a “formula magistralis” – which is how most cannabis is prescribed in Switzerland today.

The amendment to the Narcotics Act

The main features of the legislative amendment to the Narcotics Act (NarcA) were as follows.

  • The ban on marketability of medical cannabis was lifted. Medical cannabis was reclassified as a controlled narcotic with restricted marketability. Cultivation, processing, production and trade are now subject to the authorisation and control system of Swissmedic, in the same way as other narcotics that are used in a medical context (eg, morphine).
  • A special permit by the FOPH is no longer required to prescribe medical cannabis. In other words, every doctor in Switzerland is able to prescribe medical cannabis.
  • For the first few years after the coming into force of the amendment in August 2022, doctors must regularly report a whole range of data to the FOPH regarding the relevant therapies. The data collection should serve as a basis for the scientific evaluation of the revision, and as guidance for the responsible cantonal enforcement authorities and prescribing physicians. Note that failure to report such data is not penalised, which weakens its purpose and effect.
  • Commercial exports of medical cannabis have been made possible.

Apart from the NarcA, executive ordinances have also been amended, and a two-tiered licensing system with Swissmedic has been introduced for cultivation of medical cannabis.

Reimbursement by compulsory health insurance

Unfortunately, treatment with medical cannabis products is not covered by the compulsory health insurance (OKP) due to insufficient scientific evidence regarding the efficacy and cost-effectiveness of these medicines, especially for extemporaneous preparations. Such medicines are reimbursed by the health insurance providers in consultation with the physician on an exception basis only.

The major challenge regarding the adopted amendment is that the law does not envisage adjusting the current requirements for reimbursement by the OKP. According to Medcan, Switzerland’s largest medical cannabis patients’ association, the costs of treatment with medical cannabis can range from CHF450 to over CHF10,000 per month.

A Health Technology Assessment (HTA) report published on 30 April 2021, on behalf of the FOPH, was prepared to clarify the scientific evidence regarding the efficacy and cost-effectiveness of medical cannabis products and to differentiate between the various patient groups. Unfortunately, the HTA ultimately decided that the efficacy data on medical cannabis use for chronic pain and spasticity was inconsistent (ie, studies with comparable patient populations and similar types of medical cannabis did not show consistent results pointing in the same direction) and inconclusive (ie, none of the studies was able to draw a definitive conclusion on the efficacy of medical cannabis). As a result, the WZW criteria for medical cannabis have not been confirmed, which leaves the issue of reimbursement by healthcare insurance unresolved. 

Commercial opportunities

The amendment to the NarcA presents entrepreneurs with a range of new and exciting commercial opportunities, such as:

  • cultivation of medical cannabis in Switzerland (with the required permits by Swissmedic);
  • further research into new plant varieties and traits, as well as cannabinoid development;
  • innovative research and development of cannabinoid-based drugs;
  • development of new delivery methods, including vaporisers, dry powder inhalers, slow-release tablets, etc;
  • establishment of a cross-border medical cannabis marketplace with a surge in imports as well as exports;
  • development of software tools for quality assurance, seed-to-sale traceability solutions and documentation standards (GACP, GMP, etc);
  • acquisition of pharmacies and development of specialised know-how in the field of medical cannabis; and
  • education platforms for physicians, patients and the general public.

Many more opportunities will arise in this growing and fast-moving industry. The success of the adopted amendment – the purpose of which is, first and foremost, facilitated access to medical cannabis for patients – will hinge on whether these patients are able to obtain reliable, quality-controlled, safe, affordable and ideally reimbursed medical cannabis products.

Cannabis Legalisation: Recreational Pilot Trials

Cannabis is the most frequently consumed illegal substance in Switzerland. According to the FOPH, more than a third of the population aged 15 and over in Switzerland has tried cannabis at some point in their lives. In 2017, 7.7% of Swiss people aged 15 to 64 had used cannabis. 

Repression has never been effective in curbing cannabis consumption or in eliminating the illicit market. Legislators in Switzerland arrived at the conclusion that alternative regulatory options must be examined. At its meeting on 31 March 2021, the Federal Council adopted the Ordinance on Pilot Trials as per the NarcA, which sets out a detailed framework for the dispensing of cannabis products for non-medical use. On 15 May 2021, the amendment to the NarcA came into effect. It now allows pilot testing of the controlled dispensing of cannabis for recreational purposes.

