Germany should start the domino effect of legalization. Revenues could exceed 4,7 billion euros

The deal between the main parties in the new German government to legalize cannabis for adult use and create a regulated framework for the “recreational” cannabis industry is expected to be virtually closed, according to several means de communication International. Adult use should be introduced during the next legislative session and Germany will thus begin the long-awaited “domino effect” of legalization in Europe. Full cannabis regulation could bring Germany annual tax revenue and cost savings of around €4,7 billion and create 27 new jobs, advanced to Reuters.

The next German Chancellor, Olaf Scholz, and his centre-left Social Democrats (SPD) party are in advanced talks with the environmental greens and the libertarian Free Democrats (FDP) to assemble a coalition for legalization.

SPD, Greens and FDP negotiators are still working on details of the agreement, including the rules under which the sale and recreational use of cannabis will be allowed and regulated in Europe's largest economy, but it is already known that Germany will have to follow. the dispensary model, which exists in Canada or some US states. The use of cannabis for medicinal purposes has been legal in Germany since 2017.

An investigation by the Institute for Competition Economics (DICE) at Heinrich Heine University in Duesseldorf, commissioned by the German Hemp Association, found that legalizing cannabis could lead to additional tax revenue of around €3,4 billion a year. On the other hand, it would also save costs for the police and judicial system of €1,3 billion a year, while creating tens of thousands of jobs in the cannabis industry and economy.

Full legalization in Germany would give a boost to the growing European market, which is expected to be worth more than €3 billion in annual revenue by 2025, up from around €400 million this year, according to the European Cannabis Report by Prohibition Partners.