European cannabis execs would welcome German trial legalization program

April 10, 2023 · MJ Biz Daily

European cannabis executives would welcome a decision by the German government to pursue a trial recreational cannabis program versus nationwide legalization – even if that meant a significantly smaller market for businesses to pursue.

Still, some experts say any trial program in Germany would come with risks, pointing to the flailing Netherlands experiment and even parallels with Japan’s “scientific” whaling activities.

German media reported last week that federal officials might resort to a “cannabis legalization light” model amid concerns that nationwide legalization could violate European law.

German Health Minister Karl Lauterbach had previously expressed confidence that the country’s plan to legalize recreational cannabis would overcome one of its biggest hurdles – European Union approval.

Now, EU approval for full legalization is looking less likely, although no final decision has been made.

Germany requires European approval that its plan wouldn’t violate international law because it is part of the Schengen Area, which comprises 27 countries that have officially abolished passport and other controls at their mutual borders.

Executives contacted by MJBizDaily said the implementation of any temporary trial program shouldn’t be seen as a major setback.

“The ‘cannabis light’ model is a logical step that European countries like Netherlands, Luxembourg, Malta and Switzerland have already (taken), so this would be a safe political course (for Germany),” Michael Sassano, CEO of Somai Pharmaceuticals, said via email.

Somai, a medical cannabinoid producer, is based in Lisbon, Portugal, and Dublin, Ireland.

Sassano said it would have been a stretch to assume the European Union would easily give German recreational cannabis the green light, given that only a handful of EU countries currently have full-fledged medical cannabis programs, contrary to the German health minister’s optimism.

“The growth model for Germany continues to be the strongest in Europe, and with any version of cannabis legalization ‘light,’ this is another positive move to increase access to volumes,” Sassano said.

Trials and tribulations

So-called trial programs – sometimes also called experiments or pilots – are relatively rare in North America but have become popular in Europe as a bridge to potentially broader drug reform.

That’s partly because trial programs are easier to get approval for politically, and they allow a country to overcome certain international treaty obligations, provided the “experiments” are seen as sincere and collect meaningful data.

Alfredo Pascual, vice president of investment analysis at Guernsey-headquartered Seed Innovations, told MJBizDaily that cannabis programs for scientific experiments might seem easier than full legalization to justify in terms of international law, because the 1961 Single Convention on Narcotic Drugs allows the use of cannabis for scientific purposes.

“But it wouldn’t be without challenges. International treaties need to be interpreted ‘in good faith,’” he said, citing Articles 26 and 31 of the Vienna Convention on the Law of Treaties.

“Countries aren’t supposed to use tricks to circumvent their international obligations.”

Pascual noted that Japan tried to use the “scientific research” exemption in the International Convention for the Regulation of Whaling to justify continuing to kill whales.

Years later, the International Court of Justice ruled against Japan.

“I think the idea of cannabis social experiments for ‘scientific purposes’ has merits, but I don’t think that it’s a pathway that could be abused to have massive, open-ended, free-for-all experiments without real scientific output,” he said.

“For it to work, I believe it would probably need to be subject to several limitations and real research organizations (for instance, universities) would probably have to be involved.”

If Germany does pursue a trial program in lieu of full-on legal reform – which remains to be determined – it wouldn’t be the first European country to backtrack in the face of legal uncertainty.

In 2021, Luxembourg backpedaled on its initial plan to establish Europe’s first fully legal recreational cannabis market.

After benchmarking the Canadian model, the Luxembourg government instead announced plans to allow home cultivation of up to four plants for personal use – with no option for retail sales.

Some of Europe’s cannabis trials have experienced major setbacks in one form or another.

The Netherlands has had issues getting its recreational cannabis trial program up and running.

The Dutch have been laying the groundwork for the pilot program for four years, after originally planning its launch in 2020.

Ireland has had major issues with its medical cannabis trial, while Denmark’s has failed to retain more than 500 participants.

‘First step to legalization’

Despite setbacks in some European trials, Dirk Heitepriem, an Aurora Cannabis executive in Germany, isn’t concerned about Berlin’s potential pivot to an experiment.

He suggested any trial program in Germany “would provide the county the opportunity to work together with other parties in Europe who want to legalize as well over the next four or five years to create a European framework which works for everyone.”

“I’m not afraid this would be turned back, because that’s not German tradition. Once you’ve created a framework, it’s going to stay there,” he said.

Heitepriem, also deputy chair of the German Cannabis Business Industry Association, said any trial in Germany would herald the first step toward eventual legalization.

“It’s not a step in the right direction, it’s the first step to legalization,” he said.

“It’s going to take longer than almost everyone expected. For us, it was always a long-term play.”

Heitepriem doesn’t see the German medical market declining, even if the county allows recreational cannabis sales via a trial program.

He said the reimbursement system for patients is complicated, but it’s working.

But Heitepriem said businesses focusing on the so-called private-payer market might have some difficulties.

“Where we will see changes,” he said, “is in the so-called private-payers market, where people will probably move over to the legal (recreational) market.” (Full Story)

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