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Germany’s CannaBusiness Community Underwhelmed By Proposed New Laws

GERMANY’S cannabis proposals have been met with a mixed response with many businesses seemingly frozen out of the cannabis club programme and now focused on the ‘scientific’, pilot project.

After months of to-ing and fro-ing with European officials Health Minster Dr Karl Lauterbach yesterday unveiled its twin track approach to cannabis reform.

In the first instance it will initiate a cannabis club programme – similar to those in Spain – with an upper limit of 500 members per association, alongside decriminalisation and the ability to grow your own plants at home.

This leaves little scope for many of the existing German commercial cannabis community which primarily focus on importing product for sale into the medical market.

As for the scale of the pilot projects there is little detail on this to date. And, such a proposed law will need to be approved by the more conservative Upper House of the German parliament; the Bundesrat.

Disappointing For Business

Finn Hänsel, CEO of Berlin-based cannabis company Sanity Group, said: “First and foremost from a community perspective: It’s good that they move, it’s good that cannabis is decriminalised and it’s really good that there is an amnesty program for people formerly prosecuted.

“However, from an entrepreneurial perspective; It’s a disappointment because again, it was only ‘Eckpunkte’ (the White paper) and not the announced draft.

“It’s not good that pilot programmes are regional instead of national, it’s not good that they will start – probably, significantly later than the cannabis clubs, and it looks like companies will not be able to participate in cannabis clubs, which would have been good.

“Also there are still many details missing. For example: where the product should be cultivated for both, social clubs and pilot projects.”

German cannabis healthcare company Bloomwell’s Co-founder and CEO Niklas Kouparanis said: “Decriminalisation is not legalisation which had been the initial focus of the Federal Government when they took power. I hope that is not where it ends.”

The draft law for the first pillar is set to go before the Bundestag later this month, and will not need consent of the upper chamber the Bundesrat – unlike the second pillar of reform.

While this is scheduled for the Autumn and may meet political objection he hopes it progresses quickly adding that ‘decriminalisation without legalisation fuels the illicit market’.

As for the size of the pilot projects, the Government says they will be constructed in such a way as to ‘provide clear data’ to support future reform.

Low Barriers To Entry

He believes the pilot projects will need to be as large as possible and implemented with speed.

“They have the potential to present a big upside for the industry with low barriers of entry for the existing value chain to the medical cannabis industry.”

Sanity Group is currently involved in the pilot projects underway in Switzerland. Here the company initially liaises with a regional municipality and, if the latter is interested, Sanity secures a licence to run a store, whilst committing to monitor and undertake research on the programme’s effectiveness.

In unveiling the new cornerstone paper yesterday Dr Lauterbach and the Food and Agriculture Minister Cem Özdemir spent some time discussing how the European Commission can align with Germany and like-minded nations on continental cannabis reform.

Their position is focused on health protection and eradicating the illicit market saying: “Every fight against the illicit market is a fight for youth protection.”

Going on to say: “This model should provide examples on how we can continue to improve the cannabis framework in the European Union.”

European Commission Reservations

However, it appears the European Commission have yet to be convinced of the scale of cannabis reform initially envisaged by the German Federal Government back in 2021.

Mr Kouparanis added: “We (Germany) are doing the things we can do as permitted by European law. Decriminalisation, a scientific pilot project and we can use that scientific data during this process to demonstrate that prohibition is not working.

“Hopefully we can demonstrate that on the grounds of human rights, youth protection and product safety that what we are doing drains the illicit market and achieves health protection goals – and then that can also be done at a European level.

“While Germany has found this process more complex than initially thought, these measures could help pave the way for a more comprehensive approach to change at a European level, so other countries can follow.”

German cannabis lawyer Kai-Friedrich-Niermann believes momentum is gathering behind a pan-European initiative of like-minded states which include; Germany, Czechia, Malta and Luxembourg.

He said: “My guess is that Germany will present a EU initiative for the legalisation of the commercial route in the EU, so that every EU member state which wants to that can do that on a formal and safe legal basis.”

While he is concerned the pilot projects may take some time to be formulated, he added: “Hopefully the European initiative of like-minded EU-member states will be successful and quicker in its efforts to change the legal EU framework for cannabis, so that the commercial route in parts of the EU can be introduced earlier than it looks like now.”

Cultivation Experts

One German business which is set to benefit from the proposals is market-listed Cannovum, which recently established a sister company Anbau Allianz, which has growing expertise and the ability to supply plants and seedlings to customers.

Its CEO Pia Marten said: “Every journey starts with a first step. We are super happy that there is real progress. Change is slow in Germany and we are confident that this is an important first step to the journey of making Cannabis as a recreational alternative to all adults available.

“It’s also great news for Cannovum AG. We founded the growers alliance to be part of this on-going process. And we will be part of every part of the journey.“

Cannabis Industry Association Reacts To Proposals

Yesterday’s proposals also included the removal of cannabis from Germany’s Narcotics laws, a move which has been welcomed by the German Cannabis Business Industry Association.

Its Managing Director Jürgen Neumeyer, said:  “This also enables progress in the areas of industrial hemp, medical cannabis and in the legal clarification of CBD products.

“We are also pleased that the federal government is campaigning for more flexibility and further development of the EU legal framework in other EU member states and hope for corresponding reforms.

“As the cannabis industry, we will continue to support the federal government and the legislature in the “big steps” announced by the federal ministers Lauterbach and Özdemir.”

Dirk Heitepriem, BvCW Vice President and departmental coordinator for the regulation of luxury goods in the BvCW, said: “It is important that diversity is guaranteed when supplying the model projects.

“Structures must be created that make investments in the controlled cannabis market permanently attractive. In order to effectively push back the black market, a nationwide supply of the model projects by a wide variety of different growers and processors is required.

“In order to prevent self-paying patients from migrating to the cultivation clubs, cannabis as a medicine law must be significantly amended. Medically necessary therapies should always be accompanied by a doctor and the costs of the medication should be reimbursed.”

“The question of the scope of the model projects remains open. Numerous small and medium-sized companies are in the starting blocks, e.g. to set up licensed points of sale (specialist shops), train specialist staff or quality controls and follow-up (track and trace).

“According to the cannabis industry, the widest possible distribution of points of sale and the widest possible variety of controlled products are important in order to noticeably suppress the black market and enable quality controls for consumer protection.”

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