German Cannabis Legalization Deemed Impracticable by Industry Insiders

The highly anticipated bill for the “first pillar” of cannabis legalization in Germany has faced widespread criticism from industry insiders and potential Cannabis Clubs.

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Germany Proposes New Regulations

The newly proposed German cannabis regulations, officially published for the first time last week, have been accused of significant “overregulation” that would make the operation of cannabis associations in Germany practically impossible.

An informal Cannabis Club told Business of Cannabis that their plans had been put on hold following the bill’s publication, describing the provisions as “crazy.”

Kai-Friedrich Niermann, a cannabis lawyer and industry expert, commented on the bill, saying, “The basic idea of what is called the first pillar is solely based on health aspects, namely the protection of children and youth. This aspect is prioritized above everything else and leads to a pure and simple health policy alarmism.”

“All provisions of the bill are unworkable, contradictory, and significantly overregulate cannabis consumption and cultivation in culture associations.”

Location, Location, Location

Adrian Schöpf is the co-founder and CEO of The Joint Venture, a planned cannabis association to be established in Bremerhaven, Germany.

The Joint Venture was almost ready to launch, with Mr. Schöpf and his three co-founders planning to submit their application this week, after securing sponsors and recruiting an increasing number of members.

However, following the publication of the bill in Germany last week, the association’s launch plans were suspended because “none of these regulations make sense,” whether from a business or operational perspective.

One of the many criticisms of the proposed regulations relates to the location of cultivation sites.

According to the bill, “The property (i.e., land, area, greenhouse, building) of a consortium cannot be located, even partially, inside a residence or another residential building or property.”

According to Mr. Schöpf, it is, therefore, very difficult to operate in easily accessible cities in Germany, where the majority of buildings are used for residential purposes.

Single Location Regulations Present Barriers in Germany

Consequently, this means that cannabis associations, due to regulations requiring all their operations to be located in one place, will need a relatively large space and will be relegated to “industrial zones,” which are “extremely expensive to rent” in Germany.

“These areas are not located in the heart of cities but on the outskirts, so even for people who go there, it’s a real hassle. Now, if you think about it, it’s simply unmanageable for a nonprofit association.”

Another key issue for Germany, which was raised repeatedly even before the official publication of the bill, is the requirement for cultivation associations to be at least “200 meters away from school entrances, facilities for children and youth, and children’s playgrounds.”

This exclusion zone also applies to consumption, meaning that no cannabis can be consumed within 200 meters of schools, playgrounds, sports facilities, or the entrance to cultivation associations.

As Mr. Niermann points out, “In Berlin, this would easily equate to a total ban.”

Furthermore, with the total advertising ban in Germany, it would be virtually impossible to indicate areas where consumption is allowed, exposing many individuals to criminal penalties.

Costs Will Be Elevated in Germany

In addition to the obvious challenges related to location, the costs associated with establishing and operating a cannabis association in Germany mean that membership fees are likely to be so high that few will be tempted to move away from the illicit market.

Members of Cannabis Clubs can receive a maximum of 50 grams of cannabis per month for personal consumption if they are over 21 years old, and a maximum of 30 grams if they are between 18 and 21 years old.

For associations with the maximum number of members, which is 500, this means they could cultivate up to 300 kg of cannabis per year.

According to Mr. Schöpf, based on basic calculations, the costs of setting up and constructing a plot capable of handling this production quantity would amount to approximately 15,000 euros in Germany. The monthly operational costs, excluding personnel, would then be around 4,000 euros.

Membership Fees Only

The new project stipulates that cannabis associations in Germany cannot charge per gram and must cover all their costs through membership fees, which they can determine based on their costs.

“No additional fees can be charged when distributing cannabis. Cultivation associations must cover their own expenses and can only demand statutory contributions and, in the case of transferring cannabis seeds to non-members and other cultivation associations, reimbursement of production costs.”

Members are required to pay two months’ membership fees in advance to prevent them from frequently switching between associations, and “must actively participate in cultivation.”

It is not clear exactly how and to what extent the 500 members are supposed to participate in the cultivation operation, but Mr. Schöpf is convinced that members “do not want to be part of a gardening club.”

In addition to the initial installation costs and elevated energy and irrigation bills in Germany, other financial and time commitments are required.

Mr. Niermann explains, “Cultivation associations have numerous documentation and reporting obligations and must appoint a youth protection officer. Members are divided into two groups, 18-21 year-olds and older. The 18-21 year-old group is only allowed to receive THC flowers up to a maximum of 10%.”

“With just 7 members, for example, all the obligations are already quite discouraging; with the maximum number of 500 members, at least two full-time employees in addition to the cultivation staff will be required to fulfill all obligations.”

“In addition to the investment for cultivation, which is not allowed to generate profits, there are considerable operating costs for the clubs.”

“This Is Not Good Policy” for Germany

According to the government in Germany, this law is being introduced to “contribute to better health protection, strengthen education and prevention regarding cannabis, curb organized drug-related crime, and enhance child and youth protection.”

In its current form, Mr. Niermann and Mr. Schöpf assert that the bill will not achieve these objectives.

Mr. Schöpf expects members to regularly travel to the outskirts or outside of a city, actively participate in cultivation, and pay a membership fee that could exceed the cost of their average daily consumption.

Mr. Niermann echoed this viewpoint by concluding, “It remains to be seen how many clubs will choose this option” under the proposed regulations for Germany.

“In collaboration with various associations, we are currently striving to significantly simplify the project and the regulations it contains. This health policy alarmism and bureaucratic excess could well prevent the goals pursued by the law from being achieved. This is not good policy!”

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(Featured image by Felix Mittermeier via Pexels)

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