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German Marijuana Legalization V2.0 Goes Into Effect

2024-07-04

The second part of Germany's cannabis legalization bill, the Regulation on Self-Cultivation of Cannabis by Cultivation Associations, will come into force today, July 1, allowing for the opening of cannabis clubs, where people can legally obtain cannabis.


Cannabis clubs can apply for licenses

With the establishment of cannabis clubs, the cultivation of larger quantities of cannabis is now allowed. As a second step towards the partial legalization of cannabis in Germany, clubs that want to produce more cannabis for their own use will be allowed to start producing cannabis this Monday. However, strict conditions must be met, such as applying to the authorities and making other preparations.

The official name "cultivation associations" is now allowed. These associations are similar to adult clubs and allow up to 500 members to grow cannabis and supply it to each other for personal consumption. They must be non-commercial in nature, i.e., organized as a registered association or cooperative.

The first step before cultivation is allowed is to apply for an official license. For example, the number of members, the location and size of the cultivation area, the expected harvest, security measures and a health and youth protection philosophy must be specified.

Members of the association must also meet certain criteria. They must have lived in Germany for at least six months and have been a member of the association for at least three months. According to the Federal Ministry of Health, this is to prevent drug tourism. In addition, members of the club's board of directors must not have a criminal record for drugs. The growing area must not be a residential building or have any conspicuous signs. Advertising is prohibited, as is spending money 100 meters around the site and entrances. A distance of at least 200 meters must be maintained from schools, playgrounds and other facilities for children and young people.

To obtain cannabis, consumers must pick it up in person and present their membership card and official photo ID. Only pure marijuana is allowed: dried flowers and near-flower leaves or secreted resin, known as hashish. Mixing with tobacco, nicotine or food is prohibited. Clubs must provide information on weight, variety, tetrahydrocannabinol (THC) content and risks. No purchase price may be charged; clubs shall be funded through membership fees. Each member may distribute up to 25 grams of marijuana per day and up to 50 grams per month.

The coming weeks will show just how hot the marijuana clubs are. Federal Commissioner for Drugs Burkhard Blienert (SPD) said that there is a "high level of interest" in the clubs that are being created and prepared. According to this, there could be clubs in the high three-digit number. The Federal Ministry of Health has estimated the costs in the draft bill, assuming that 1,000 clubs could be created in the first year and 500 per year from the second to the fifth year.

Club regulations have a lot of questions

But for many cannabis club founders across the country, the law currently raises more questions than it answers.

Questions remain about which authority will be responsible for approving clubs or regulating their activities. Investors and club organizers are also unsure how quickly the law will be approved, with some speculating that it could be as late as 2025 before they can legally begin operations.

In theory, cannabis clubs will begin operating next Monday. Under federal law, cannabis clubs could begin activities as early as July 1st. These regulated associations will be allowed to have up to 500 members, each of whom can grow and distribute up to 50 grams of marijuana per month.

However, as a practical matter, cannabis clubs can submit applications for approval on July 1, and then must wait to receive a permit before they can begin growing cannabis.

Susanne Schneider, the Liberal Democrats' health policy spokeswoman, criticized what she sees as unnecessary delays in rolling out the new rules. She told the Rheinische Post, "While applications can be submitted from July 1, it's not at all clear when licenses will be granted and when cannabis will actually be available on the market - it could take months."

Under the marijuana legalization law, regulators have up to three months to approve or deny a club's application. But how and to whom the application will be submitted remains an open question, depending on where the club is located.

Marijuana regulation will be zoned

What's even more confusing is that in Germany, such regulations are decided by state agencies. According to the law, regional governments, state agencies for nature, environment and consumer protection, and the Ministry of Agriculture will be responsible for supervising clubs and enforcing rules for cannabis cultivation and sales.

However, it is not clear where cannabis club organizers should send their applications in each case. In Brandenburg, applications will be reviewed by the state's Office for Occupational Safety, Consumer Protection and Health (LAVG), but according to the Berliner Zeitung, the relevant authorities in Berlin remain unclear.

Sascha Siebenäuger, president of Sieben25, an upcoming cannabis club, said information has been scarce, but he doesn't blame the authorities. In an interview with the Berliner Zeitung, Siebenhauger pointed out that there is currently no fair and regulated model for the sale of marijuana in Germany. With that in mind, he expects some obstacles: "The club's task is to be flexible and reach an agreement with the authorities," he said. "Whenever that materializes, the focus will be on controlling distribution."

Due to the uncertainty surrounding the process of registering as a club, Siebenäuger has not yet opened up membership to the public, although he has a property ready to go, where he soon intends to grow cannabis.

But the uncertainties haven't stopped other clubs from accepting paid memberships, which are eagerly signing up ahead of the expected rush. Some associations in Munich reportedly received thousands of applications in April, when Germany's cannabis legalization was in the early stages of taking effect.

International capital bets on German market

Organigram Holdings, a cannabis producer from Canada, is investing 14 million euros (about 109 million yuan) in Sanity Group, a cannabis operator headquartered in Berlin, Germany, as it seeks to expand its business in the country.

Organigram CEO Beena Goldenberg emphasized the company's expansion operations in Europe. This has the potential to provide us with an avenue to launch our own brands and industry-leading IP products through Sanity Group's extensive distribution network," he said. The relationship also enhances our revenues in Europe through a significantly expanded commercial agreement."

Under the agreement, Organigram and Sanity Group have expanded their supply agreement to increase production and commercialize Organigram's brands and intellectual property in Germany. Sanity Group is known to distribute cannabis products to more than 2,000 pharmacies in Germany and works with approximately 5,000 physicians in Germany.

Germany's cannabis law has come into effect on April 1, 2024, making it the second country in the Group of Seven to legalize and regulate adult use of cannabis nationwide, and Germany is Europe's largest economy.

Under Germany's approved cannabis-related laws, adults are allowed to possess up to 25 grams (0.88 ounces) of cannabis. Additionally, the law allows for the cultivation of up to three marijuana plants per household and removes marijuana from the list of narcotics, setting the stage for "cannabis clubs" to open later this year. In addition, medical marijuana will no longer require a doctor's prescription.

Germany expects total sales to reach about $1.5 billion in 2024, growing to about $3.7 billion by 2027, according to BDSA estimates. This significant growth is driven by a 30-50% increase in medical marijuana prescriptions since April 1, 2024. The success of the German cannabis industry can be a catalyst for more uniform and progressive cannabis legalization and regulation across the continent.








 
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