Is the cannabis business a hefty source of income or health hazard? Germans are excited about the coming legalization

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The new German coalition government wants to legalize cannabis for consumption. Soon, hemp could be freely sold in licensed stores in Germany. While the industry is hoping for hefty profits, critics warn of health hazards and false hopes.

Cannabis business means possession with impunity. So is it worth it? Will it become a sparkling source of income or health hazard? Find out what the sentiment is in Germany below.

Planned legalization

Political position of all 3 German coalition government parties: possession of all drugs with impunity

▶ The new German coalition government is planning the legalization of cannabis for consumption: With the plans of the SPD, Greens and FDP, Germany is not only facing a historic step in drug policy. 

▶ Liberalization should also open a legal mass market for the drug, for which manufacturers are already warming up. The industry senses the big business and advertises with potential revenue in the billions for the state in the course of legalization. The police union, on the other hand, warns that illegal trade will only really flourish then.

Since 2017, when cannabis was allowed for medical purposes such as pain relief in the seriously ill, the substance has experienced a boom in Germany. Start-ups have brought out more and more legal lifestyle products such as hemp spreads, hemp seed oils, hemp teas, and influencers are promoting CBD oils. But while in 2017 it was a matter of a few tons of medical cannabis for seriously ill patients, it is now about much larger quantities: Industry experts estimate the market for illegally sold cannabis in Germany at hundreds of tons per year.

Companies have great hopes for good cannabis business

▶ Cannabis is particularly popular with young Germans: According to data from the Federal Center for Health Education, a good ten percent of 12 to 17-year-olds nationwide have already consumed cannabis, and almost half of 18 to 25-year-olds (46.4 Percent).

▶ According to the coalition agreement, the new German coalition government wants to introduce a “controlled distribution of cannabis to adults for consumption in licensed shops”. This would “control the quality, prevent the transfer of contaminated substances and ensure the protection of minors,” it says. In taking this step, the parties also keep a back door open: The planned law should be reviewed after four years for “social effects”.

Companies that already have a license to grow medical cannabis from the state cannabis agency are now hoping for good business: Tilray and Aurora from Canada and the German company Demecan, which has a large production facility in Ebersbach near Dresden. In 2019, the three companies were allowed to grow 2.6 tons of medicinal cannabis annually in this country.

Hemp Association in Germany speaks of a “milestone in drug policy”

“We are able to ramp up our production within a short period of time and, in parallel with the medicinal product cannabis, also produce luxury goods. It is a “gigantic growth opportunity”. However, legalization must be closely linked to educational work and the protection of minors. We need high quality standards in production and controlled delivery.”

cannabis business
Cornelius Maurer, Managing Director of Demecan

There is great business opportunities with the liberalization. Tilray produces tons of medical cannabis in a facility of around 12,000 square meters in Neumünster (Schleswig-Holstein). This means that our production capacities are nowhere near exhausted. We are in a position at very short notice to significantly increase production in Neumünster and to recruit the necessary staff.

cannabis business
Sascha Mielcarek, Managing Director of Tilray Europe

Legalization could not only get the drug off the black market, but also bring high revenues to the state. It is a milestone in drug policy. A study by economist Justus Haucap for the association recently said that liberalization through additional tax revenue and social security contributions as well as savings in criminal prosecution and justice would bring the tax authorities a financial advantage of at least 4.7 billion euros per year.

cannabis business
Justus Haucap, Deutsche Hanfverband

Criticism from the CSU and the police union

▶ A cannabis tax alone would therefore accrue 1.8 billion euros annually to the state. Haucap, who conducts research at Heinrich Heine University in Düsseldorf, expects 27,000 new jobs in the cannabis industry. “The cannabis ban policy has failed and has not been able to curb drug use,” he says. Precisely because cannabis consumption can be harmful to health, the black market should be under state supervision.

▶ Conservative politicians oppose the legalization of cannabis, which can damage brain performance. The Federal Drug Commissioner Daniela Ludwig (CSU) warns of a dam break for drug and addiction policy. The signal that cannabis is socially acceptable is dangerous. It is estimated that almost every tenth cannabis user becomes dependent, according to the drug commissioner’s annual report.

▶ The German Police Union has also expressed criticism. “The profits that trade and the state want to achieve make cannabis considerably more expensive,” said Federal Chairman Rainer Wendt. “The illegal trade in cheaper products will flourish, because only the wealthy can meet their needs in pharmacies, children, young people and low-income earners will continue to run to the dealer around the corner.”

Spain

In the southern European country, marijuana can only be grown in special cannabis clubs, but the trade has been decriminalized.

USA

The United States has the bizarre situation that cannabis is federally banned, but not in 19 states. There, however, the DEA drug police largely leave consumers and dealers alone. The “More Act”, which has not yet been passed, provides for largely general legalization and a tax of five percent.

Portugal

Another misunderstanding, because cannabis is not allowed in the Iberian state. Possession is just not severely punished. However, caught stoners have to compete in front of a kind of addiction commission, among other things.

Netherlands

Kiffer classic coffee shop. Contrary to what is often assumed, cannabis is not legal in Holland, it is only tolerated. However, since the production is prohibited, there are often problems with the drug mafia.

Georgia

One of the few European countries where the drug is legal.

Canada

one of the pioneers in legalization. Since October 2018 you can smoke weed to your heart’s content in the country.

Australia

Your protest for “we can-nabis” was only partially answered. Only around the capital Canberra is the possession of weed and Co. allowed, but not in the other parts of the continent.

Uruguay

The small country on the edge of South America was the first state in 2013 to allow the trade and use of weed. The declared goal of the government was to weaken the drug cartels, which is why the state controls prices and cultivation.

Uganda

Although cannabis is illegal in the country, it produces large quantities of the medicinal variant for export – which in turn has been allowed by the relevant ministry. A total of five African countries, including Rwanda and Lesotho , are growing the plant in high-tech greenhouses for export.

Thailand

The Pan Ram Weed Festival in northeast Buriram. The state was the first in Southeast Asia to legalize cannabis for medicinal purposes in 2018. Marihuna can be legally prescribed in around two dozen other countries. Including in Germany , Portugal , the Scandinavian countries and parts of South America.

South Africa

So far it is the only country on the continent where marijuana is completely legal – the South African constitutional court ruled that two years ago.

Netherlands as a bad example?

The coalition gives the impression of getting things under control with a cannabis control law, complains Wendt. “That is pure wishful thinking, especially since the federal government is neither responsible for controls nor for the protection of minors.” The example of the Netherlands, which is liberal when it comes to cannabis, has shown that illegal cultivation and trade, import and distribution are being strengthened and criminal gangs can afford violent conflicts over market shares.

The industry association cannabis industry sees it differently.

The coalition agreement is a good basis for reforms, says President Stefan Meyer. “Legalization errors by other countries should be avoided as far as possible in the upcoming processes.”

Expaturm
Expaturmhttps://www.expaturm.com/
Expaturm aims to help educate Expats in Germany on key issues that they will have to deal with while living in Germany by providing everything you need to know about Banking, Healthcare, Lifestyle, and Housing in Germany

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