Lex kratom: We support the continuation of the regulated market model, but we warn against its weakening by banning legal e-shops and other barriers for smaller entities
Summary
The government introduced the Lex kratom amendment package under the pressure of alarming reports of deaths, poisonings and dangers to children. However, the substantive content of the package largely confirms what advocates of rational policy have been striving for for a long time. A regulated and taxed market instead of prohibition. Excise tax and proactive law enforcement against illegal sellers are a logical rational continuation of the regulation of psychomodulatory substances, which has taken kratom out of the gray zone since the end of 2025. The package of measures also has three serious risks. The first is the ban on distance sales, which inverts the logic of harm reduction and creates fundamental risks of the illegal market. The second is a set of barriers to entry that will lead to the concentration of the market in the hands of a few large players. The third is the transfer of public health regulation from a decree to a law, which reduces the state's ability to quickly respond to new risks by changing decrees. The amendment of the law must be carried out through a long legislative process, while the ministry can amend the decree in a matter of months. The proposal does not yet reflect the new situation on the illegal market and does not deal with lowering the limits for 7-hydroxymitragynine at all, although there is expert consensus on the need for this change.
What Lex kratom actually brings
The package is a set of amendments to several laws. The amendment to the Act on Addictive Substances introduces hygiene requirements in distribution, a waste management regime, changes to labelling and increased sanctions. The amendment to the Act on Excise Taxes introduces a tax on kratom in three bands according to the concentration of active substances, CZK 2 per gram or milliliter for products up to 2.5% mitragynine and 0.1% 7-hydroxymitragynine, CZK 10 for higher concentrations up to 12.5% mitragynine and 0.5% 7-hydroxymitragynine, and CZK 20 for everything else, including unpackaged raw materials. The amendment to the VAT Act reclassifies psychomodulatory substances from the reduced (12%) to the basic rate (21%). The amendment to the Act on the Protection of Health from the Harmful Effects of Addictive Substances raises the age limit from 18 to 21, introduces a ban on e-shops and establishes a strict regime for specialized stores. The amendment to the Act on Administrative Fees increases the fee for a sales permit. It is proposed to come into effect on January 1, 2027.
What we support
Excise tax and reclassification of VAT. Taxation of the regulated market is a tool that reduces affordability, covers social costs and at the same time confirms that kratom is a legal addictive substance comparable to tobacco and alcohol. Banding the tax according to concentration is factually correct, because it favors weaker products and burdens strong extracts. This is consistent with an approach focused on risk reduction - regulation according to the degree of risk.
Closed licensed chain. The rule that psychomodulatory substances may only be handled by licensed entities and may only be transferred to licensed entities is correct. We support the entire market being made up of a controlled circle of authorized persons.
Greater protection of public health? Mostly only proclamatively. Almost everything that Lex kratom presents as new labeling is already in effect today. Decree No. 448/2025 Coll., on psychomodulatory substances, which was introduced by the original amendment, requires the indication of the concentration of active substances (Section 7, paragraph 3), a list of ingredients (Section 7, paragraph 4), instructions for use including storage instructions (Section 8) and the number of unit packages in the outer packaging (Section 5, paragraph 3). The amendment only raises these items from the level of a decree to the level of a law. It does not represent new consumer protection for the most part, and the move to a law also has its price, which we discuss below in the section on the ability to respond to new risks. The truly new elements are the extension of hygiene requirements from production to the entire distribution chain (Section 33f, paragraph 2) and a broader regime for handling unusable substances as hazardous waste (Section 33a, paragraph 7). For hygiene in distribution, the specific content of the obligation is postponed to a future implementing decree, which does not yet exist. We welcome these two elements. At the same time, it is true that the backbone of the quality and safety regulation of kratom was already built by the original regulation from 2025.
Active age verification and law enforcement. The seller's explicit obligation to verify the buyer's age and a proactive approach towards illegal sellers are the tools that a regulated market needs to function.
