Germany’s incoming governing parties formally agree to legalize potential $5 billion cannabis market

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Bethan Rose Jenkins, Cannabis News Writer/Editorial

On Wednesday, November 24, the leaders of Germany’s future governing parties confirmed a formal agreement to legalize cannabis for recreational purposes.

Once they assume power, the governing coalition which constitutes the Greens, the Social Democratic Party of Germany (SPD) and the Free Democratic Party (FDP) – vow to advocate for more widespread drug policy harm reduction efforts.

“We are introducing the controlled supply of cannabis to adults for consumption in licensed stores,” reads a translated version of the governing coalition’s agreement, which covers 118 pages. “This controls the quality [of cannabis], prevents the transfer of contaminated substances and guarantees the protection of minors.”

Currently, personal cannabis possession is decriminalized in Germany, where medical cannabis has been legal since 2017. If and when recreational cannabis legalization happens, the European country stands to financially benefit in more ways than one. 

Details of the coalition’s deal including regulations pertaining to the sale and consumption of adult-use cannabis have yet to be hashed out, according to negotiators for the Greens, the FDP and the SPD. 

Cannabis legalization in Germany could save money and generate tax revenue

Not only could Germany create almost 30,000 new jobs with a legal recreational market but also, the European country could save money and generate tax revenues to the amount of approximately 4.7 billion euros (USD $5.34 billion). 

This is according to the results of a recently published survey by the Institute for Competition Economics (DICE) at the Heinrich Heine University in Düsseldorf. 

Commissioned by the German hemp association, the survey discovered that cannabis legalization could attract an additional 3.4 billion euros (USD $3.8 billion) in annual tax revenues every year, as well as save the police and judicial system up to 1.3 billion euros (USD $1.5 billion) annually.

Cannabis legalization aside, the coalition also seeks to advance a handful of other drug policy reform efforts, including drug-checking services that will enable people to test illicit drugs for contaminants and other harmful substances without worrying about facing criminal penalties.

Moreover, the social repercussions of cannabis legalization in Germany will be assessed by the joint government four years after the plant is legalized.

Cannabis legalization in Germany would bolster the European market

Should Germany’s incoming governing parties manage to enact a legal cannabis law, it goes without saying that the European market could get an almighty boost. 

The latest edition of the European Cannabis Report predicted that the cannabis market – which was valued at 400 million Euros (USD $450 million) this year – will be worth approximately 3 billion euros (USD $3.4 billion) in annual revenue by 2025. The report was published by a team of analysts from research firm Prohibition Partners.

The EU cannabis industry is on-track to outpace the U.S., where The Senate is at a standstill. Although EU regulation is still in its early stages, the outlook is significantly more promising than the existing regulatory framework in the U.S., since a proper plan for federal cannabis legalization has yet to be composed.

EU countries like Denmark, Germany, Portugal and Spain have already permitted cannabis cultivation as part of their medical cannabis programs. Meanwhile, the majority of EU countries have decriminalized personal cannabis consumption.