Germany removes cannabis from illegal substances, furthers EU legalization
Cannabis reclassification in Deutschland catalyzes new distribution system, health care processes and insurance concerns.
As the move to legalize recreational and medical marijuana use continues to spread globally, insurance professionals are keeping their fingers on that industry’s proverbial pulse to understand the impact of various legalization initiatives on the insurance industry as a whole as well as health care in particular, with regard to both the risks and coverage needs that stem from legal weed.
In a recent webinar hosted by Dentons Europe, Peter Homberg, head of Dentons European cannabis group and one of Germany’s top cannabis lawyers, spoke about that country’s recent move to legalize cannabis. Homberg frequently advises companies in the field of pharmaceuticals diagnostics, medical devices and biotechnology.
Germany — one of the largest countries within the European Union — is going forward with regards to the legalization of cannabis in Europe, Homberg said. The country’s Cannabis Act (Cannabisgesetz or “CanG”) partially came into force on April 1, 2024. At its core, the CanG generally decriminalizes cannabis, permits citizens to grow cannabis at home, and establishes a legal stage for cultivation, social clubs and associations.
Consumption and cultivation rules
As part of Germany’s CanG, cannabis has been removed from the list of prohibited substances in the German Narcotics Act and can be obtained and consumed from personal cultivation (up to three plants per adult in a household). Purchases of seeds via the internet or distance selling and shipping to Germany from EU member states also are now permitted. This means no seeds can be actually imported from the United States nor from the large cultivators in Canada.
“The German government wants to get better control about what is going to be imported here, even within the borders of the European Union. Starting in July 1, 2024, cannabis may also be obtained and consumed from cultivation of non-commercial cannabis cultivation associations,” Homberg said.
The clubs are allowed to dispense a maximum of 50 grams of cannabis per month per member for personal consumption. The minimum age for membership is 18 years, with a maximum of 500 members per club, and their place of residence must be in Germany. But if a user is below age 21, the maximum amount that person can get from the cannabis cultivation association is 30 grams, and the THC content is limited to 10% or less.
In addition, each club must appoint youth protection, addiction and prevention officers, and clubs are not allowed to advertise. They must maintain a minimum distance of 100 meters from schools and other children’s and youth facilities as well as playgrounds. And membership in several clubs at once is prohibited. “What is interesting is that the plant itself can only be touched by members, which means that the cannabis clubs are not allowed to let any third party actually do the cultivation or do any kind of harvesting,” Homberg said.
Medical cannabis
Medical cannabis has been legalized in Germany since 2017. With the Medical Cannabis Act, the CanG has now created a separate regulatory body for medical cannabis, which was previously subject to the provisions of the German Narcotic Drugs Act (Betäubungsmittelgesetz, BtMG). The new prescription requirement means that a normal pharmaceutical prescription will be sufficient in the future instead of a BtMG prescription. In addition, there is the elimination of bureaucratic requirements such as the dispensing voucher procedure, which relieves the burden on pharmacies. The aim is to eliminate the existing disadvantage to German producers compared to import companies and create new production capacities in Germany.
“Now physicians are allowed to actually prescribe cannabis for the first therapy with a very broad range of different indications whereby the major indication is pain and chronic pain,” Homberg said. This is expected to have long-lasting impacts on the healthcare insurance industry in Germany as insurance reimbursements for medical cannabinoid products are expected to grow significantly.
Next steps
There are already efforts being made to amend the CanG in order to make the control of cultivation associations by the state authorities more flexible at the request of the states and to give the states more room to maneuver in dealing with large cultivation areas, according to Homberg. Some German federal states expressed concern that organized crime could use partial legalization to shift parts of their business from the black market to the legal market. Allegedly, documents or plans have emerged during raids in the criminal milieu that feed this concern.
Homberg said with the CanG, more medical-cannabis patients will have access to their medicine now that cannabis is no longer classified as a narcotic, which experts say will simplify the process for doctors and the supply chain. It also could complicate the health-insurance reimbursement process, at least in the short term.
“The market for medicinal cannabis is expected to increase seven to tenfold over the next few years as a result of the reclassification, which is interesting for investors,” Homberg said.
Indeed, since the CanG Act was initiated on April 1, Germany has seen dramatic growth in the medical cannabis market.
“We all assumed that it was going to happen, but not to this extent,” Homberg said. “For example, we’re operating online platforms with patients, physicians and pharmacies bringing these three together. And before the change of the law on April 1, they had around 60 to 80 medical cannabis prescriptions per day. Since the change in April 1, they have between 200 to 300 prescriptions per day.”
As for recreational cannabis in Germany, the new law is not expected to open up significant commercial opportunities and is being called “quasi legislation” because it enacts a general prohibition on recreational cannabis use with some exceptions.
“The federal government’s former plan to sell cannabis to adults in specialized shops has been postponed,” Homberg says. “Instead, the legal basis for the nonprofit cannabis associations was created for members to acquire cannabis for recreational use.”
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