Raising the age limit to 21 years, with a reminder of the need for consistency. We do not oppose the protection of young people during the period of brain development and in part even welcome it. If the state takes the argument about brain development seriously, it should apply it across addictive substances. Alcohol is demonstrably a greater risk to the developing brain than kratom, and its age limit remains at 18. A consistent preventive policy would therefore be to raise the age limit for alcohol as well. Selective strictness towards kratom while being lenient towards alcohol weakens the credibility of the entire preventive argument.
Where the proposal is flawed
A ban on distance sales reverses the logic of harm reduction
The ban on e-shops does not eliminate distance sales of kratom. It eliminates legal, regulated and quality-controlled distance sales. Cross-border anonymous sales from the grey zone will only strengthen this measure and are practical for Czech authorities.
Alternatively, online sales will be transferred to a completely illegal zone via encrypted chats, darknet and drop agents. This is more of an attempt to address the unintended consequences of new market models using outdated methods. The declared goal is security. The real effect is a shift of part of the demand back into the uncontrolled illegal zone, i.e. potentially into a worse situation than where we were before 2025.
A system for safe distance selling exists in the law and sub-legal norms. At the same time, there is a fundamental contradiction in the government's argument for this ban. The outputs of the KORUND security government action included a proposal that the same rules that apply to the online sale of psychomodulatory substances should also be introduced for alcohol and tobacco. According to the government's own materials, the PML distance selling model was therefore set up well and was intended to serve as a model for riskier commodities. Now, this proposal is repealed. If the reason is not security, and KORUND materials show that security spoke in favor of maintaining the model, the question is what the real reason is. Our recommendation is therefore to maintain regulated distance selling with robust age verification and to consider extending this model to alcohol and tobacco, in line with the recommendation from the KORUND action.
Barriers to entry lead to market oligopolization
The proposal brings together a set of measures whose combined effect is market concentration. The administrative fee for a sales permit increases from 20,000 to 30,000 crowns per establishment, i.e. by half, and is also reflected in the annual maintenance fee. A permit for production, import and distribution costs 200,000 crowns. Added to this is the rule of one establishment and one entity, a ban on e-shops, which removes a low-cost sales channel, sanctions of up to 20 million crowns, and a regime of specialized stores that are allowed to sell literally only kratom and related goods, without any other products, with darkened shop windows and an external sign with a font size of no more than 3 centimeters. The explanatory memorandum to the fee itself states that its increase is intended to ensure that only entities capable of bearing the costs enter the market, and to limit purposeful or speculative entry to the market, which is justified by high commercial attractiveness and significant business margins. This is an open admission of the intention to erect a barrier to entry, wrapped in the language of health protection.
Moreover, the argument about high commercial attractiveness is in direct contradiction with the business model that the same proposal creates. The seller must pay high licensing fees, is allowed to sell only in a brick-and-mortar store with zero marketing, and is allowed to offer literally only kratom. Such a model is economically sustainable only for large entities with capital or other sources of income. The declared goal is the protection of children. The structural effect is the displacement of small sellers and the concentration of the market in the hands of a few large players. The anti-marketing goal in itself is legitimate. Its specific implementation in the form of a 3-centimeter limit on the external sign is, however, unacceptable and does not act as a rational regulation of promotion.
Estimated revenue of 1.2 billion? Under these conditions, rather not
The government estimate calculates revenue of up to 0.8 billion from excise tax and up to 0.4 billion from VAT reclassification, a total of approximately 1.2 billion crowns per year. This estimate is realistic only if the state does not create conditions conducive to the illegal market. The package also reduces the tax base itself, because the ban on e-shops and barriers to entry will actually drive part of the demand to the illegal market. According to our calculations, even if the current demand is maintained, the revenue would reach a maximum of 500 million crowns. The government is thus placing fiscal expectations on a market that it is reducing with its own measures.
