Author: Peter Homberg
On 8 July 2024, the German Federal Ministry of Food and Agriculture (Bundesministerium für Ernährung und Landwirtschaft – „BMEL”) published a draft law on the liberalization of the cultivation and handling of industrial hemp (German Industrial Hemp Liberalization Act – Nutzhanfliberalisierungsgesetz – “NLG”). What is the current regulation on industrial hemp in Germany, and what would the new law change for the industry?
Existing Legal Framework
The basic provisions in the area of industrial hemp include: Regulation (EU) No 2021/2115 of the European Parliament laying down rules on support for strategic plans to be drawn up by the Member States under the common agricultural policy and financed by the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD) (CAP Strategic Plans), Commission Regulation (EU) No 2022/126 (Implementing Regulation) supplementing Regulation (EU) 2021/2115,as well as the provisions of the Cannabis Act (Cannabisgesetz, “CanG”) and the Regulation on the Implementation of the Integrated Administration and Control System (CAP Integrated Administration and Control System Regulation – GAPInVeKoS Regulation).
Imports from third countries are subject to licensing pursuant to Article 176(1) and Article 189 of Regulation (EU) No 1308/2013 of 17 December 2013 establishing a common organization of the markets in agricultural products.
In Germany, the Federal Office for Agriculture and Food (Bundesanstalt für Landwirtschaft und Ernährung, “BLE”) is responsible for overseeing the cultivation of industrial hemp and the implementation of THC controls for hemp cultivation as well as for the import of hemp from third countries.
Objectives of the Draft Law
The reasons for the draft law are of economic, but also legal and bureaucratic nature. The BMEL is convinced of the many benefits of hemp cultivation in terms of sustainability, climate protection and biodiversity. Almost all parts of the industrial hemp plant can be utilized: seeds, fibres, flowers and leaves are used in a wide variety of products, from textiles and food to cosmetics. Advantages of hemp cultivation are the low usage of fertilizer, pesticides and additional irrigation. Hemp improves the soil by enriching it with nitrogen from the air and provides a habitat for insects. Over the years, the cultivation of hemp has gained major popularity in Germany.
However, after a steady increase since 2013, the cultivation area of industrial hemp in Germany has now fallen again for the first time and stands at 643 hemp farms with 5,834 hectares of cultivation area in 2023. According to preliminary figures from BLE, this means a decrease of 246 hemp farms (-28 percent) and 1,109 hectares (-16 percent) compared to the previous year. A major reason for the decline is the legal uncertainty regarding the handling of industrial hemp with regard to various regulations. The previous regulations were also based on a very restrictive cannabis policy, which also extended to industrial hemp. The legislative project is intended to provide more legal certainty and more fields of activity for the industrial hemp sector. However, cannabis products intended for consumption for intoxication purposes, so-called edibles, will not be permitted under the NLG.
Key Content of the Draft Law
One of the proposed measures by the BMEL to achieve its objective is the revision of the term “industrial hemp” in Section 1 No. 9 a.) of the German Consumer Cannabis Act (Konsumcannabisgesetz – “KCanG”).The so-called “misuse clause” is to be removed. The “misuse clause” dates back to the old legal provisions of the German Narcotics Act (“BtMG”). Marijuana, plants and parts of plants belonging to the genus cannabis were only covered by the exemption in Annex I of the BtMG if, among other things, their handling (with the exception of cultivation) served exclusively commercial or scientific purposes that excluded abuse for intoxication purposes. This wording was adopted in the KCanG for industrial hemp. This restriction has so far been interpreted very restrictively by the courts. According to established case law, the sale of hemp products – such as industrial hemp tea or CBD flowers – is illegal despite compliance with the THC limit of 0.3%, even if abuse for intoxication purposes is improbable but not completely ruled out. In the opinion of the BMEL, this leads to an unreasonable restriction of the trade with industrial hemp products. With the adoption of the KCanG and thus with the introduction of a legal procurement option, such provisions are no longer necessary. In addition, the requirement of a “commercial or scientific purpose” is also to be removed. According to established case law, it is sufficient if there is a commercial purpose on one side of the transaction. In the opinion of the BMEL, the requirement has thus no significant regulatory content and is therefore redundant.
Also, indoor cultivation of industrial hemp will be allowed. The BMEL would like to give other market participants the opportunity to get involved in the cultivation of industrial hemp.
The draft bill will now be submitted for interdepartmental consultation. The timeline of the further legislative process is not yet finally determined.
