A cannabis farm belonging to the firm Aurora Europe GmbH in the city of Leuna. Here, workers are seen picking the buds off of cannabis plants.

A cannabis farm belonging to the firm Aurora Europe GmbH in the city of Leuna. Here, workers are seen picking the buds off of cannabis plants.

Foto: Gordon Welters / DER SPIEGEL

High Society High Hurdles Face Germany's Cannabis Legalization Plans

The German government is moving towards legalizing marijuana, creating an entirely new industry in the country. But the effort faces significant challenges, including European law.

In a bunker surrounded by cameras and security guards, hidden behind a 24-centimeter-thick reinforced concrete, it smells like weed. The bunker is located on an industrial site in Leuna in the German state of Saxony-Anhalt. There’s no sign indicating what's inside. All those who enter must don a protective suit, slip several covers over their feet and hair, and even disinfect their rubber gloves. Only then does the security door open to the artificially lit plantation that the Aurora company believes will generate healthy profits. Some 6,000 marijuana plants grow here of the "Island Sweet Skunk" variety, a name apparently intended to describe the nuances of its odor.

DER SPIEGEL 47/2022

The article you are reading originally appeared in German in issue 47/2022 (November 19th, 2022) of DER SPIEGEL.

SPIEGEL International

Soon, according to German government plans, cannabis plantations like the one in Leuna will be all over the country. And marijuana will be cultivated for pleasure rather than just the medicinal purposes for which the crops here are grown. A motley crew of companies are gearing up to try to influence the legislative process. They are drafting legal opinions and position papers in addition to engaging in dialogue, driven out of the fear of strict cultivation rules or a cap on THC content.

The legalization of cannabis for consumption purposes is a prestige project for the current coalition government, and a number of ministries are involved. Berlin doesn't just intend to decriminalize the substance, but also wants to regulate its cultivation and distribution, to change regulations on legal limits for driving and, at the same time, to advance health and youth protection regulations. And the cabinet member responsible for the law also happens to be a person who few in the country are likely to associate with pleasure: Health Minister Karl Lauterbach.

Lauterbach, a member of the center-left Social Democratic Party (SPD), is familiar with the drug mainly through school friends who became addicted suffered as a result, as he recounted in a Berlin café this summer. Lauterbach said he had only smoked cannabis once, when he was over 18, and the effect was "as it should be." He declined to reveal any more than that. That afternoon, Lauterbach tried a cannabis lollipop for DER SPIEGEL. It was totally legal, as it only included the extract CBD, without any psychoactive effect. He didn’t like the taste.

Lauterbach wants to legalize cannabis for health protection. For him, it’s about drying up the black market and pushing back consumption, which has increased in recent years. A paper outlining the key issues of the legislation is currently undergoing a legal review in Brussels. It can only become legislation once that review is complete. While Finance Minister Christian Lindner of the business-friendly Free Democratic Party (FDP) has promised to make marijuana legal by 2023, Lauterbach is looking at a timeline of 2024.

German Health Minister Karl Lauterbach with a CBD lollipop

German Health Minister Karl Lauterbach with a CBD lollipop

Foto:

Nikita Teryoshin / DER SPIEGEL

According to Lauterbach’s key issues paper, possession of 20 to 30 grams of cannabis for private usage should be permitted. The companies must grow the plants in Germany, make the supply chains traceable and control the quality and distribution.

Although Lauterbach is in no real hurry, the industry is growing impatient. CBD stores are sprouting up everywhere, marketing the active ingredient cannabidiol as a wellness product, in creams, oils, teas, for calming, against cramps, even against tremors caused by Parkinson’s disease. Then, there are startups focusing on therapeutics. There’s the pharmaceutical industry, which already markets medical cannabis. There are software companies seeking to sell their crop tracking technologies, as well as fertilizer manufacturers. All would like to see their concerns addressed in Lauterbach’s bill.

A former politician is also involved in the cannabis business: Tobias Zech, a former member of parliament with the conservative Christian Social Union party, who has a seat on the board of PharmCann Deutschland AG. The Munich-based company's business model is based on "the extraction, refinement and development of legal cannabis raw materials" and the establishment of a "marketing, distribution and wholesale structure."

The negotiations between the three parties in the current coalition government in Germany were a milestone for the lobby. As the SPD, Greens and FDP identified legalization as their joint project, it didn’t take long for the emails and letters to start pouring in. Cannabis company Cantourage, which recently went public, boasts that it published a guide that was discussed during the exploratory talks held by the parties that now make up the current government. No politician likes to admit that he or she is influenced by interest groups, but the problem with the issue of cannabis is that policymakers are in the dark on many issues – it’s an illegal drug, after all – so they have to rely on the expertise of the companies involved.

Pro-cannabis demonstrators in Berlin in August

Pro-cannabis demonstrators in Berlin in August

Foto: Christian Ender / IMAGO

In the first days of negotiations to form the government, no lobby was as active as that of cannabis enthusiasts from the perspective of the politicians involved. One negotiator recalls plenty of contact but not much by way of organization within the lobby. Sources at the Agricultural Ministry say there were some rather small-scale inquiries, some from startups that were directed straight to the minister. They were mostly approached by people looking for quick profits rather than well-oiled PR machines. This may be due to the fact that farmer’s associations, which have perfected lobbying on agricultural issues, are more reserved when it comes to cannabis - in part because it’s unlikely that traditional farmers are going to get particularly involved in the industry. But also out of the calculation that cannabis will never become a mass commodity like wheat.


