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It’s Going To Be A Very Rocky Road For Europes Largest Economy To Legalize Adult-Use Cannabis

It’s Going To Be A Very Rocky Road For Europes Largest Economy To Legalize Adult-Use Cannabis

If you thought it was challenging enough to pass legislation in the US, a country that has two dominate parties, think again…

In Germany, there are six parties, and this has made it extremely challenging for the country to pass pro-cannabis legislation. Germany has a large population and many analysts expected a legal recreational cannabis market to be one of the most significant growth drivers for the industry.

Earlier this week, legislation to legalize recreational cannabis in Germany was quickly shot down and we decided to conduct some research to determine why this was the case. To better understand the story, we will briefly break down the six political groups in Germany:

  1. The Left holds 69 seats in parliament and was in favor of the legal cannabis initiative.
  2. Social Democratic Party of Germany (SPD) is one of the more popular parties and holds 152 seats of parliament.
  3. The Greens hold 67 seats in parliament and was the second party to support the legislation
  4. The Union – Is a coalition of the Christian Democratic Union (CDU) of Germany and the Christian Social Union (CSU) in Bavaria. The combined group has a huge majority in the government and holds 246 seats in parliament. They voted against the bill.
  5. Free Democratic Party (FDP) hold 80 seats in government and it voted to abstain from voting on the legalization of cannabis. The party made proposals for the cannabis industry that were shot down as well.
  6. Alternative for Germany (AFD) joined parliament for the first time in 2017 and is considered to be a far right party. They opposed the proposal of the bill and suggested treating cannabis like other medicines for testing success of treatment.

Earlier this year, members of SPD showed interest in the legalization of recreational cannabis. The group published a paper that stated, “We see the regulated distribution of cannabis to adults in Germany as a good chance for a successful policy, ideally supported by simultaneous strengthening prevention and early intervention as well as counseling and treatment.”

Unfortunately, Daniela Ludwig who is a member of the CSU did not agree with the statement and bashed the legislation on Twitter. We believe that her condemnation of the legislation is what killed the bill and will monitor how the situation evolves.

When it comes to recreational cannabis, it is a matter of when, not if. Germany has the opportunity to create a large taxable revenue stream in a time where it needs it the most. The COVID-19 pandemic has impacted the German economy and we are surprised that they are not looking for new avenues to boost the economy.

The structure of the German parliament makes it challenging for the economy to progress. Unless the Union agrees with the legislation, the bill will not pass, and this is not a good structure for growth.

The COVID pandemic is not going away and neither will Germany’s need for taxable revenue streams. In the current market environment, pollical parties and countries need to find ways to work together to defeat the pandemic and grow the economy. Until this happens, we believe the global economy faces headwinds and will monitor how the German recreational cannabis legislation progresses from here.

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

Published at Wed, 04 Nov 2020 12:39:51 +0000

Filed in: News

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