Dentons: Key Proposals Paper: New Details on Planned Cannabis Legalization in Germany

Author: Peter Homberg On October 25, the German Federal Ministry of Health, with Karl Lauterbach as Minister of Health, published a key proposals paper outlining the main objectives of the intended reform of German cannabis law, which includes the legalization of cannabis for recreational purposes for adults. The Federal Cabinet approved the key proposals on October 26, 2022. In December 2021, the current federal government set the objective to legalize cannabis for recreational purposes in their coalition agreement. Subsequently, in June 2022, the Federal Ministry of Health, under the leadership of Federal Government Commissioner for Addiction and Drug Issues Burkhard Blienert, held a consultation process in which experts from the fields of health protection, youth protection, legal science and the cannabis industry, among others, were heard. The aim of these so called “hearings” was to provide profound expert assessments on relevant issues and to shape the way forward for the legalization process. Legalization Subject to EU Commission´s Review Recently, Karl Lauterbach presented the key proposals paper, outlining the main objectives the government intends to include in a draft law. Simultaneously, Lauterbach also announced the aim to follow a rather unconventional procedure in the German legislative process.  Since a cannabis legalization would not only be opposed by international law (1961 UN Single Convention on Narcotic Drugs, 1971 UN Convention on Psychotropic Substances, 1988 UN Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances), but also by EU law (Schengen Agreement, EU Framework Decision 2004/757/JHA), Germany risks facing an infringement procedure initiated by the EU Commission (Art. 258 Treaty on the Functioning of the European Union, “TFEU”) or by the other member states (Art. 259 TFEU) when implementing the legalization as planned. If the European Court of Justice (ECJ) would then conclude that the legalization violates EU law, the entire project would have to be scaled back again and the implemented laws would have to be overturned. This could result in significant damage to the political environment and, economically, to the affected industries. To avoid this, the German government will instead voluntarily ask the EU Commission for a preliminary review of its plans in advance. As part of this, the government will issue its own interpretative statement of the relevant legal framework, setting out its view that the EU objectives of youth and health protection can be better achieved by legalization, rather than prohibition.  If the EU Commission accepts this view, the legalization process will continue, and the government will release a draft law based on the key proposals paper. If, however, the EU Commission deems the key proposals to be in violation of EU law, the German government will not enact a draft law based on the paper. Whether the legalization project would then be abandoned completely, or whether the government would instead redirect its plan towards decriminalization instead of full legalization is unclear.  Main Key Proposals The main key proposals set out by the German government are: Relevant for the industry:
  • Cannabis for recreational purposes is to be available for sale in licensed stores and pharmacies. It is to be examined whether the maximum content of the psychotropic active ingredient tetrahydrocannabinol (“THC”) in legally available cannabis should be subject to an upper limit for users under 21 years of age.
  • The sale of synthetically produced cannabinoids should remain prohibited.
  • Cannabis products for smoking and inhalation or ingestion in the form of capsules, sprays or drops are to be permitted for sale. So-called edibles (products other than food offered for oral ingestion), however, will not for the time being.
  • Whether online or mail-order sales to private individuals should be permitted through officially authorized stores requires further consideration.
  • Cannabis businesses may only be established at a minimum distance from schools, children’s and youth facilities.
  • Cannabis trafficking without a corresponding license should remain punishable as a matter of principle.
  • Despite legalization, a general ban on advertising is to apply.
  • In addition to the sales tax, an additional cannabis tax, which could be assessed based on THC content, is planned. However, the end consumer price should be close to the black-market price.
  • The demand for cannabis is to be covered by cultivation in Germany, as importation is out of the question for reasons of EU and international law.
Relevant for consumers:
  • The purchase and possession of a maximum of 20 to 30 grams of cannabis flowers for personal consumption should generally be exempt from punishment from the age of 18, regardless of the origin and THC content.
  • Minors should also be exempt from punishment, but it would be possible for the youth welfare offices to oblige them to take part in prevention courses. Cannabis carried will be confiscated.
  • Home cultivation of up to three cannabis plants would be allowed. 
Assessment and Outlook The response from industry and the public to the paper that has become known has been great. The contents available so far show the general direction in which a new cannabis legalization could develop. Many of the points reflect what the industry and consumers expected after the announcement of the legalization proposal. Other aspects – such as the age-based maximum THC content, the possible establishment of online commerce, or location restrictions – may in turn surprise and pose practical and economic challenges for the industry.  The announcement of the initiation of a preliminary examination procedure by the EU Commission is, economically and politically speaking, sensible and commendable. The parties affected – the industry, consumers, and voters – will find out as early as possible in what form the cannabis legalization will be able to take place long term.  The timing of the publication of the draft law, let alone the implementation of legalization, cannot be predicted at this point. In the spring of 2022, Federal Minister of Health Karl Lauterbach still announced a draft law for the second half of 2022 – a timetable that can no longer be met in view of the preliminary review procedure by the EU Commission that will now be initiated.