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Hard Value Fund

Cannabis Legalisation in Germany - The Key Points

Updated: Jun 19, 2023

At the beginning of April 2023, the german Federal Minister of Health Karl Lauterbach and the german Federal Minister of Food and Agriculture Cem Özdemir met for a joint press conference to discuss the legalisation of cannabis (also: weed, pod, hemp). Both politicians see legalisation as a milestone in German history and argued vehemently for decriminalising its use as a stimulant.

But what exactly will change for private individuals? What is the international legal situation on the subject of cannabis (hemp) and what impact will cannabis legalisation have on the German economy? You will find the answers and further information on these topics in the following report.

Hemp plant held by hands

The Government's Arguments Pro Legalisation

According to the two ministers, the number of cannabis users has been steadily increasing for several years. Especially in the younger generation, cannabis became very popular. According to a survey by the Federal Centre for Health Education, every eleventh person aged 12-17 had already used cannabis. In the age group of 18-25 years, the share of young adults with experience of cannabis use is even more than 50%.

This trend is also reflected in the domestic crime statistics. In the press conference, Lauterbach pointed out that the number of drug-related offences has been increasing every year since 2011. These statistics show that the previous cannabis control policy of the last few years has failed and that a mere tightening of criminal law would not be a solution for politicians. Legalisation could help to reduce the black market, increase the protection of minors and protect consumers from contamination.

Cornerstones of German Cannabis Legalisation

During the press conference, Lauterbach and Özdemir also published a key points paper of the planned legalisation. Planned in particular is:

  • A minimum age of 18 years for the acquisition and consumption of cannabis

  • Self-cultivation of a maximum of 3 female cannabis plants per person

  • Personal consumption of cannabis is a maximum of 25g

  • Establishment of so-called "cannabis clubs

  • Regional model projects to simulate commercial supply chains

  • Stronger prevention work among young people to avoid the use of cannabis

The purpose of legalisation is to make the use of cannabis safer and to curb the black market. The key points paper is a further step after cannabis legalisation was already agreed in the coalition agreement in 2021.

Implementation of a 2-Pillar Model

The implementation of cannabis legalisation is taking place in a 2-pillar model, as the ministers call it.

The first pillar - or the "fast pillar" as Lauterbach calls it - is to bring about decriminalisation as quickly as possible as a starting point. In particular, non-profit associations, so-called "cannabis social clubs", are going to be authorised to distribute cannabis in small quantities to their members. Furthermore, the self-cultivation of a maximum of three female flowering plants per person - under consideration of the protection of children and young people - is to become legal.

The second pillar is called the "model project". During a project period of five years, companies are going to be allowed to produce, distribute and sell in specialised shops to adults in a licensed and state-controlled framework.

What can be Understood by the So-called "Cannabis Social Clubs"?

The "cannabis social clubs" are described by Lauterbach as an "intermediate step towards free sale". They are registered as associations (e.V.) and are subject to German association law.

Members pay a monthly fee and use it to finance the communal cultivation of cannabis within the club. Here, too, as in home cultivation, a maximum of three female flowering cannabis plants may be planted per association member. Each member has a monthly supply limit of 50g of cannabis. For those under 21, this limit is 30g.

Furthermore, cannabis social clubs are subject to special regulation and control. Authorities are supposed to monitor whether, for example, the ban on dispensing cannabis to under-18s and the principle of dispensing only to club members are observed.

International Legal Situation

The legal framework for cannabis (hemp) is complex, both within the EU and in the rest of the world, and varies from country to country. While some countries, such as the Netherlands, have a liberal attitude towards cannabis since 1976, in other countries possession and consumption is wholly or partially illegal.

Under international law, cannabis is also illegal, as it is on the United Nations list of "controlled substances". However, there are efforts to amend international drug treaties to facilitate access to medical cannabis in any case.

In 2018, there was an impairment of securities trading in Germany due to cannabis regulation in Luxembourg. Various cannabis shares had to be suspended from stock exchange trading because their settlement via the depository in Luxembourg was temporarily not possible.

Positive Side Effects

Besides the social and medical aspects of legalisation, the economic component also plays a significant role. The legalisation of cannabis could have an impact on the economy in many ways.

Due to the decreasing black market business, it can be assumed that new - legal - jobs will be created. This in turn leads to higher social security contributions (pension as well as health and long-term care insurance) and higher income from wage tax.

In addition, cannabis can be used as a raw material for a variety of products, e.g. as a basis for cosmetics or in the food industry. In the food industry, cannabis is particularly used for the production of edible products (edibles) such as sweets, pastries and drinks that contain THC or CBD and offers alternative methods of consumption.

Growth Prospects of the Global Cannabis Market

The global cannabis market has experienced remarkable growth in recent years and is expected to expand further in the coming years - according to forecasts by approx. 24% p.a. until 2027.

Growth drivers are rising acceptance of medical cannabis and the increasing legalisation of recreational cannabis in various countries. The demand for therapeutic cannabis such as oils, capsules and edibles (e.g. cannabis chewing gums) is also increasing.

global growth cannabis market until 2027

Why Might Established Tobacco Companies Particularly Benefit from Cannabis Legalisation?

Established tobacco companies started to invest in the cannabis market early on - a calculation that could work out for Altria, Phillip Morris International, etc:

1. Diversification of business: established tobacco companies have decades of experience with tobacco products. With the legalisation of cannabis, they can expand their business to a new product category and thus diversify their offerings. Many tobacco companies are already invested in cannabis through subsidiaries.

2. Existing infrastructures: Tobacco companies already have established infrastructures for manufacturing, storage and distribution of tobacco products. These could also be used for cannabis products.

3. Experience in dealing with regulations: Tobacco companies have experience in dealing with government regulations and can also use this knowledge in complying with cannabis regulations.

4. Brand awareness: tobacco companies, such as Altria, Phillip Morris International, etc., have high brand awareness, which can help gain consumer trust.


The cannabis market has great potential in Germany with its approx. 84 million inhabitants. Tobacco companies have already invested heavily in this segment and could particularly benefit from legalisation.

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