Federal Court ruling: No more tobacco taxes on hemp flowers (<1% THC)

Press Release | Oberglatt, February 18, 2020

The Federal Supreme Court ruled on January 29, 2020 (2C_350/2019) in the case of Green Passion GmbH (now: CANWAY Schweiz GmbH) against the Federal Customs Administration that there is no legal basis for charging tobacco taxes on hemp flowers with low THC content (<1%).

In March 2017, the Federal Customs Administration announced via a fact sheet that such hemp flowers were subject to tobacco tax, as they considered the product a "tobacco substitute" for tax purposes.

Green Passion opposed this view and took the case through all legal instances. After the Federal Administrative Court ruled differently, the Federal Supreme Court has now clarified that hemp flowers with low THC content are not considered a tobacco substitute for tax purposes.

Instead, the product is considered a potentially new taxable item. To tax such a product, the necessary legal basis must first be established at the federal level according to the current Federal Constitution.

CANWAY Schweiz GmbH welcomes the fact that the Federal Supreme Court has confirmed the need for new laws regarding cannabis. CANWAY supports and calls for clear legislation for cannabis products.

The tobacco tax of 25% on the retail price that was previously charged on hemp flowers with low THC content is now immediately abolished thanks to the new Federal Supreme Court ruling.

The CANWAY Group, with its Green Passion retail stores and online shop www.Greenpassion.ch, will pass this price advantage directly on to its customers. This Federal Supreme Court ruling is therefore, above all, a win for consumers.

It can be expected that retail prices for hemp flowers in Switzerland will generally decrease accordingly.

If you have any questions, feel free to contact us.