Germany’s next government aims to legalise recreational cannabis

By Sarah Marsh

BERLIN (Reuters) – Germany could become the first European country to legalise cannabis and authorise its sale for recreational purposes, according to a coalition agreement for a new government struck by three parties on Wednesday.

Many European countries, including Germany, have legalised cannabis for limited medicinal purposes. Others have decriminalised its general use, while stopping stopping short of making it legal.

The centre-left Social Democrats (SPD), Green and libertarian Free Democrats (FDP) agreed to introduce legislation during their four-year term to create the controlled distribution of weed in licensed shops.

“We would evaluate the (weed) law after four years for social impact,” the pact read.

Policy-makers and sector specialists have said legalisation could reduce activity on the black market, where there are no quality controls. It could also free police resources spent on prosecuting cannabis use and raise tax revenues for prevention and therapy for addiction.

The German example could inspire other European countries, while the United States of America has already seen a big business opportunity in a trend for legalisation of cannabis whose use increased during lockdowns.

In Europe, the country traditionally associated with cannabis is the Netherlands, where its sale in coffee shops is tolerated, but not formally legalised, meaning the shops source weed from illegal growers.

“Germany would have a pioneer role,” said Florian Holzapfel, founder of German cannabis company Cantourage, which imports weed and processes it for medicinal use. “It would be important for it to be a success story as that would pave the way for other countries to implement similar legislation.”

Legalising cannabis could bring Germany annual tax revenues and cost savings of about 4.7 billion euros ($5.34 billion) and create 27,000 new jobs, a survey published last week found.

The European market is projected to grow to 3.2 billion euros by 2025, up from 403 million euros at the end of 2021, the European Cannabis Report by research firm Prohibition Partners found.

Such growth could boost big U.S. and Canadian cannabis firms, as well as the fledgling German industry.

Holzapfel, however, said it would hard for Germany to become a big producer nation given high overheads and inclement weather.

(Reporting by Sarah Marsh; Additional Reporting by Stephanie van den Berg in Amsterdam and Philip Blenkinsop in Brussels; editing by Barbara Lewis)