More Sports Coats than Tie-Dyes

For a long time, it was mainly activists driving the lobbying. The German Cannabis Association had primarily dedicated itself to consumers, small businesses and home growers of all kinds. Two years ago, the Cannabis Business Industry Association spun off, and it now represents 90 companies. The association is asked for advice from everyone, from farmers in Germany to sales representatives from Colombia and even German retail chains.

There is also an association that represents the companies that produce cannabis for medical purposes. They are eager to come across not as a group of stoners, but as an alliance of hip companies that are seeking to get a foothold in a new lifestyle market. More sports coats and sneakers than tie-dye and flip-flops.

Dirk Heitepriem swapped sport coat out for a protective suit before entering the bunker in Saxony-Anhalt. The 41-year-old is vice president of the subsidiary of Aurora, a publicly traded company that grows medical cannabis here. But he also handles queries from companies around the world as vice president of the German Cannabis Association. Germany is already the largest market for medical cannabis in Europe, with around nine tons delivered to German pharmacies last year. "The legal cannabis market in Germany could become the largest in the whole world," says Heitepriem. Up to 420 tons of cannabis could be consumed in this country each year, an economist forecasts in a study commissioned by the German Cannabis Association. At a price of 10 euros per gram, that would correspond to annual sales of 4.2 billion euros. Many want to be a part of this party.

Heitepriem estimates investments in the entire industry of around 1.5 billion euros. There is also a lot of interest abroad, particularly in Canada, where Aurora is based, and the United States, where investors had initially banked on U.S. President Joe Biden legalizing marijuana across the country. Share prices went through the roof. But because expectations haven’t been met, many are now looking to Germany. American rapper Snoop Dogg, for example, has invested several million euros in the Hesse-based cannabis startup Cansativa.

At the moment, marijuana companies from around the world are preparing for a conference in Las Vegas, Nevada, to exchange ideas. One event is dedicated specifically to the German market, and Philip Schetter of the Berlin-based firm Cantourage, which has just gone public, will also be there. He, too, intends to enter the cannabis market once it is legalized in Germany. But he wants to do it under different conditions than what Lauterbach is envisioning. He doesn’t believe, for example, that the substance should be grown in Germany. His company sources cannabis from Uganda, Jamaica, Uruguay and elsewhere. In the long term, a Europe-wide cannabis market could develop, but Lauterbach doesn’t want to allow imports of the drug once it is legalized.

Heitepriem of Aurora is nonetheless quite satisfied with the key issues paper. If crops are only grown in Germany, German companies would have an advantage. He says it is already a success that the proposed cap on permissible THC levels has been removed from the draft. Otherwise, there would have been no way of competing with the black market to make it less relevant.

So far, only 10 employees in protective suits and rubber slippers are working at the bunker in Leuna, where they tend to plant cultivation and processing. The gardeners are referred to as "growers," who water, prune and spray plants with CO2. In another room, the buds are dried and processed into medicinal products. Waste must be incinerated under strict safety requirements.

The bunker in Leuna is one of only three places in Germany where cannabis can currently be grown legally. The cap is a total of 2.6 tons of cannabis for medical purposes this year. Aurora plans to produce 1 ton annually in the small bunker. Heitepriem would be pleased if the size of the market were to increase. His company has gained considerable experience in the industry in Canada. The company plans to start looking for a new location for its operations in Germany.

Cannabis lobbyist Dirk Heitepriem: Will Germany become the world's largest market for cannabis?

Cannabis lobbyist Dirk Heitepriem: Will Germany become the world's largest market for cannabis?

Foto: Gordon Welters / DER SPIEGEL

However, there are doubts in Brussels as to whether the German plans are consistent with EU regulations. In the opinion of Bavaria’s Health Minister Klaus Holetschek of the CSU, cannabis legalization "violates European law." Last Wednesday, he traveled to Brussels to meet with Monique Pariat, the director general at the European Commission responsible for the issue, to press for a "no." EU law only permits trade in narcotic substances such as cannabis for medical and scientific purposes, Holetschek says, not for private consumption.


Brussels Has Concerns

However, Lauterbach’s people were faster than Holetschek. On November 14, Thomas Steffen, a state secretary at the Health Ministry, called Pariat to promote the German plans. It’s unknown whether his words swayed the French European Commission official or not. Two days after the meeting, a spokesperson for the Brussels-based authority said Berlin had not yet submitted a formal request for consultation. As such, the authority said it would not comment on the matter at this time.

The spokesperson only wanted to emphasize one thing: Current EU law requires member states to criminalize all activities relating to the trafficking of marijuana – from production to preparation and distribution to sale.

At the same time, the Commission has also hinted at a loophole: EU law does not lay down any requirements for the personal use of cannabis; that is a matter for the member states. Whether that is broad enough to get the green light from Brussels for the entire legalization plan is questionable. At the technical level, there are "significant concerns," according to a senior EU diplomat. What Lauterbach is planning, the diplomat says, "goes far beyond anything that has been done before."

"Legalize! Because the dealer on the corner doesn’t care about protecting youth."

Cem Özdemir, Green Party politician

If the Commission says "no," that will likely be the end of the debate. Lauterbach has made it clear publicly that he will scrap the cannabis plan if that happens.

Perhaps, the cannabis lobbyists are hoping, the issue will end up being handled by another German government minister. They would prefer someone like Agriculture Minister Cem Özdemir. The politician had himself photographed prominently next to a cannabis plant years ago as a PR stunt. "Legalize! Because the dealer on the corner doesn't care about protecting youth and you never know what's really in the bag in the end." Özdemir tweeted out the photo shortly before the elections for the federal parliament last year. The industry is hoping he will be a reliable ally.

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