In addition to reasonable barriers, there is, however, another way to actually increase revenue and public health protection. An evaluated and relatively safe cannabinoid should be included in the list of psychomodulatory substances. Such a step would have a twofold positive effect. First, it would dramatically reduce the demand for unregulated synthetic cannabinoids, which are currently sold in convenience stores and vending machines without any control. Second, it would broaden the base for tax revenue. Regulation that expands the legal offer of safer alternatives protects health and the budget better than regulation that narrows the legal market.
Part of a rational approach to revenue is also its purpose. According to our repeated proposal, part of the revenue from the excise tax should be directed back to the issue of addiction, i.e. to the evaluation of substances, control, prevention, harm reduction and treatment. The proposal does not envisage any specific purpose and generally directs the revenues to the state budget.
Moving public health regulation into law reduces the ability to respond to new risks
The original architecture from 2025 intentionally placed technical and safety-relevant parameters in a decree. The reason is systemic. The Ministry of Health can amend a decree in a matter of months. A change in the law must pass through the Chamber of Deputies and the Senate, which always takes a longer time and can take a year or more. For a substance group that has only been regulated since the end of 2025 and about which knowledge is still developing, the speed of response is itself a safety feature. New findings will emerge and the regulator must be able to respond to them within a period of months.
Lex kratom moves a large part of these requirements from the decree to the law. It presents this as strengthening consumer protection, but in reality it reduces the flexibility of the entire system. Any future modification of what has been moved will require an amendment to the law instead of an amendment to the decree. This is the opposite of good regulatory design for an area with a dynamically developing situation. In an area where new risks are constantly emerging, reduced response capacity worsens health protection.
What is missing from the proposal
Another problem of insufficient prioritization and, above all, the absence of a response to current developments is the zero response to 7-hydroxymitragynine. The package does not address the reduction of limits for its presence at all, even though this is what would be needed from a health protection perspective now and even though we, as a think tank, have already drawn the government's attention to it. There is expert consensus on the need to reduce these limits at the level of the Advisory Committee for the Evaluation of Psychoactive Substances. This change belongs to a decree, where it can be made quickly and without the entire legislative process. The priorities of the proposal are thus reversed. For a parameter that can and should be changed quickly by decree, i.e. the limits for 7-hydroxymitragynine, the government can act almost immediately. For labeling requirements that worked without problems at the level of the decree, it moves them to the law, thereby slowing down future changes.
Our recommendation
- Support prevention through pricing - i.e. the introduction of an excise tax
- Consistently enforce existing regulation and prioritize the displacement of the illegal market and unfair competition from the legal industry
- Remove the ban on e-shops and maintain regulated distance selling with age verification. The ban does not eliminate online sales, only legal and controlled ones, and shifts part of the demand to unreachable cross-border sellers or to the uncontrollable environment of the darknet or encrypted chats.
- Do not increase barriers to entry, i.e. an increase in the license fee, a ban on distance selling, the rule of one establishment and one entity. Their combined effect is the concentration of the market in the hands of a few large players.
- Keep the security parameters in the decree and do not move them to the law. The ministry can amend the decree in a matter of months, while amending the law can take a year or more, which worsens health protection in the event of a developing risk.
- Reduce the limits for 7-hydroxymitragynine by decree, in accordance with the agreement of the Advisory Committee. Lex kratom bypasses this truly safety change, although it can be implemented quickly.
- Include one of the evaluated cannabinoids on the PML list and purposefully tie part of the tax revenue back to the area of addiction. This will divert demand from potentially dangerous synthetics and at the same time strengthen the tax base and financing of prevention and treatment.
Conclusion
In its tax and qualitative part, Lex kratom is a confirmation of the regulated market model that we have been promoting for a long time. In the part concerning the ban on e-shops and barriers to entry, however, it is a step towards oligopolization of the market and weakening of control, because it drives demand into the illegal zone. A rational addiction policy can be recognized by whether the measures reduce the risky uncontrolled market and protect health and do not only create greater risks for the illegal market, or do not only lead to oligopolization.
