Cannabis

A chance for a new market is opening in Germany: Cannabis will be removed from the list of prohibited substances in the Narcotics Act on April 1, 2024

The ‚German Bundestag‘ has reached an agreement on the planned law to legalize cannabis in Germany (Cannabis Act - CanG). The German Cannabis Act will be passed in the Bundestag in the week beginning February 19. The Bundesrat is expected to take a final look at the law on March 22. The President of the ‚Bundesrat‘ is unlikely to raise any constitutional objections to the law. The first part is expected to come into force on April 1, 2024, followed by a second part on July 1, 2024. 

Schalast partners and experts in this field, Katja Hoos and Dr. Marc-André Rousseau, offer cannabis companies and investors in the cannabis sector comprehensive advice on all issues relating to the cultivation of cannabis and the production and distribution of cannabis products in the German market, especially on:

Regulatory Compliance

Our Cannabis Sector team understands the current legal and regulatory framework and can assist your cannabis business in meeting the legal requirements to create a reliable foundation for long-term security and growth. In particular, we support cannabis companies with questions around the requirements for granting the relevant licenses as well as options for legal action in the event that the required licenses are not granted.

Market entry / Investing in Germany

The market entry of foreign cannabis companies and investors in Germany as a pioneer in the legalisation of cannabis as a consumption product gives access to the largest economy in the European Union. In addition, further access to other EU markets will be easier from Germany. We provide comprehensive advice to foreign cannabis companies and investors on entering the German market and investing in German cannabis companies.

Corporate / Startups

We advise emerging companies in the cannabis industry on all legal issues relating to business set-up and development, including company formation, cooperation and shareholder agreements, mergers and acquisitions and other management issues.

Financing

The development of a new business sector, including obtaining the necessary licenses, acquiring machinery and equipment for the cultivation and harvesting of cannabis as well as the production and distribution of cannabis products, requires additional capital. Our Banking & Finance and Venture Capital teams are experienced in the start-up environment and thus advise the banking side as well as the founder side on all financing instruments. Thus, we can advise cannabis companies on all legal issues around financing, including venture capital investments.

Environmental and Property Law / Agricultural Law / Sustainable Energy Supply

Agricultural cultivation of cannabis for consumption purposes in open fields is expected.[2] This is likely to occur under regulatory conditions and has neighbourhood impacts through seed dispersal. We advise cannabis companies on agricultural and environmental/neighbourhood protection issues during production, harvesting and operation to minimise the risk of neighbourhood disputes and disputes with locally competent authorities, as well as on planning and designing sustainable energy supply concepts.

Commercial

We advise cannabis companies on all legal issues surrounding the trade of cannabis and cannabis-related services, including drafting purchasing, supply and cooperation agreements as well as employment contracts, contract negotiations and contract review.

Criminal / administrative / civil proceedings

The strict regulation of the dispensing and use of cannabis products for the purpose of consumption is typically accompanied by criminal and administrative consequences for violations of the relevant laws and regulations. We advise cannabis companies in civil and administrative proceedings on all matters relating to potential violations of laws, regulations and product liability, and work closely with experienced criminal law specialists to assist cannabis companies in all aspects of criminal law.

Patents, Trademarks & Co

Industrial and intellectual property rights can give cannabis companies the legal basis to prevent competitors from using their trademarks, their technologies, their designs, or their trade and business secrets. As the cannabis industry in Germany is still in its infancy and only beginning to grow, it is advisable to start protecting trademarks, technologies, recipes, etc. as soon as possible. Industrial property rights not only offer protection against unauthorised use, but also the possibility of licensing - which in turn can generate additional and recurring income.

Timeline CanG

  1. from February 19 to 23, 2024: Adoption in the Bundestag
  2. March 22, 2024: Adoption in the Federal Council
  3. April 1, 2024: Entry into force of Section 1 of the KCanG and thus private possession, consumption, and cultivation of cannabis and the MedCanG
  4. July 1, 2024: Entry into force of the 2nd section: Start of the "cannabis clubs" (cultivation associations)
  5. XX.XX.24: Draft of the "2-pillar law"

The Consumer Cannabis Act (KCanG) & the Medical Cannabis Act (MedCanG)

The Cannabis Act consists of two parts: the Consumer Cannabis Act (KCanG) and the Medical Cannabis Act (MedCanG). For the time being, there will be no law for a free and commercial market of cannabis products. This was originally the aim of the current federal government. However, international and European treaties and agreements do not yet permit complete legalization.

There will be a two-pillar model. The first pillar will be the KCanG and MedCanG, which will legalize possession and cultivation in parts. As a second pillar, a law on regional model projects is to test commercial supply chains to collect scientific data for full legalization. It will probably have to be submitted to the EU Commission for examination. However, there are no concrete plans or key points for this yet.

Requirements for the purchase of cannabis

When the law comes into force, home cultivation and possession will be permitted in certain quantities for people aged 18 and over. They will be allowed to possess up to 25 grams of cannabis legally. In addition to 50 grams of dried cannabis, up to three female flowering plants per person of legal age may be kept in the home.

The cultivation and sale of cannabis is to be made possible in so-called 'cannabis clubs' and thus in non-commercial associations in limited quantities. The law refers to this as 'cultivation associations'. The distribution of propagation material is also permitted but is subject to strict inspection obligations of the association concerning the receiving person. The sale is subject to official authorization and numerous regulations.

The government coalition's original plan to also offer cannabis for sale in licensed stores, as in Canada and individual US states, is currently not being implemented. Special stores that sell various cannabis products freely to adults are initially to be tested in isolated pilot projects. A corresponding law is planned but has not yet been passed.

A THC limit value for road traffic has not yet been defined. Experts from the Federal Ministry of Transport will propose this by the end of March. Concerning the use of cannabis in road traffic, the driving license ordinance will be amended.

We are happy to support your business.

Schalast builds on the experience of its international network MULTILAW and works closely with its partner law firms in the respective jurisdictions. Cannabis has already been legalised in 18 US Federal States. In addition, prohibition in Canada was already ended nationwide in 2018.

Contact Katja Hoos or Dr. Marc-André Rousseau for comprehensive legal advice on the subject of cannabis.

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[1] Coalition Agreement_2021-2025.pdf (spd.de), p. 87, Drug Policy, "We introduce the controlled supply of cannabis to adults for consumption purposes in licensed shops." (convenience translation)

[2] "In Germany, there are three licensed producers of medicinal cannabis so far, but only one of them can deliver. So far, the cannabis has to be grown under daylight lamps behind thick concrete walls - for a consumer product, this is ecological and economic nonsense," Georg Wurth, spokesman of the German Hemp Association; see Ampel macht mit Cannabis-Legalisierung ernst - Welche Firmen von der Freigabe profitieren | Wirtschaft (solinger-tageblatt.de) (convenience translation)