Germany’s highly anticipated draft law for ‘Pillar 1’ of its cannabis legalisation plans has been hammered by industry stakeholders and would-be associations.
The new proposals, published officially for the first time last week, have been accused of significant ‘over-regulation’, which would make it all but impossible for cannabis associations to operate.
One would-be cannabis association told Business of Cannabis its plans have now been put on ice following the publication of the draft law, calling the stipulations ‘crazy’.
Kai-Friedrich Niermann, cannabis lawyer and industry expert, said of the draft bill: “The basic idea of the so-called Pillar 1 is based exclusively on health aspects, namely the protection of children and young people. This is placed above everything else, and leads to a downright health policy alarmism.
“All regulations of the draft are impractical, contradictory in themselves, and significantly over-regulate the consumption and cultivation of cannabis in cultivation associations.”
Location, location, location
Adrian Schöpf is the Co-founder and Managing Director of The Joint Venture, a cannabis association due to be established in Bremerhaven.
The Joint Venture was all but ready to be launched, with Mr Schöpf and his three co-founders planning to send over their application this week, having secured sponsors and established a growing membership.
However, following last week’s publication of the draft bill, plans to launch the association have been put on hold because ‘none of these regulations make any sense’, commercially or operationally.
First among his many criticisms of the proposed regulations were where these cultivation sites can be situated.
According to the draft law: “The pacified property (i.e. land, acreage, greenhouse, building) of a Consortium may not be located, even partially, within a dwelling or other residential building or property.”
This, argues Mr Schöpf, makes operating in easily accessible city locations where the majority of buildings have some form of residential usage ‘a huge issue’.
Subsequently, this means cannabis associations, due to regulations requiring their entire operations to be situated in a single location, will require a relatively large space and will be relegated to ‘industrial zones’, which are ‘super expensive to rent’.
“They’re not in the middle of the cities; they’re in the very outskirts, so even for people to go there, it’s just a hassle. Now, if you think about that, it’s just unmanageable for an association that’s going to be a nonprofit.”
Another key issue, which was repeatedly raised even before the draft bill was officially published, is the need for cultivation associations to be at least ‘200 metres from the entrance area of schools, children’s and youth facilities and children’s playgrounds’.
This exclusion zone also applies to consumption, meaning no cannabis can be consumed within 200 metres of schools, playgrounds, sports facilities or the entrance to cultivation associations.
As Mr Niermann points out, ‘in Berlin, this would easily equal a total ban’.
Furthermore, with a comprehensive ban on advertising, this would make signposting the areas in which consumption was acceptable near impossible, leaving many open to criminal penalties.
Aside from the obvious impracticalities around location, the costs associated with setting up and operating a cannabis association mean membership fees are likely to be so high that few will be enticed away from the illicit market.
Members of cultivation associations are able to receive a maximum of 50g of cannabis each per month for their own consumption if they are over the age of 21, and a maximum of 30g if they are aged between 18 and 21.
For associations with the maximum number of members, 500, this would mean associations are potentially expected to grow up to 300kg of cannabis a year.
Mr Schöpf says that, based on some basic calculations, the set-up and construction costs for a plot able to manage this amount of output would be around €15,000, with monthly operational costs, not including personnel, around €4,000.
The new draft stipulates that associations cannot charge by the gram, and instead must cover their entire costs via membership fees, which they can determine based on their costs.
“No additional fee may be demanded when passing on cannabis. The cultivation associations must cover their own costs and may only demand the statutory membership fees and, if cannabis seeds are passed on to non-members and other cultivation associations, reimbursement of the production costs.”
Members are required to pay two months’ membership costs upfront, in an effort to prevent people regularly switching between associations, and ‘must actively participate in cultivation’.
How and to what extent 500 members are expected to be involved in the cultivation operation is unclear, but Mr Schöpf says he is confident that members ‘don’t want to be part of a gardening club’.
Alongside the initial set-up costs and the energy and irrigation bills, there are additional financial and time commitments necessary.
Mr Niermann explained: “Cultivation associations have numerous documentation obligations and reporting requirements, and must appoint a youth protection officer. Members are divided into two groups, 18–21 years and over. The adolescent group is only allowed to receive THC flowers up to a maximum of 10%.
“With 7 members, for example, all the obligations are rather daunting; with the maximum number of members of 500, one will need at least two full-time employees in addition to the cultivation staff to meet all the obligations.
“In addition to the investment for the cultivation, which is not allowed to make a profit, there are then considerable running costs for the clubs.”
‘This cannot be sound policy’
According to the German government, this law is being introduced to ‘aim to contribute to improved health protection, strengthen cannabis-related education and prevention, curb organised drug crime and strengthen child and youth protection’.
In its current form, both Mr Niermann and Mr Schöpf argue that the draft bill will fail to achieve these goals.
With expectations on members to regularly travel to the outskirts of a city, or out of a city entirely, actively participate in cultivation, and pay a membership fee which could surpass the cost of their average daily consumption, Mr Schöpf expects few consumers to favour this model over the illicit market.
This was echoed by Mr Niermann, who concluded: “It therefore remains to be seen how many clubs will actually take up this option.
“Together with various associations, we are currently pushing for a significant simplification of the draft and the regulations it contains. This health policy alarmism and bureaucratic overkill may well prevent the goals pursued by the law from coming to fruition at all. This cannot be sound policy!”