Germany will permit adults to purchase and possess up to 30 grams (a little over 1 ounce) of cannabis for recreational use, as the ruling coalition fulfills a promise to legalize weed, according to Bloomberg.
Chancellor Olaf Scholz’s cabinet approved a proposal on Wednesday that will allow controlled cultivation and distribution of cannabis, as Europe’s biggest economy aims to curb the black market for the drug.
The move is a boost for Germany’s nascent cannabis industry. Firms including SynBiotic SE and Cantourage have laid out ambitious growth plans. The legislation will also bolster public finances, with the government planning a special cannabis tax.
The legalization of weed is far from a free for all. Sales will be restricted to special stores, and the ruling coalition plans to evaluate a limit on the amount of THC – the chemical that makes you high – for adults 21 years old and younger. Still, the limitation on the amount that can be purchased is higher than in previous proposals.
The government’s plan is “like winning the lottery,” said SynBiotic Chief Executive Officer Lars Mueller. “When the time comes, we’ll be able to offer franchise-like models for cannabis retailers, in addition to opening our own stores.”
The company’s shares surged as much as 19%, paring the decline for the year to 46%.
Before the measure can go into force, the European Commission needs to review the proposal, but the process could be held up by crises like the war in Ukraine and the energy crunch, according to German Health Minister Karl Lauterbach, who projected that legalization could take effect in the first quarter of next year.
“It’s important, but there are many other problems that are occupying people at the moment,” he said at a press conference in Berlin. “It’s not a project where we’re putting pressure on, but it’s also not a lifestyle project.”
To meet expected demand, Germany will likely need to import weed from other countries, according to Cantourage CEO Philip Schetter.
“We do not believe that purely domestic production of cannabis will be sufficient to meet current and future demand,” he told Bloomberg.