Legalization of industrial cannabis in the Republic of Armenia

            The Government of the Republic of Armenia has legalized the cultivation of cannabis for technical purposes. On July 15, 2021, a decision was made on the licensing procedure for the production, import, export or wholesale trade of cannabis and the approval of the forms of licenses for these types of activities by the executive body of the state power of the Republic of Armenia.

            The organization of industrial cannabis production in our country is a necessary measure to combat the crisis in the economic sphere, which is confirmed by the practice of different countries. For example, the United States, Canada and China really consider this as an anti-crisis economic measure.

            It cannot be denied that there are risks in this area of activity, therefore it is necessary that the RA authorities have at the same time mechanisms for managing these risks.

            In general, the opportunity to engage in the cannabis business is of great interest not only for the Republic of Armenia, but also for a number of other countries, both economically highly developed and developing. This was expected due to the fact that cannabis products are excluded from the list of narcotic substances at the UN level, so we can only accept the new reality. However, the legalization of cannabis occurs at different levels depending on the country.

            The legal status of cannabis in Armenia has led to the need for amendments and additions to the following Laws of the Republic of Armenia:

1) “On licensing”

2) “On state duty”

3) “On narcotic drugs, psychotropic substances”

            In Armenia, citizens are allowed to produce, export, import or engage in wholesale trade of industrial hemp only if they have a corresponding license. A license to carry out one of these types of activities is issued for a period of 10 years by the licensing authority, namely the Ministry of Health of the Republic of Armenia, with the right to prolongation. The validity of this license can not only be extended within the framework of the RA law, but also suspended or terminated.

            It is important to note that in Armenia only legal entities are entitled to obtain a license, according to our legislation. Individuals are deprived of such a right, so that the Armenian authorities do not lose the opportunity to keep all activities related to cannabis under control.

            According to the RA Law “On State Duty”, a state fee is charged for the issuance of a license in a certain order and amount of money established by the Republic of Armenia. The licensing authority of the Republic of Armenia is obliged to inform the applicant about this within one working day from the moment of making a decision on issuing a license or its duplicate, extending its validity period, reissuing it, etc. And the applicant is obliged to pay the state fee established by the RA legislator for the provision of the relevant service no later than within five working days from the date of issuing the license or its duplicate, extending its validity period, reissuing it, etc.

            According to the RA legislation, the state duty is paid in cash or in non-cash form, depending on the discretion of the applicant. A receipt issued to the payer by a bank, an official or a cash authority that made the payment is used as proof of payment of the state duty in cash. And in the case of a non-cash form, the fact of payment of the state duty is confirmed by the payer’s payment order with a note from the relevant bank on its execution.

            In a situation where the applicant has not provided a document certifying the payment of the state fee, the licensing authority has the right to verify the fact of its payment in the electronic system of state payments of the Republic of Armenia. In case of non-payment of the state duty within the period established by the RA law, the applicant’s application is subject to rejection, since the state duty is paid for every legally significant action on the part of the RA state bodies without fail.

            The algorithm of applying to the licensing authority of the Republic of Armenia is not complicated, but in any case it is necessary to take into account all the mandatory requirements and conditions for licensing activities on the territory of Armenia, which requires increased attention and free time from the applicant.

            The applicant, first of all, must prepare the necessary package of documents for applying to the licensing authority. If the documents are not provided in full or there are insignificant shortcomings in the documents, the licensing authority offers the applicant to eliminate the shortcomings within two working days from the moment of their discovery. If the applicant provides such documents or materials that contain false or distorted information, the application will definitely be rejected, so you definitely should not risk it.

            A legal entity that has obtained a license for the production of industrial cannabis, on the basis of Part 8, Article 10 of the RA Law “On Licensing” in order to ensure international security and international obligations of the Republic of Armenia to protect the health and morals of the Armenian society, the rights and freedoms of other persons, should not involve the following categories of persons in this activity:

a) persons under the age of 18 or under the age of majority

b) persons who have a criminal record for a crime related to narcotic drugs or psychotropic substances, regardless of the circumstances of the repayment or removal of the criminal record

c) persons brought to responsibility for such an administrative offense related to narcotic drugs or psychotropic substances

d) persons suffering from drug addiction

e) persons taking narcotic drugs or psychotropic substances

            In connection with the above-mentioned norm, the applicant is obliged to provide the licensing authority with all the data about the employees who are going to be involved in this activity. Therefore, only verified/registered legal entities can produce cannabis in Armenia.

            It should be emphasized that the legal status of cannabis in Armenia is not equal to permissiveness. The Armenian legislator has established a restriction in the form of the production of no more than 200,000 (two hundred thousand) tons of industrial hemp and no more than 200,000 (two hundred thousand) liters of cannabidiol oil in the aggregate of all issued licenses. It follows from this that each legal entity can produce no more than 10% (ten percent) of the established size of industrial cannabis.

            Summing up, we can conclude that the current legislation of the Republic of Armenia allows entrepreneurs to grow industrial hemp, removing numerous previously existing restrictions in this area, due to the fact that industrial hemp is one of the most promising areas in agriculture worldwide.

            In addition, the legalization of cannabis will lead to the displacement of the black market from Armenia with the help of legal sales, which will allow taking away significant profits from drug traffickers in favor of the state budget of the Republic of Armenia.