The amendment to the NarcA, which will remain in effect for ten years (ie, until 14 May 2031), provides the legal basis for the implementation of local and time-limited scientific pilot trials with cannabis. The pilot trials allow consumers to legally purchase a wide range of cannabis-based products. The cannabis offered must meet high quality standards, with strict seed-to-sale transparency, and must originate from organic cultivation.

The aim of the studies is to expand knowledge on the advantages and disadvantages of controlled access to cannabis. They should facilitate the examination and documentation of the consequences on health and consumption habits of users in a scientific framework, and provide data on the effects on the local illicit drug market, as well as on the protection of minors and public safety.

In more detail, the pilot trials must meet the following main requirements.

  • Pilot trials are limited in time (five years, with an option to extend by another two years), location (one or several municipalities) and number of participants (maximum 5,000 participants per trial).
  • Cannabis supplied to the pilot trials has to originate in Switzerland, be in line with the Guideline on Good Agricultural and Collection Practice (GACP) of the European Medicines Agency (EMA), and in principle be organically produced according to the Organic Farming Ordinance of 22 September 1997; only outdoor or greenhouse production that is soil-bound is permitted (ie, indoor-grown cannabis is excluded).
  • Regarding product quality, the total THC content may not exceed 20%; in products for oral intake, the THC content may not exceed 10 mg per serving. Cannabis products must not contain levels of contaminants that give rise to health concerns, and must be limited to specified amounts of foreign components, microbial contaminants, mycotoxins, heavy metals, pesticides and solvent residues from extraction. Notably, the maximum levels of delta-9-THC content, as per Annex 6 of the Contaminants Ordinance of 16 December 2016, do not apply to edibles.
  • Cannabis products must abide by a whole set of safe packaging and labelling requirements.
  • Advertising for cannabis products remains prohibited.
  • Minors under the age of 18 are excluded from the pilot trials, and participants must already be consumers of cannabis products.
  • The maximum amount of dispensed cannabis per participant per month may not exceed 10 g of total THC.
  • Cannabis products may only be dispensed at points of sale with trained staff and adequate infrastructure, and at a price that is in line with the illicit market. Distribution can be organised through pharmacies, cannabis social clubs and non-profit stores, as well as via other distribution channels. This will allow for a comparison of the different distribution systems and show which regulatory models are accepted by consumers.
  • Both public and private organisations can apply to the FOPH to conduct cannabis trials.
  • Outside the pilot trials, the existing cannabis prohibition with the associated penal provisions for violations of the law will continue to apply.

A long list of further requirements is detailed in the Ordinance on Pilot Trials as per the NarcA of 31 March 2021.

While the implementation of the first pilot trials has been positively received by the cannabis industry and is recognised as an important further step towards controlled liberalisation, the quality requirements for the cannabis products to be used in the trials still pose some challenges.

Various pilot trials have already been authorised and successfully launched. They are listed on a dedicated website of the FOPH. The purposes of these trials are diverse.

  • In Lausanne, the Cann-L project intends to assess the feasibility and the potential impact of a model for regulating the consumption of cannabis through its sale on a non-profit basis.
  • In the Canton of Basel-Stadt, the WeedCare pilot studies the regulated sale of cannabis in pharmacies and its public health impact.
  • La Cannabinothèque trial examines whether regulated access to cannabis may improve knowledge of the substance and its associated issues, and thus reduce the health and social risks that drug consumption usually entails.
  • ZüriCan in Zurich investigates the extent to which regulated sale, supplemented by advice, can enhance both knowledge and behaviour in respect of the lower-risk forms of cannabis, and whether this can be implemented.
  • SCRIPT, a pilot trial in Berne, Bienne and Lucerne, tries to evaluate what impact a regulated not-for-profit sale of cannabis in pharmacies combined with related advisory services may have on cannabis consumption.
  • Grashaus Projects BL, in Basel-Country, examines whether the structured, controlled sale of cannabis can bring about a change in consumption and a higher quality of life.
  • The Cannabis Research Zürich trial in the canton of Zurich aims to investigate the social and economic consequences of legalising recreational cannabis use in Switzerland.

First results from the WeedCare trial in Basel-City were presented by the local health authorities on 25 March 2024. While satisfaction with the pharmacy as a source of supply (94%) was reported as very high, satisfaction with the product range (57%) and quality (69%) was significantly lower. 67% of participants requested other products in addition to the available flower and hash products. 70% of participants requested so-called edibles (gummy bears, chocolates, etc), 59% requested THC oil and 43% requested e-liquids.

In addition, some of the participants also requested stronger products with a THC content above the maximum threshold of 20% that is allowed in the pilot trials. This explains why almost half the participants also consumed cannabis from illegal sources in addition to the study cannabis.

