Germany Scales Back Its Cannabis Legalization Plan

There has been a considerable buzz in the cannabis industry regarding Germany's intention to legalize recreational cannabis, given its status as the largest economy in the European Union. Last October, the German Health Minister, Mr. Karl Lauterbach, submitted a proposed plan for the complete legalization of cannabis to the cabinet, indicating that it was merely a question of when it would happen.

However, there were legitimate concerns about Germany's ability to implement such a plan at that time, given its obligations under the UN treaty and EC regulations. The situation has changed, as Mr. Lauterbach recently revealed that Germany is revising its legalization plans and developing a "sound proposal that prioritizes public health and the safety of minors."

The German government has changed its stance and is now pursuing a scaled-down, two-pronged approach that offers restricted commercial opportunities, at least for now. The new plan for a regulated cannabis industry in Germany revealed last Wednesday, consists of two main components.

Under the new plan, nonprofit organizations can collectively grow cannabis for recreational use and share it among members for personal consumption. This aspect of the project is anticipated to be implemented in 2023. Additionally, region-specific pilot initiatives will be established with commercial supply chains for a specified period. The purpose of these tests is to gather data to support future public policies.

After initially pledging complete legalization, Germany has become the most recent nation to abandon, postpone, or substantially modify its cannabis legalization proposals. These policy changes underscore the need for companies to act with prudence and thoughtfulness rather than impulsivity. In recent years, Mexico, Israel, and New Zealand have also each revealed aspirations to legalize and regulate the recreational use of cannabis, only to witness those plans lose momentum due to various factors.

Why the News is Unsurprising.

Germany is a party to the 1961 Single Convention on Narcotic Drugs, a treaty designed to combat global drug trafficking and restrict the possession, consumption, and manufacturing of narcotics, including cannabis, for medicinal purposes and scientific inquiry.

Many individuals presume that signatories to the UN treaty have no option to legalize cannabis for recreational purposes. Still, Michael Krawitz, a US Air Force veteran, posits that there is a loophole in Article 2, Paragraph 9 that may permit this. Moreover, Canada is also a party to the convention and fully legalized cannabis in 2018, four years after the treaty was signed.

EU Membership has More Serious Consequences.

Unlike Canada, which is not a member of the European Union (EU), Germany is bound by all three international drug control treaties as a member of the European Commission (EC). As a result, Germany must obtain EC authorization for its cannabis plan, which must establish that the country will not violate any of the significant drug treaties.

Under the previous plan, Germany asserted that it could fulfill domestic demand for recreational cannabis without importing from other nations. Essentially, there would be no international trade in recreational cannabis involving Germany. However, since Germany is a Schengen member and shares borders with nine other Schengen countries, restricting cross-border trade may impact other Schengen countries.

In the previous proposal, Germany contended that it could satisfy local demand for recreational cannabis without importing from other nations. Essentially, there would be no global trade of recreational cannabis involving Germany. Given that Germany is a Schengen country and shares borders with nine other Schengen nations, such a decision to restrict cross-border commerce could affect other Schengen members.

According to Luther, the Germans have devised a method to achieve this while remaining compliant with EU treaties. Perhaps they were overly optimistic about what they could accomplish with the EU Commission. The EU Commission has provided them with a rather stark reality check.

The New Two-Column Model

The legalization strategy unveiled by Germany on Wednesday stipulates that nonprofit associations that allow for personal possession and cultivation would be assessed after four years. If necessary, the plan may be amended to address concerns regarding public health, youth safety, and the fight against the black market.

Individuals would be permitted to possess up to 25 grams of cannabis without penalty for personal consumption. Nonprofit organizations would have the ability to collaborate on the cultivation of cannabis for recreational use by their members under specific and well-defined legal structures that is yet to be established.

The government has stated that engaging third-party entities outside the nonprofit association for cultivation purposes would be prohibited. The state authorities would approve and oversee the cultivation, ensure adherence to quality, quantity, and youth safety standards, and conduct on-site inspections.

According to the German government, membership in more than one association could be prohibited. The plan also includes several other details:

A general ban on advertising cannabis and associations will be imposed, except for factual information deemed acceptable by the government.
Documentation and reporting will be required for production and distribution quantities.
Home cultivation of up to three female flowering plants would be permitted.
Membership fees would need to cover the association's expenditures.
The possibility of importing seeds from third-party countries for the associations is being explored.

The second strategy will center on regional trials featuring commercial supply chains. According to Luther, the success of the proposed regional pilot programs will be critical in determining the potential of the recreational cannabis industry. The German government describes this pillar as the next step towards national regulation, suggesting that full legalization may still be possible in the future.

Conclusion

The new plan for a regulated cannabis business in Germany marks a substantial change in the nation's attitude toward marijuana. The program does offer a mechanism for nonprofit organizations to grow and distribute cannabis for personal use as well as for regional pilot projects to gather data for future public policy, even though it is not as comprehensive as was initially promised.

This recent development in Germany's cannabis regulation plan emphasizes the importance of adaptable and strategic thinking in the rapidly evolving cannabis industry. The government is taking a responsible and measured approach to legalization by making adjustments and operating within international treaties. As Germany continues to explore new possibilities and work towards a more comprehensive regulatory framework, it will be fascinating to see how the market develops and transforms in the coming years.