Cannabis Legalization in Germany Would Bring €4.7 Billion and Generate 27,000 Jobs
The cannabis legalization bill has created opportunities for companies that have been producing cannabis for medical purposes since 2017.
Germany is becoming the largest country in the world to allow the sale of cannabis, which represents a huge opportunity for local producers. However, the current bill restricts sales to so-called cannabis clubs only.
The legalization of cannabis possession and consumption could bring about $5 billion a year to the German state budget and generate 27,000 new jobs.
When it was announced in November 2021 that the German government would present a bill to the Bundestag legalizing the consumption and possession of cannabis, researchers at Heinrich Heine University in Düsseldorf predicted that such a measure would generate financial benefits.
The Düsseldorf-based research team, led by Professor Justus Haucap, based on a scenario of 400 tons of cannabis consumption per year, estimated potential revenues of around €4.7 billion per year. Their calculations took into account expected tax revenues, the cost of legal cannabis stores, and savings in the police and judiciary.
Cannabis taxes alone could bring in €1.8 billion a year to the treasury. In addition, revenues from corporate tax, trade tax, and VAT could amount to some €735 million. Social contribution and personal income tax revenues generated by legal cannabis jobs could amount to €526 million and €280 million, respectively.
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Cannabis legalization could end the existence of the illegal black market
That would allow for better protection of youth and more effective addiction prevention. It also decriminalizes millions of cannabis users.
The legalization bill has created opportunities for companies that have been producing cannabis for medical purposes since 2017. Germany is becoming the largest country in the world to allow the sale of cannabis, which represents a huge opportunity for local producers. However, the current bill restricts sales to so-called cannabis clubs only.
Clubs must be in the form of cooperatives, require a permit, and can have a maximum of 500 members. Each member can buy a maximum of 25 grams per day and 50 grams per month. Those between the ages of 18 and 21 can consume a maximum of 30 grams per month. Plants will be grown on a “community” and “non-commercial” basis and will be financed by membership fees. Greenhouses must be secured against theft and equipped with a screen for privacy.
In addition to the cannabis clubs, the federal government plans to introduce pilot cannabis legalization programs in which legal cannabis sales will be tested. Some cities, such as Frankfurt, Berlin, and Cologne, have already expressed their willingness to participate in this project.
Germany stands on the threshold of a revolution in cannabis legalization. While final decisions are still being made, there are many indications that the future is bright for the industry and the potential benefits it can bring to the economy and society.