Italy: «cannabis light» encroaches on the illicit cannabis market

According to a study published in the European Economic Review by three economists, the legal market for cannabis light in Italy is said to have encroached on the illicit cannabis market. Thus, greater access to hemp flowers—which can contain up to 0.61% THC in Italy—is believed to have led some cannabis users to stop consuming illicit products, resulting in the loss of tens of millions of euros for criminal networks.

The study also shows that in regions where hemp flowers were sold, there was a 33% reduction in the number of cannabis plants grown illegally.

Researchers say that "light cannabis" has also had indirect effects on organized crime, including a 31% reduction in the number of people arrested for drug-related offenses.

«Overall, the policy has had the beneficial effect of reducing the number of people incarcerated for drug-related offenses, the economists found.

The decrease in drug seizures also suggests an annual revenue loss of approximately €90 million to €170 million for organized crime groups. Economists noted that the estimated revenue losses were «not very high compared to the revenue from the entire illicit cannabis market, estimated at around €3.5 billion in Italy.».

«Our estimates suggest that the legalization of [cannabis light] has led to a reduction in street-level cannabis revenue of approximately 3 to 5% of the total cannabis market.».

Hemp containing 0.61% THC

To be eligible for agricultural subsidies, farmers in the European Union can only cultivate approved varieties of hemp containing less than 0.21% THC in the field. Italy’s hemp law includes a THC limit of 0.61% to exempt farmers from criminal liability in cases where factors beyond their control, such as a hot and sunny climate, cause the THC level in the hemp to rise to +0.21% at the time of harvest.

In practice, this higher threshold and the vague wording of the law allow producers to grow and sell cannabis flowers containing up to 0.61% THC THC without penalty. According to the study’s researchers, regions with existing hemp stores began selling «cannabis light» flowers in May 2017, and each store was associated with a decrease of up to 141% in monthly seizures of illegal cannabis in the region.

«Although the policy impacted all Italian provinces, those served by hemp shops before the policy experienced a more intense reduction in the quantity of cannabis seized,» the study writes.