Cannabis for adult-use is no longer a clandestine indulgence anymore, but a thriving industry in certain countries globally. Germany remains slowly progressing towards this eventuality. Whether this is about to hit a major inflection point is still uncertain, even in light of recent draft legislation issued by the German Government on August 16.

Decades of discussion among scientists, criminologists, health professionals, politicians and courts have led to the current German Government setting the course for the legalization of cannabis for adult-use from 2024 onwards.

By decriminalizing limited cultivation and exchanges of cannabis, experts foresee not only a crucial reduction of related criminal activity but a preventative measure against dangerous pollution of cannabis products traded on illegal markets. Finally, enforcement agencies and courts will no doubt be relieved from the time and capacity given to cannabis having provided very limited anti-criminal benefit.

The German Government issued a policy paper earlier this year, outlining its plans moving forward: Via a first pillar of new legislation, the legalization of private handling of limited quantities of Cannabis. A second pillar of additional legislative measures shall then enable (to a certain extent) the commercial supply chains for adult-use cannabis in a private capacity.

What has been decided thus far?

In short, nothing is final yet. That said, on August 16 the German cabinet has approved the draft of a "Law on the Controlled Use of Cannabis and on the Amendment of Other Regulations" (“Gesetz[es] zum kontrollierten Umgang mit Cannabis und zur Änderung weiterer Vorschriften”, CanG). Draft legislation has been passed this week on to the German Bundestag, initializing the final step in the formal legislative process. We believe that there is a good chance that the draft CanG will be formally decided on until the end of 2023, coming into effect in 2024.

The CanG concerns solely the first pillar on private and communal possession, cultivation and exchange of cannabis for adults (above the age of 18) for personal consumption. The major developments pursuant to this draft are:

• Cannabis and non-synthetic THC will in the future no longer be legally classified as a narcotic in the sense of the German Narcotics Act (BtMG).
• Personal possession of up to 25 grams of Cannabis;
• Personal cultivation of up to 3 plants;

per adult person will be permissible, and in the basis that it is for non-commercial purposes only.

The handling and transfer of self-cultivated and/or possessed Cannabis to any other person will remain prohibited unless exchange is happening in the newly introduced concept of a communal cultivation associations. These cultivation associations cannot serve a commercial, profit-orientated purpose and require a license. They are exclusively permitted to grow cannabis for communal consumption, involving active participation from their members, and may only distribute it to members for personal consumption. Furthermore, they can only have a maximum of 500 members who must be adults and have their residence in Germany. Monthly distribution limit within the association is generally only allowed for up to 50 grams. Distribution to young members between the ages of 18 and 21 is limited to 30 grams per month, with a maximum THC content of 10 per cent. The distribution will only be allowed under certain controlled conditions, ensuring that it is of standardized quality and only in its pure and unadulterated form, i.e., marijuana or hashish.

As the bill focuses on the protection of children and adolescents, it proposes a general ban on advertising and sponsorship of cannabis and cultivation associations. In addition, the consumption of cannabis will be strictly prohibited within a safety zone of 200 meters from the entrances of cultivation associations, schools, institutions for children and young people, children´s playgrounds and publicly accessible sports facilities.

Finally, existing entries to the German central register – where certain criminal sanctions are registered against individuals – when such offences are related to Cannabis criminality, these can be expunged if the facts underlying the entry would not be subject to criminal prosecution under the new CanG.

The Second Pillar: Outstanding market opening for commercialization 

The second pillar of the liberalization policy is to enable a (publicly controlled) commercialization of Cannabis for adult-use, including private supply chains and distribution. After colliding into (foreseeable) EU commitments to international drug treaties, the German Government decided to reduce approaches to market openings and has not yet issued a respective draft bill (to be expected earliest late in 2023).

The envisaged scientifically designed model project is set to be executed in selected regions over a span of five years. Under a regulated, government-approved system, companies will be able to produce, distribute and sell recreational cannabis products within regionally limited model projects.

These products will exclusively be available to adults through designated retail outlets. This initiative aims to assess the impact of a legal supply chain on, inter alia, public health, effects on minors, and the “black market” generally. It remains to be seen how such a pilot project can be implemented. In addition, we posit that it is likely that this second draft legislation concerning regional pilot projects would need to undergo a coordination process with the European Commission and EU Member States through a notification procedure, which could be a procedural hurdle and delay the national legislative process.

The second pillar thus remains still unclear, as its legal feasibility is not yet finally agreed on with the relevant stakeholders. A relevant legislation draft is expected for late 2023. We will endeavor to keep you updated.

What about medical cannabis? There remains a clear legal distinction between medical cannabis and recreational cannabis throughout German legislation (drafts). As Cannabis will to a certain extent not fall under narcotic restrictions anymore, the handling (cultivation, storage, transport, marketing) of Cannabis for medicinal purposes is subject to separate articles of the draft legislation. Cannabis for medicinal purposes remains subject to prescription requirement, only pharmacies are allowed to sell to end-consumers and cultivation as well as trade requires specific prior authorizations. The new respective laws on medicinal Cannabis will potentially allow more stakeholders to cultivate Cannabis for medicinal purposes in Germany, as the current tendering mechanism for limited quantities might be replaced by a (very restrictive) general authorization requirement.