Poised to lead the way for legalization of both recreational and medical marijuana, Germany nevertheless faces a number of challenges that stand in the way of an effective, efficient cannabis program.
From international policies that make legalization tricky to license requirements that are difficult to meet, there’s a lot standing in the way of Germany’s up-and-coming cannabis program. That’s where we come in.
Working with global experts like HYC can help cannabusinesses in Germany and around the world learn from mistakes we’ve seen play out here in the U.S. and prepare for regulations that have yet to be announced.
Here’s what you need to know about the programs for recreational and medical marijuana Germany is developing and how to avoid repeating U.S. cannabis industry mistakes.
Recreational & Medical Marijuana: Germany & the EU
Following the 2017 legalization of medical marijuana, Germany is now in the process of creating an adult-use cannabis program. But while the demand for recreational cannabis is high, the German government is more cautious.
European Union (EU) treaties and drug policies make it tricky to legalize recreational cannabis in just one country. Doing so leads to a problem similar to what we’ve seen here in the U.S., where crossing the border out of a state where adult-use is legal and into one where it isn’t can get you into a lot of trouble.
And as programs continue to develop for recreational and medical marijuana, Germany faces a catch-22 situation: license applicants will need to have prior experience operating a cannabis business, but since the sale of recreational cannabis products has never been legal, no one has this type of experience.
If the program is successful, however, Germany may well become the California of Europe. Having legalized medical marijuana in 1996, California was the first U.S. domino to topple. Just two years later, four more states (Washington, Alaska, Oregon, and Nevada) followed suit, with many others right behind them.
Likewise, Germany’s legalization of adult-use will likely be a huge breakthrough for cannabis in Europe, especially if they’re able to accomplish it in a unified manner in cooperation with the rest of the EU.
Learn from U.S. Mistakes
There are a number of lessons about handling recreational and medical marijuana Germany can learn from the U.S. — many of them cautionary.
To begin, cannabis programs need to be built for long-term economic sustainability. In a case like Oklahoma’s, however, where thousands of licenses are offered and it’s easy to apply, win a license, and open up shop, the cannabusiness failure rate is through the roof.
But it’s not enough just to limit the number of businesses. For example, in 2015, Florida issued Medical Marijuana Treatment Center (MMTC) licenses to a limited number of operators who, thanks to political lobbying, could open up as many retail locations as they wanted. This made it easy for big companies to corner the market.
A better approach is to limit the number of licenses — not just operators — while testing out the market, and build from there. Or, like Massachusetts, to limit the amount of cultivation space allowed per license. This helps keep some of the bigger operators out, limiting their ability to take over the market.
Finally, for another disastrous program to avoid emulating, look no further than Illinois. In addition to a social equity scandal and resulting lawsuit, the state has taken a backwards approach to awarding licenses — retail before cultivation — allowing stores to open before product would be available to fill them.
Cannabis Developments to Watch
Because of the lack of experience operating cannabusinesses, either for recreational or medical marijuana, Germany — and programs expanding throughout the EU — will need to rely on global experts to prepare for the challenges ahead.
It’s essential to keep a finger on the industry pulse to know what (and when) programs are rolling out and what specific regulations will look like. Some regulations to watch include:
- Compliance and tracking: Will there be a required provider — like METRC in many U.S. states — or will any kind of seed-to-sale tracking platform be sufficient?
- International cooperation: How will each country’s program operate alongside others within the EU?
- Social equity (or social injustice programs): Since the goal of such a program is to bring social and economic impact to those who have been disadvantaged, what specific injustices will the program address, and for whom?
How each country’s program is shaped will likely affect the best strategy for entering the market.
You’re Not Alone
As Europe continues moving toward the legalization of both recreational and medical marijuana, Germany and its aspiring cannabusiness owners will do well to learn from the myriad of cannabis regulation experiments within the U.S.
Don’t try to navigate this complex field on your own — work with global cannabis experts who can help you take the best steps forward. Reach out to us to schedule a consultation.