A study estimates that the legalization of cannabis in Germany will bring public budgets 4.7 billion euros annually, in addition to additional revenue. However, the road can still go uphill. The article by El Pais
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In November 2021 and when it was already clear that the federal government would submit a law to the Bundestag to legalize the consumption and possession of marijuana in the country, the proposal of which was accepted on August 16, a team of researchers led by Justus Haucap, professor of economics at Heinrich, decided -Heine University of Düsseldorf, published a study that delighted German Finance Minister Christian Lindner, leader of the Liberal Party, who along with the Greens was one of the promoters of the idea.
GERMANY’S POTENTIAL GAINS FROM THE LEGALIZATION OF CANNABIS
The Düsseldorf researchers – writes El Pais – have created an economic scenario based on a consumption of 400 tons of cannabis per year in the country, a scenario that would bring public budgets around 4.7 billion euros in revenue and savings every year. In order to determine possible capital inflows into the state, both expected tax revenues and costs for legal cannabis shops and relief for the police and judiciary were included. According to calculations, the tax on cannabis alone would bring the state treasury 1.8 billion euros annually.
In addition, additional revenue would come from corporation tax, trade tax and VAT totaling around 735 million euros as well as from social security contributions (526 million euros) and wage tax (280 million euros), which would be generated by around 27,000 legal jobs in the cannabis industry.
Above all, controlled sales would put an end to the illegal black market and also enable better protection of minors and more effective addiction prevention. Last but not least, the coalition government believed it was wrong to criminalize millions of marijuana users.
“The market has been around for a long time. The only thing that doesn’t exist is taxation,” said economist Justus Haucap, who estimated the price at 10 euros per gram of marijuana.
COMPANIES ALREADY DREAM BIG…
The announced bill to legalize the use and possession of marijuana has electrified a small group of companies that have been trading and making money from the production of marijuana for therapeutic purposes since 2017. These companies produce about 2.4 tons of weed every year.
“In terms of population, Germany would be the largest country in the world to allow the sale of cannabis,” said Constantin von der Groeben, CEO of Demecan, a local grower. It’s a great opportunity for us.” Lars Müller, meanwhile, announced that his company will create the so-called Starbucks of Marijuana, a chain that will offer the full range of weed products. “We want to create a chain with the same level of quality across Germany,” said Müller, who works as managing director of Synbiotic.
…But here you can find out what the bill provides and what marijuana clubs are
But the law passed by the government, which must be discussed in the Bundestag and the Bundesrat before it comes into force, has put an end to the companies’ millionaire dreams for the time being and caused frustration for a new legal reason: the law does not allow free sales and restricts consumption on so-called marijuana clubs.
Associations must be organized as a cooperative, require approval and may have a maximum of 500 members. Each member can purchase a maximum of 25 grams per day and 50 grams per month. Young people between the ages of 18 and 21 are allowed to consume a maximum of 30 grams per month. Plant cultivation is “communal” and “non-commercial” and is financed by a membership fee. Greenhouses must be burglar-proof and equipped with a privacy screen.
Marijuana clubs, also known as “grow clubs,” are not allowed to advertise or sponsor. Additionally, smoking weed is not permitted on the premises, only within 200 meters. This also applies to schools, facilities for children and young people, playgrounds and publicly accessible sports facilities.
In addition, every club must develop a health and youth protection concept and appoint a prevention and addiction manager who is trained and regularly takes part in refresher courses.
THE RESISTANCE OF THE EUROPEAN COMMISSION
In reality, the coalition government had envisioned a much larger project: the nationwide legal sale of cannabis in specially authorized shops. But although the plans initially seemed surprisingly confident, they failed due to resistance from the European Commission. According to the current legal situation, the distribution and sale of the drug within the EU must be approved, but the Commission has no say in non-commercial home cultivation.
“Now it’s about implementing Plan B,” said Niklas Kouparanis, CEO of the Frankfurt start-up Bloomwell. “We want to provide cannabis clubs with things like plant growing equipment, cannabis seeds and infrastructure.” According to Kouparanis, thousands of clubs are needed to meet the demand for cannabis: “The focus will be on metropolitan areas.” Other start-ups also see cannabis clubs as possible source of income until the second phase of legalization.
THE MODEL REGIONS IN WHICH LEGAL SALES WILL BE ATTEMPTED
In addition to marijuana circles, the federal government announced a second change: In the future, there will be model regions in which the legal sale of cannabis will be tested. Whether and when this will work remains to be seen. Cities such as Frankfurt, Offenbach, Berlin, Cologne, Dortmund and Münster have already expressed their interest in becoming model regions. Health Minister Karl Lauterbach wants to present a regulation in the fall that will enable the sale and trading of marijuana in authorized specialist shops in these model regions.
“We look forward to the planned second law to implement scientific pilot projects for the controlled sale of marijuana in specialist retailers in Germany,” said Thilo Grösch, managing director of the Sanity Group, a Berlin company that specializes in the production of medical marijuana. “In our view it is of the utmost importance that this is tabled as soon as possible after Parliament’s summer recess so as not to waste any further time.”
Then the dance of millions will begin in Germany, but the last word will be Minister Lauterbach, a social democratic politician who promised a lot and kept little.
(Excerpt from the foreign press review published by eprcomunicazione)
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