Commercial opportunities

The high bar set regarding the application process, cultivation, production, distribution and data-gathering of recreational cannabis products in the context of the trials, as well as the illicit-market pricing ceiling, certainly limits the profitability of running a pilot trial and adds considerable cost to the value chain. At the point of sale, which can be a social club, a pharmacy or a dispensary, the sales price must cover costs and leave no profit margin. However, upstream margin opportunities present themselves to cultivators, manufacturers of specialised products such as edibles or vaporisers, and distributors, with some being able to secure their sales prices in long-term offtake agreements. The FOPH regularly receives additional applications for new pilot trials. Trials that incorporate the above-mentioned initial feedback from the WeedCare project, provide a wide product range and reliably supply high quality products will be successful and will secure reasonable returns for producers, manufacturers of specialised products, and distributors.

The pilot trials are a first and important step towards a trend in further liberalisation of the recreational cannabis market. The trials are usually announced with considerable media fanfare and are publicised in most mainstream media. First experiences by the public and the authorities have been rather well received and have not led to wide-ranging criticism. Companies with a reliable, quality-controlled supply chain may be well positioned to use the pilot trials to establish brand equity, create innovative new products and gather valuable experiences in a new and developing market.

Further Political Developments

Parliamentary initiative: Siegenthaler

On 25 September 2020, Heinz Siegenthaler, a member of the Swiss National Council, filed a parliamentary initiative which was signed by a total of 40 members of the Swiss National Council, in an attempt to force a new and comprehensive regulation for the cultivation, production, trade and consumption of cannabis containing THC in line with the recommendations of the Federal Commission on Narcotic Drugs (EKSF). The main objectives of the initiative were:

  • the control of production and trade by governmental bodies;
  • the separation of the medical and non-medical markets;
  • the drying up of the illicit market by lifting the prohibition;
  • the regulation of taxation and advertising; and
  • cultivation for personal use.

The reasoning accompanying the original text of the initiative describes a general moral and legal inconsistency in cannabis prohibition, based on current scientific research, especially when contrasted with other harmful substances such as tobacco and alcohol. The Federal Council, in a statement made on 23 May 2018, candidly admitted that the NarcA had failed to fulfil its purpose of protecting the population, considering the more than 300,000 regular cannabis consumers in Switzerland. A flourishing illicit market, the lack of quality controls and effective protection of youth and reliable information, as well as a growing risk of “cut” cannabis products containing artificial and toxic substances, warranted the replacement of the current prohibition with a fully regulated cannabis market that meets the requirements of Swiss addiction policy, according to the initiative.

On 28 April 2021, Switzerland’s Health Commission of the National Council voted in favour of a controlled legalisation of cannabis. This was the first important political hurdle the Siegenthaler parliamentary initiative had passed. On 19 October 2021, the equivalent commission in the Council of States followed suit, with an overwhelming majority of nine to two, and gave the Health Commission of the National Council the green light to prepare draft legislation as proposed by the initiative. The initial deadline to present draft legislation for a controlled legalisation of cannabis was extended by two years to the National Council’s autumn session of 2025.

In the meantime, the Commission is considering in its deliberations the conclusions of the report in the Minder postulate, as set out below, closely eyeing the results from the pilot trials and monitoring the developments in Germany, where cannabis was partially legalised on 1 April 2024.

Postulate: Minder

On 18 March 2021, Thomas Minder, a member of the Swiss Council of States, filed a postulate mandating the Federal Council to evaluate in a report how the various forms of cannabis could be made more economically usable, and how a contemporary and comprehensive cannabis regulation could be enacted (including health, food, cosmetics, medicinal products, reasonable thresholds for driving, tobacco products and customs regulations). The goal would be to achieve more legal certainty and a more uniform enforcement throughout Switzerland regarding the production, trade and use of cannabis products. In doing so, the experience of other countries (such as the USA or Canada, which have liberalised the use of cannabis) ought to be considered.

According to the text of the postulate, there is still a great deal of legal uncertainty in the areas of production, trade and consumption of hemp products of all kinds (cosmetics, foodstuffs, medicines, recreational use), as well as extremely inconsistent cantonal enforcement and even arbitrariness.

The postulate refers to the findings in a comprehensive report issued by the Federal Commission on Narcotic Drugs (EKSF) in 2019, according to which a revision of the NarcA regarding cannabis is warranted, as is a general reorganisation of the approach towards cannabis. The EKSF highlights familiar argumentation, such as the assumption that market control with a regulated supply chain is likely to reduce health risks for consumers, and that taxation would unlock much-needed capital to increase preventative measures in vulnerable populations (eg, minors and persons under guardianship).

