New key issues paper on cannabis legalization in Germany

On 12 April 2023, Federal ministers Karl Lauterbach (Health) and Cem Özdemir (Food and Agriculture) presented a new key issues paper of the Federal Government (in German) on the legalization of cannabis for consumption purposes in Germany.

by Judith Heimbürger, Malte Goetz and Peter Homberg, Dentons

This is the second key issues paper—the first such paper was published in October 2022 (see our Client Alert here)—which, among other things, provided for the possibility of dispensing cannabis for consumption purposes through licensed shops and pharmacies, the legalization of the purchase and possession of up to 30 grams of cannabis flowers for personal consumption as well as the personal cultivation of up to three cannabis plants.

After the publication of this key points paper, the ministries involved in the legalization project exchanged views with the EU Commission in Brussels on the compatibility of this project with European law, and—presumably after receiving unambiguous feedback—prepared new key points, which are initially somewhat more conservative than the first key points paper.

Content

In concrete terms, the government defines its project as a “two-pillar model,” which consists of the first pillar, “private and community noncommercial self-cultivation,” and second pillar, “regional model project with commercial supply chains.”

The first pillar consists of the legalization of individual self-cultivation of up to three cannabis plants on the one hand, and the concept of “community self-cultivation” in so-called cannabis clubs on the other. These cannabis clubs are to be subject to the general law on associations in Germany. It is to be made possible for these clubs to distribute cannabis flowers, seeds and cuttings among their members (at most 500). Licensing and supervision is to be carried out by state authorities. These regulations would of course be accompanied by the decriminalization of the possession of cannabis up to certain maximum amounts. Prevention and youth protection measures are to be expanded.

With the 2nd pillar, regionally limited, scientifically accompanied model projects are to be established, which are to pave the way for a nationwide, state-controlled stimulant market, as envisaged in the 2021 German government coalition agreement. According to the new key issues paper, “the effects of a commercial supply chain on health and youth protection as well as on the black market are to be scientifically investigated.” These open-ended and scientifically monitored projects will initially run for five years, and only adults within certain regional limitations (for example within a city or district) will be eligible to participate.

While, compared to the first key issues paper, a fully open market in which every adult can purchase cannabis for consumption purposes in licensed shops is now no longer the immediate priority, the pillars nevertheless represent stages on the way to achieve this goal.

Time frame

A draft law on the first pillar is to be presented before the end of April 2023. Implementation, according to Minister Lauterbach, should still take place in the course of the 2023 calendar year. The draft law on the second pillar will likely be presented after the summer break and implemented after the first pillar. This time frame given by Lauterbach is much shorter than expected for both industry and consumers. In particular, ministers Lauterbach and Özdemir emphasize that they intend to avoid involving the Federal Council (Bundesrat) in both pillars. Whether this will be possible is questionable, as, for example, the first pillar includes authorization and monitoring by the administrative authorities of the individual states (Länder), so that consent of the Bundesrat may be required. Moreover, according to Minister Özdemir, the intention is to avoid a notification procedure by the EU Commission for the first pillar, while such a procedure is likely unavoidable for the second pillar.

Assessment and outlook

At first glance, it seems as if the German government has retreated somewhat with the new key points compared with the originally announced goal and the first key points paper from October 2022. However, the situation under current international and European law was clear from the outset; thus, the original plan would have been in violation of those laws in the extent the plan was originally communicated. The fact that the federal government presented its project transparently from the outset and voluntarily entered into a constructive discourse with the European Commission significantly reduces the risk of infringement proceedings being initiated by the Commission (Article 258 TFEU) or that a ruling by the ECJ would be unfavorable to the project. It is therefore consistent to react to relevant feedback from the Commission by making adjustments or compromises. 

Nevertheless, many ambiguities remain for the industry before the actual draft legislation is published. The biggest question mark remains the source of supply of the so-called cannabis clubs. Where does the actual cultivation take place? Who provides the infrastructure and the expertise needed to cultivate cannabis under certain quality standards? The current demand for medicinal cannabis already exceeds commercial cultivation in Germany; at the moment, it seems quite unrealistic to expect potentially millions of consumers to be sufficiently supplied by cultivation through cannabis clubs. 

The key points presented, however, likely already exhaust the possibilities under current EU law. The intention to promote a progressive, prevention-oriented cannabis policy at the EU level in the long term is laid down in the key points paper and is presumably also the only effective way to realize the original goal of full legalization and the establishment of a stimulant market.

The article was published in the Dentons on April 13, 2023.

Photo Credit: Bild von starline auf Freepik