In 2020, the President of Ukraine initiated a nation-wide opinion poll that evidenced public support to medical use of cannabis. Following the poll, most of major political stakeholders have declared their commitment to ensure the availability of cannabinoids for medical needs of Ukrainian patients. It appears that general political consensus for medical use of cannabis may finally be there, however, its scope and details are yet to be spelled out. Several proposals on regulation of cannabis are currently being worked through by Ukrainian Parliament. It is possible that relevant legislation may be approved in 2021.
Existing regulatory status
- Cannabis (including its resin, extracts and tinctures) and tetrahydrocannabinol („THC„): classified as schedule I substances prohibited in Ukraine.
- Cannabidiol („CBD„): not separately classified as a controlled substance. However, CBD products may be captured by general cannabis and THC restrictions.
Both recreational and medical use of cannabis are currently prohibited. Permitted operations only include license-based local cultivation of industrial hemp for fiber and seeds, subject to THC limit of 0.08%.
Cannabis perspectives in Ukraine
4 alternative draft laws on cannabis have already been submitted to Ukrainian Parliament. Though each of the drafts has its differences, they share some common features demonstrating opportunities for cannabis business in Ukraine:
Permitted local cultivation of cannabis for medical use
While it is intended to simultaneously open the market for import, drafts propose to also permit regulated local cultivation of cannabis for medical purposes both for internal market and export. This has a good potential, considering that agriculture is generally one of Ukraine’s strongest industries. The country has approximately 41.5 million hectares of agricultural land covering 70% of its territory and about 25% of the world’s reserves of black soil.
Friendly to foreign investment
At this stage no limitations are proposed in terms of residency requirements or other barriers to entry that would prevent a foreign investor from owning or investing in a local medical cannabis licensee. Furthermore, there appear to be no intentions to limit private capital in the industry via establishing state-owned manufacturing / distribution companies or agencies.
Low-THC cannabis products
3 out of 4 draft laws propose to establish a relaxed regulatory regime for cultivation of low-THC cannabis and business operations with low-THC products (details as to the limit of THC content and scope of control differ depending on the draft). This may become a driver for development of Ukrainian market for CBD and other low-THC products that are currently in grey area.
Key takeaways for business
It is intended to develop a consolidated version of proposed legislation for further voting by Parliament in the coming months of 2021. We recommend all those interested in opportunities of cannabis business in Ukraine:
- closely monitor the ongoing developments and take an active position in shaping of Ukrainian regulatory framework for cannabis based on best international practices;
- start exploring market entry strategies for Ukraine