The text concludes that it is the right time for a political discussion on a comprehensive cannabis reform, also in view of the significant economic potential of hemp in general. On 17 June 2021, the Council of States concurred with this view, and passed the motion.

On 1 November 2023, the Federal Council presented its findings in a comprehensive report, acknowledging the requirement to regulate cannabis for recreational purposes in a new specialised law. New legislation should be evidenced-based and in the best interest of public health. Furthermore, it is recognised that a new law would be a great opportunity to reduce the negative effects of cannabis prohibition on consumers and society, as well as to harness the social, health and economic benefits of a legalised cannabis market.

The Federal Council summarised its findings with a list of recommendations for a legalisation framework, a few of which are as follows.

  • Start with a strictly limited, low-risk regulation that can be expanded and relaxed at a later date if necessary (eg, additional products or a more liberal market regulation).
  • Refrain from a profit-oriented retail trade and excessive commercialisation of cannabis.
  • Access to cannabis should be restricted to adults, and strict measures should be taken to protect minors.
  • As proven measures of structural prevention, adopt high incentive levies or incentive taxes on cannabis products (depending on the THC content and the health risk of the products), a comprehensive ban on advertising and promotion, clear restrictions on availability (opening hours, sales outlet density) and warnings on product packaging. The report reasonably specifies that the final sales price, including taxes, must not be so high that the illicit market remains attractive.
  • To protect third parties, introduce passive smoking protection rules (similar to those for tobacco) and strict measures for traffic safety.
  • To protect consumers, set product safety standards, contaminant limits and declaration requirements for ingredients.
  • Provide for the monitoring of indicators on the effects of the new law and evaluate them regularly in the first few years.

The latest political developments surrounding cannabis legislation are proof that the urgent need to comprehensively regulate this growing market has manifested itself in the general public’s consciousness. The limited view of cannabis as an allegedly harmful narcotic drug, and the stigmatisation of its consumers, is making way for the recognition of its significant medical potential as well as the promising economic growth it could generate in terms of recreational and industrial use.

With an already progressive regulatory framework regarding THC thresholds compared to the rest of Europe, the implementation of pilot trials and the liberalisation of cannabis for medical purposes, Switzerland is in an excellent position to expand its leading role in Europe as an innovative, responsible and attractive hub for cannabis entrepreneurs all along the value chain.

MME Legal | Tax | Compliance

Zollstrasse 62
PO Box
8031 Zurich
Switzerland

+41 44 254 99 66

daniel.haymann@mme.com www.mme.ch/en/
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Law and Practice

Author



MME Legal | Tax | Compliance is an innovative and fast-growing Swiss firm that offers integrated professional advisory and litigation services in all fields of legal, tax and compliance. MME supports and represents both companies and individuals in business and economic-related private matters. Many of MME’s partners are nationally and internationally recognised as leading experts in their areas of practice, and together with their teams provide made-to-measure advice and practical, cost-effective and down-to-earth solutions for improving their clients’ businesses or resolving their private economic challenges. MME’s clients recognise the firm particularly for its lean organisational structure, its co-operative hands-on approach and its cost-effective workflow. They and MME’s peers consider the firm an innovation pioneer which consistently operates at the cutting edge of the industry and the relevant fields of business. With its open-door, hierarchy-free company culture and its consistent innovation policy, MME has also become one of the most attractive employer brands in its field in the Greater Zurich Area, and attracts a considerable number of young high-potential associates and consultants.

Trends and Developments

Author



MME Legal | Tax | Compliance is an innovative and fast-growing Swiss firm that offers integrated professional advisory and litigation services in all fields of legal, tax and compliance. MME supports and represents both companies and individuals in business and economic-related private matters. Many of MME’s partners are nationally and internationally recognised as leading experts in their areas of practice, and together with their teams provide made-to-measure advice and practical, cost-effective and down-to-earth solutions for improving their clients’ businesses or resolving their private economic challenges. MME’s clients recognise the firm particularly for its lean organisational structure, its co-operative hands-on approach and its cost-effective workflow. They and MME’s peers consider the firm an innovation pioneer which consistently operates at the cutting edge of the industry and the relevant fields of business. With its open-door, hierarchy-free company culture and its consistent innovation policy, MME has also become one of the most attractive employer brands in its field in the Greater Zurich Area, and attracts a considerable number of young high-potential associates and consultants.

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