Last Friday, the German Bundestag has given the green light to legalize cannabis. Adults over 18 would be allowed to possess up to 25 grams of cannabis for personal use, with the option to cultivate up to three plants at home, expectedly from April 1. Moreover, from July 1, licensed not-for-profit cannabis clubs of no more than 500 members would be allowed.
On top of that, part of the CanG law is also dealing with medical cannabis. "Going forward, cannabis will be descheduled and not be deemed a narcotic anymore. This means that no special narcotic prescriptions need to be used by doctors, making it easier to prescribe medical cannabis," explains Timo Bongartz, Chief Commercial Officer of Cannavigia. "Additionally, it can be expected that through the decriminalization, prescribing medical cannabis will also be easier because of destigmatisation."
Cannavigia's software displayed at the German Bundestag last year
New opportunities
For companies interested in the German cannabis market, the development brings along new opportunities. "On the one hand, the medical cannabis market in Germany is expected to further grow. This gives additional possibilities for global producers to export to Germany, as long as they are following pharmaceutical standards like EU-GACP and EU-GMP," Timo says. "That being said, the three local producers in Germany also got the green light to increase their production capacity, so some of the demand will be served by the German producers."
"On the other hand, the CanG law gives companies providing equipment and consulting services revenue potentials," Timo adds. "For the home growers, tents, lights, controllers, sensors, fans, fertilizers, etc., are needed. The same goes for the cannabis social clubs, which are cultivation clubs for their members. These clubs will also need this kind of equipment, as well as services like legal-, compliance- and cultivation support and software services."
Domino effect
According to Timo, several EU countries are closely eyeing Germany and the progress there. "Not only the ones who are already making their first steps in regards to recreational cannabis (like the Czech Republic, Malta, and the Netherlands) but also countries like Poland, Portugal, and Spain. A 'domino effect' can be expected, where Germany is the first domino to fall. Meaning more countries will follow. The first ones are, next to the Netherlands, which is already progressing, the Czech Republic and Malta. Once there is a critical mass of European countries in favor of more progressive cannabis laws, EU law as a whole can also be adjusted to allow free trade of recreational cannabis in the European Union/Schengen region," Timo says.
Companies are also looking closely at Germany as it offers medical cultivators more export potential and equipment and service companies more selling potential. "Next to that, the development in Germany will release further investments into the market as several deals were linked to this milestone. Generally, more funding can be expected for the German and European cannabis market," Timo says.
Bundesrat
Before things are set in motion, the measure still requires review from the Bundesrat, which can still cause some challenges. "Some federal states will push for the Vermittlungsausschuss (Mediation Committee), which will slow the process but does not stop it," Timo explains. "The Mediation Committee is a body that acts between the Bundestag and the Bundesrat. The Mediation Committee consists of 16 members of the Bundesrat and the same number of the Bundestag, who are named according to their parliamentary group strengths. Its task is to find a consensus between the Bundestag and the Bundesrat if laws passed by the Bundestag do not find a majority in the Bundesrat. If the resolutions of the Mediation Committee differ from those of the Bundestag, a new resolution in the Bundestag is required. If the consent of the Bundesrat is required for a law, the Bundestag and the Federal Government can also request that the mediation committee be convened in order to reach an agreement. Critical topics for the Bundesrat members are the amnesty policy as well as the traffic regulations (THC limits, etc.)."
Pilot project
Behind the scenes, plans for the pilot project (Pillar 2) are in the making. "Pillar 2 is planned similarly to in the Netherlands or Switzerland, where growers in regions/municipalities grow for the people in the region and the product is sold in dedicated shops. Here, the whole supply chain should be tested accompanied by field studies. This set of laws will very certainly be Zustimmungspflichtig (requires consent) by the Bundesrat, which makes it harder. We know already from several cities that they want to participate in this pilot project, amongst them Frankfurt, Kassel, Gießen, Fulda, and other big cities."
Paradigm shift
"As long as the current government stays together, the CanG law will come into place. The question is when. I expect a slight delay, that it starts May or June instead of April and for the social clubs to start in August/September instead of July," Timo says. "All in all, we are seeing a paradigm shift in cannabis policy in Europe with Germany creating a domino effect."
For more information:
Cannavigia
www.cannavigia.com