MORE details of Germany’s proposed bill to regulate adult-use cannabis clubs have come to light a week after the first draft of the highly anticipated legal framework was submitted to the ‘departmental vote’.
Early information published in local media suggests that Germany’s proposed cannabis clubs will likely be purely ‘cultivation associations’, with consumption of cannabis banned anywhere within a 250-metre radius.
While the bill’s proponents say it continues to represent the key principles of the traffic light coalition’s original vision for a fully regulated market, industry insiders suggest it has not only pushed back full legalisation by around a decade, but it could also ‘empower’ the illicit market.
Alephsana’s Co-Founder and Managing Director Boris Moshkovits told Business of Cannabis: “If you really think it through, it’s just a political gesture. It’s giving in to the weed mob, it’s catering to the activists, and it’s not business friendly at all.”
New details
At the end of April, the Health Minister Karl Lauterbach presented the first draft law for the planned legalisation of cannabis to the so-called ‘departmental vote’.
This stage sees the bill sent to other ministries, enabling them to pore over the details with a fine-tooth comb before holding an internal approval vote, meaning its contents are still subject to change.
Only then can the bill be moved up the legislative food chain to the Bundestag and Bundesrat, with the traffic light coalition hoping the bill will be passed into law by the end of the year.
Although draft laws at this phase are not usually made public, a number of details have since made their way into the mainstream press.
https://businessofcannabis.com/germanys-cannabusiness-community-underwhelmed-by-proposed-new-laws/
According to the Deutsche Presse-Agentur (DPA), which says it has access to the draft, Mr Lauterbach wants the clubs to be strictly regulated ‘cultivation associations’, not ‘pothead clubs’.
Consumption will be prohibited within 250 metres of the clubs, schools, daycare centres, playgrounds, and youth and sports facilities, and be banned between 7am and 8pm in pedestrian zones. It is also understood that federal states can set their own minimum distances.
Clubs must also report how much cannabis is produced, sold or destroyed each year, including what their respective levels of THC and CBD were, and what their current stock levels are.
Each club must also produce a ‘health and youth protection concept’, and appoint a dedicated officer, who must be trained and attend regular refresher training courses.
Not business-friendly
Regardless of the finer details of the new German legalisation-lite strategy, Mr Moshkovits believes the move will have a transformational impact on the country’s current ‘pre-rec’ market.
He likened the move to the German government’s recent decision to shut down three functioning nuclear power plants despite being in the midst of an energy crisis, arguing that they are simply ‘catering to the loudest group, the activists’.
“This is empowering an illicit system, even though politicians may not realise that yet. There will be a lot of activists starting their own clubs, real growing aficionados who are in it for the cause. And also there’s going to be a lot of people who will start these clubs for criminal profit.”
For businesses, particularly those who have spent the past year positioning themselves to take advantage of the upcoming adult-use market, Mr Moshkovits says ‘their business models have just evaporated; they have no reason to exist right now’.
He also suggested that legalisation in Germany as a full-blown commercial model ‘is probably postponed for the next ten years, if not forever’.
The second pillar of Germany’s upcoming legislation, the five-year pilot projects due to be discussed after the summer break, will take ‘a minimum of seven years’ to develop into a full market, he argued.
Not only will the opt-in process for individual states and associated bureaucracy lead to ‘all kinds of lawsuits that will cripple the process altogether’, but the necessarily small size of these pilots to ensure they can be effectively managed and controlled will mean they ‘are most likely unprofitable’.
A potential boon for medical cannabis
While Germany’s adult-use hopefuls are now largely left out in the cold, the developments could yet provide a boon for Germany’s medical cannabis market, already the largest in the world.
Speaking at this year’s Cannabis Europa London during a session focusing on the increasingly blurred lines between the medical and adult-use markets, The University of London’s Dr Kojo Koram said: “When you have the creation of a commercial industry without the correct legal framework, you can see the market just be taken up by the medical cannabis industry with existing infrastructure, meaning there is a huge barrier to entry for new companies.”
When home cultivation is initially brought in, Mr Moshkovits argues that the medical cannabis market could lose around 30% of patients.
“So, for businesses it’s become much more difficult. Medical businesses can be successful, though. Initially, we will see an initial decrease in patients and flower, but an overall increase because of the stigmatisation.”
Those who are currently reimbursed in the medical market, roughly a third of patients, are likely to continue using their current service. However, those who currently pay out of pocket may turn to cannabis clubs in their droves.
Avicanna’s CEO Aras Azadian, who also spoke at Cannabis Europa, agreed that a significant percentage of the current medical market in Germany were “just people that want to smoke weed legally.”
However, he argued that for actual patients, Germany’s move away from a commercial market was a positive step.
“Some people won’t like me saying this, but when I saw that Germany was taking a step back from rec, I thought that was fantastic for patients,” he said.
“There’s no medical professional that would like the idea of a paediatric epilepsy patient picking up their product from a dispensary.”
Bloomwell Group’s CEO and Co-Founder Niklas Kouparanis told Business of Cannabis he believed the ‘biggest news here is the likely reclassification of cannabis as a non-narcotic, which we expect to lead to tremendous and unprecedented growth for Germany’s medical market’.
The group’s other Co-Founder Anna-Sophia Kouparanis added: “Reclassification will result in an expansion of patient access and ease of regulations for prescribing doctors and medical operators in the space.
“In addition, cannabis offered in pharmacies will likely be less expensive than cannabis from the highly regulated, members-only cannabis clubs. Under reclassification, the medical cannabis market will be more sustainable and attractive to both prospective patients and medical professionals than ever before.”
However, after cannabis is introduced to the population at large, the de-stigmatisation could lead to a dramatic upswing in patients, which Mr Moshkovits suggests could jump from 300,000 to around 1 million in the next ‘two to three years’.
“I do see the potential of more patients, and these patients will be asking for formulations and other modes of delivery. This is where we see ourselves. I believe our business will grow.
“I see the medical market having a more important role in consistent quality, controlled and regulated supply, because it’s the only regulated market.
“The point should be that the patient supply should not be endangered by the new law. What we have established we should not be destroying… Patient empowerment is having the full option of all therapies and the best possible quality accessible in a legal system.”
