On 26 October 2022, the German government approved a detailed key proposals paper setting out its plan to legalise the consumption of cannabis for recreational purposes.
According to the paper, cannabis plants, cannabis resin and THC will no longer be classified as prohibited narcotics. Recreational cannabis, medical cannabis and industrial hemp will no longer fall under the Narcotics Act (Betäubungsmittelgesetz, “BtMG”) – instead, a new Act will lay down the legal provisions governing their use. The plan is now to be examined by the EU Commission, which will assess whether it is compatible with international law.
What the paper covers:
I. Quantities and caps
- The possession and purchase of up to 20 to 30 grams of recreational cannabis is generally to be exempt from punishment for anyone over the age of 18.
- In contrast to the key proposals paper leaked a few days ago, the THC content is no longer to be capped. However, no decision has as yet been made on a THC cap for adults under 21 because of the increased health risks involved. Such a cap is likely to be difficult to enforce in practice.
- Home cultivation of up to three female cannabis plants per adult is to be allowed, provided that children and adolescents have no access to these. The sale of seeds and seedlings will be regulated.
II. Distribution structure for recreational cannabis
- The controlled sale of cannabis is to take place in officially licensed and supervised shops, which must be at least a minimum distance from schools and centres/facilities for children and young persons.
- Shops selling recreational cannabis must have the necessary expertise and be able to advise customers appropriately, with each customer being offered a consultation. Products containing THC are also to be accompanied by a leaflet containing explanatory information, which can also be accessed via a QR code on the packaging.
- The possibility of allowing pharmacies to sell recreational cannabis – with the aim of curbing the black market in rural areas – is also being considered, although the paper does not specify that pharmacies must be included.
- It is not yet clear whether and to what extent officially licensed shops will be able to sell recreational cannabis to private individuals online or by mail order. Any online stores must in any event have the same level of security as brick-and-mortar shops.
III. Licensed producers and distributors to cultivate cannabis in Germany
- The production, processing, storage, transport and sale of recreational cannabis are to be permitted only if a licensee has obtained a licence from the licensor – a Federal government or Federal state authority – to carry out the activity concerned.
- Cannabis for recreational purposes may only be cultivated in Germany, with no provision being made for imports. However, current production capacities are insufficient, so it is unclear how demand is to be covered without imports, at least during the transitional period until appropriate cultivation facilities have been established.
- Licences are to be issued to natural and legal persons who meet the following requirements:
- Proof of the required reliability (similar to that laid down in trade and industrial law),
- Proof that the applicant or the person entrusted with the management of the shop has the necessary expertise,
- Proof that the beneficial owner has been entered in an EU company register,
- Proof of sufficient financial standing given the scope of the licence applied for.
- The licence will be issued for a limited term, but can be renewed more than once upon request. The licence will also only be issued for a specific quantity.
- Recreational cannabis must be protected from unauthorised access by third parties at all stages of the supply chain.
IV. Packaging and advertising
- Advertising cannabis for recreational purposes will continue to be prohibited.
- As with medicinal products, detailed information is to be provided on the packaging and the package insert.
V. Pricing/taxation
- The key proposals paper does not mention a standard sales price for specific cannabis strains in licensed shops. It would appear that shops are to set their own prices.
- VAT and a consumption tax are to be payable, with the ultimate aim being to achieve a retail price that comes close to the black market price.
- The tax is to be levied on the basis of the THC content (x euros per gram of THC).
Vi. Cannabis use and driving
- The government will enlist specialist committees to help it to decide whether the THC limit for driving under the influence of cannabis is to be increased. The paper does not contain any information on this.
Notification procedure and estimated timeframe for liberalisation
Federal Health Minister Karl Lauterbach explained at the press conference on 26 October 2022 that implementation of the key proposals would depend on the outcome of the discussions with the EU Commission.
The key proposals were therefore submitted to the Commission so that it could check them for compliance with EU law as part of an informal consultation process.
The discussion of the plan with the EU Commission is apparently proving to be difficult, as the Commission – despite the different legal situation in the Netherlands in particular – is said to have expressed considerable doubts as to whether the German plan complies with European law. For this reason, the bill originally announced for the first quarter of 2023 has not yet been finalised. Press reports maintain that, according to the latest plans, only some of the amendments will be submitted to the Commission, while the others will be implemented solely on the basis of German law. However, the intent is apparently no longer the comprehensive commercial legalisation of cannabis for recreational use as envisaged in the key proposals paper (at least not for the time being):
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In a first step, recreational cannabis will only be offered in certain model regions in individual certified shops, with developments in these regions being evaluated over several years. Depending on the findings, the Commission would have to be consulted again before comprehensive liberalisation.
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Liberalisation in the non-commercial sector will take place without the involvement of the Commission. Thus, in future, anyone who possesses recreational cannabis for their own use or grows it on their balcony or in their garden will remain exempt from punishment. A limit of 20 to 30 grams is being discussed. One new idea – which has already been raised by the Free Democrats (FDP) and the Greens in particular – is that “social clubs” could also be established. These would be non-profit cooperatives formed by recreational cannabis users to grow and distribute cannabis for their own use. Such cannabis clubs can be found, for example, in Portugal, the Netherlands and Spain.
Current legal framework in Germany
For an overview of the current legal framework for the production and distribution of cannabis in Germany please see our client update “Dynamic German cannabis market: Rising medical use today | Recreational use tomorrow”
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