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Germany Versus The United States: Which Will Legalize Cannabis First?

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For years, Americans have been trying to predict how the U.S. federal government would respond to the proliferation of state-level cannabis legalization. Early on, we wondered whether the federal government would preempt early adopting states’ efforts to legalize adult use of cannabis, which didn’t happen as a majority of states have now legalized cannabis in some form. As states continued to jump on board the adult-use trend, we wondered whether the federal government, in an effort not to be outdone by states, would then be motivated to federally legalize cannabis. However, the opposite happened— what little guidance the Obama-era Department of Justice provided was ultimately reversed during the Trump Administration.

So, here we are, in a state vs. federal limbo in the U.S. regarding cannabis. And, despite renewed enthusiasm in a federal legalization after Democrats won the White House and both chambers of Congress, cannabis reform legislation has yet to make it to President Biden’s desk.

Now, the focus of reform has shifted to the likelihood of slow, federal “semi-legalization” through incremental change in the form of legislation providing safe harbor for cannabis banking and research, absent full legalization. Federal half-measures recognizing existing state legal industries, if you will.

However, the importance of passing a more contemporary federal policy on cannabis in the United States is more prevalent than ever. During this long period of wide-ranging speculation over federal legalization, more than 30 states have adopted medical and/or adult-use cannabis programs, while both Canada and Uruguay have legalized adult-use cannabis at the federal level.

Governments around the world are contemplating their path forward for legalization due to the perception that public health and safety can be better served by public-private regulatory partnerships based on product safety and scientific research. Europe is of particular interest on this front, as countries across the continent have adopted medical-use policies, with Germany seeking adult-use legalization in the near future.

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Why take the time to compare trajectories for federal legalization between, say, the U.S. and Germany? For starters, it’s fun, but also because Europe is a large market that lacks a large market presence for cannabis. According to one report from Prohibition Partners, the European market is set to grow from €230.7 million in 2020 to more than €3 billion in 2025, with Germany itself set to compose more than half of that market until 2024.

With Germany likely to play a pivotal role in the trajectory of the European cannabis model, it’s worth examining both the tailwinds and headwinds facing legalization in the country, and how they compare to the factors affecting federal policy in the U.S.

The German Outlook

When the “traffic light coalition” formed between the Social Democratic Party, the Greens, and the Free Democratic Party in 2021, it included cannabis legalization in its plans for the new German government. That gave them four years to accomplish legalization, but time is getting tight to get cannabis legalization over the line.

In the lead-up to a formal proposal, Germany held listening sessions with a wide range of stakeholders to solicit input into what the country’s cannabis market could look like. The nation’s health agency is currently working on official legislation for legalization and is set to roll it out to the public in late 2022 – at which point the four-year timeframe for legalization will already be halfway over.

While the best-case scenario would be to pass that legislation through the Bundestag in early 2023, the traffic light coalition government will need to compromise with some powerful opposition parties, such as the Christian Democrats. The legislation will also have to garner support in the German Bundesrat and will need to navigate compliance with European Union law and in particular the Schengen Agreement, which criminalizes non-medical cannabis commerce.

However, with Germans now showing slightly more support for legalization than continued prohibition – part of a broader trend in favor of legalization across Europe – and the assistance of countries like Malta and Luxembourg, those compromises seem likely to happen. The question is shifting rapidly from “if” Germany will legalize cannabis to “how” it will do so.

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The American Outlook

Each passing day before this fall’s midterm elections represents a decreased likelihood of sending any of these bills to President Joe Biden’s desk, but that doesn’t mean that conversations aren’t being shaped for future calendar years.

Republicans are increasingly showing support for decriminalization, and the U.S. population now overwhelmingly supports legalizing cannabis (a 2021 Pew Research survey found 91 percent of American adults support at least medical legalization, while fewer than one in 10 opposed legalization entirely), meaning there could be significant momentum for legalization moving forward.

As with most political issues in Washington, the biggest obstacle for federal cannabis legalization is the hyper partisanship on this issue and a limited number of session days in the remainder of this Congress. There is still significant disagreement both within and between the two major parties about what the best path forward should be for cannabis legislation largely.

One thing that is clear is that Congress generally tends to be gravitating towards incremental cannabis policy changes ahead of full comprehensive federal reform or descheduling. For instance, the SAFE Banking Act allowing for cannabis banking has passed the House of Representatives with Republican support seven times but has yet to be successful in the Senate. There are ongoing discussions about expanding the scope of the bill by attaching it to other incremental pieces of legislation in an effort to garner enough support to pass the Senate. Republicans have proven to be warming up to the concept of cannabis reform via bills that incrementally acknowledge the product.

Who Will Go First?

The question still remains: will Germany or the U.S. legalize cannabis first? For Germany to cross the line first, it will have to find a way to navigate the complexities of European Union law while establishing a path for cannabis imports. Beyond that, proponents will also need to generate broader support in Berlin among the Christian Democrats, who are traditionally opponents of legalization.

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By contrast, the U.S. will continue to legalize and establish their respective state markets because comprehensive legislation at the federal level is less likely to be approved at the same rate.

The more realistic scenario for the U.S., however, remains more incremental change at the federal level through legislation on cannabis banking and research. Meanwhile, de facto legalization can be achieved through states continuing to legalize cannabis individually.

Ultimately, the nod goes to Germany given that full legalization is already on the federal agenda, and there is better than a coin flip’s chance that the country is able to achieve the needed compromises at home while successfully navigating the dynamics of international law.

Source: Forbes

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