In what appears to be a breakthrough at the federal level, leaders in the incoming national governing coalition have agreed formally to legalize adult-use cannabis in Germany
In what is widely seen as an overdue, inevitable, but until literally the aftermath of the last federal election in September, not quite möglisch (or possible) development, the coalition parties making up the next government of Germany have agreed to legalize recreational use of cannabis. For those addicted to social media, this is now old news – as in so last week. Things can move quickly in the biz – even if it is short flurries rather than a snowstorm. Regardless, it is also clear at the federal level aus Deutschland that there has been a change in the weather.
News that has begun to emerge in both German and English language press for the last week at this point seems to indicate that the parties have agreed also to introduce legislation in the next session (namely next year). The news is in fact, so momentous, that people are still writing articles about the event – not even yet an analysis about timeline, or the many possibilities that come between here and then.
This is after all, cannabis reform, and further of the recreational kind. This is big stuff – for the global market. And like the cultivation bid there is much that can and absolutely will go wrong.
Cannabis is not exactly decriminalized here. Patients still talk of being stopped by the police – and one of the best known, who sued the government and won, changing the law in 2017, went to jail this year for growing his own. Beyond this, many struggle to even find a doctor, as well as getting prescriptions approved.
However, the wheels have been coming off the wagon for the last few years – ever since the Bundestag (German parliament) voted, unanimously, to mandate the coverage of medical cannabis under public health insurance in 2017.
From early reports, new changes are also afoot for patients – but the devil, as they say, is in the details. The biggest issues here are cost. And that is not something the recreational market is going to solve, at least by itself.
The ruling coalition will introduce legislation designed to regulate (and tax) the new industry, which the FDP, one of the three parties in the new coalition, has already claimed will be worth over 1 billion euros (about $1.2 billion) annually. This being by far the most “capitalist” if not “business oriented” political parties here (read fairly laissez faire, certainly for Germany, anti-tax (for Germany) and generally libertarian otherwise.
In truth, the tax (and tourist) revenues are likely to be much bigger than this.
A tour of the Main River augmented by cannabis, anyone? It may even begin to rival the wine industry in some parts of the country, starting with this one. Stranger and globally revolutionary things have certainly happened and most certainly in this part of the world. Just ask Martin Luther.
No matter where the recreational cannabis is cultivated, however, the reality is that the market is likely to be a major, monster market – and this prediction starts with common sense. No matter the remaining stigma, there are 80 million Germans. Colorado only has just over five million residents and, no matter adjusting for the global ski and other tourist market, their state market is worth $10 billion a year as of 2021. Granted this is seven years after the first beginnings, and these things take time, like the best cultivator knows, to cure. Both Colorado and Washington State markets only got going two years after state residents voted for referendums in both states during the presidential elections of 2012.
Things are almost certainly not going to get going fully for the next 18-24 months.
And in the meantime, there are the inevitable snafus that such politicking invariably creates.
For example, while the legislation will also (inevitably) have measures to implement “harm reduction,” this may also be its undoing. Current political discussions are to tax cannabis like cigarettes and use the same in part for “youth education.” If that is the current plan, it will create a market that is antithetical to stamping out unlicensed sales. Cigarettes sell here for $12 a pack (for 20 rolled cigarettes). The vast majority of this is tax – which also pays for the pictures of grotesque lung damage along with a graphically disparaging counter PR campaign that must accompany every cigarette advertisement if not box here.
Try that with cannabis and many will stay in at least the grey market.
Regardless, this development is huge here. And potentially will affect everyone with a medical distribution license.
It is also likely, just as in Holland, to stir a great deal of debate about the line between recreational and medical use. The Dutch, the only other country to consider covering comprehensive medical cannabis coverage under national health insurance, stopped doing so literally the month Germany decided to cover it. At present there are an estimated 100k patients – which is respectable given that this is a market that is only four years old. Tell that, however, to those who still cannot get coverage, and this is small hope indeed.
But beyond patient coverage, and who qualifies, that also includes other basics. For example, advertising will be allowed (which will be intriguing, given the prohibition of medical cannabis promotion), however, this too will be strictly regulated to try to discourage at least teen use.
This alone, not to mention attempts to rewrite the German Narcotics Act, where cannabis (including of the CBD kind) is still considered a narcotic – out of step even now with the latest in EU rulings on the same. THC presents another discussion. Expect to see a great deal of wrangling, with many long and unintelligible German phrases used to describe that process, coming soon.
See next summer. Ruling coalitions like this need quick and easy wins to get used to working with each other, and to grease the wheels of compromise when they start to not.
A Giant National Experiment
Even though this development feels like an overdue relief, those in power are making sure they do not seem too radical a departure from the outgoing CDU. This also means, beyond the draconian tax proposals, that the entire enchilada is being considered “temporary.” Namely it will be reviewed after four years with an equal review of the social impact of such reform.
Good luck with that. Putting the cannabis horse back in the barn is impossible. Of course, they also had to say it. However, if it sounds “efficient” and “German,” don’t worry, there will be flubs and flameouts ahead. See every legalizing state before it, not to mention all the hullabaloo about the first German medical cannabis bid. Regardless, this is a huge development. And everyone on the ground knows it.
No matter how unpalatable the topic was in 2016, the last time lawmakers began to craft the bill to allow medical use, home grow is of course, back in the room. The draft legislation, based on the report from the coalition’s working group on health and care no doubt, will also plan for drug and flower checking services where people can have “illicit” substances checked for more harmful ingredients if not additives.
It is very likely however, that some kind of licensing scheme will be cooked up here for the same. After all, this is how the Canadian model works. And even pets are licensed here.
Regardless – this too, no matter the fact that the “industry” does not like it, nor really do politicians, all that is going to be needed to establish this right is a sick patient who is arrested and sues the government. Discount medical licenses will almost also certainly be part of the mix, supported by, at some point, insurers who will also see this as a bit of a relief. Perhaps the discounted permit would be dispensed only after “education,” but then again that is all so German – and logical.
It will be all interesting to watch – if not help shape.
Cannabis Reform, Now! Globally
In an interesting twist, Germany may be competing with Luxembourg to be the EU’s first adult use market outside Holland where legislators are also wrestling with how to implement a promised recreational market. This news may also now push Portugal to get off the fence, where legislation has been pending for the last six months.
Beyond Europe, Mexico is expected to vote on recreational use by the end of the year, given that the Supreme Court has told the legislature there are to be no more extensions on the same. And of course, north of the Rio Grande, federal reform also appears to be moving in both houses of Congress – although of course, this issue has been there many times before. Even the right-wing government in Brazil is acceding to medical efficacy (although God help the rainforests).
The wheel, indeed, is turning. It does seem that the forces of reform are starting to push towards the final goal – full and formal normalization and legalization, globally.
Certainly, a German recreational market will push full reform now much faster across the continent, and potentially even the UK. Not to mention the much stalled and ducked discussion at the nosebleed international level about the Schedule I designation, no matter what the Chinese want. Of course there is also the possibility that post Covid and real estate meltdown, cannabis will start to look like a relatively good, if not safer investment.
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