Berlin No sale of joints in specialist shops, no commercial cultivation: the legalization of cannabis that Federal Minister of Health Karl Lauterbach (SPD) is aiming for is significantly less extensive than originally planned. Nevertheless, the state treasury should benefit from the plans.
Overall, the public sector is likely to record savings and additional income of 1.1 billion euros. This emerges from a calculation by the Düsseldorf economist Justus Haucap for the Handelsblatt. A study from 2021 was updated for this, which put the relief at 4.7 billion euros in the event of full legalization.
According to the plans of the SPD, Greens and FDP, the possession of cannabis in Germany should soon be free of punishment. The traffic light parties want to allow the possession of up to 25 grams of cannabis in the future. Growing a maximum of three plants yourself should also be legal.
In addition, the federal government wants to enable the cultivation and sale of the drug in special associations. The originally planned free sale of cannabis for adults in specialist shops is only to be tested in a second step and initially in model regions with scientific support.
The financial effects are not in the foreground. Instead, the federal government is primarily concerned with fighting the black market and drug-related crime and strengthening child and youth protection. The savings are likely to benefit the public sector in view of tight coffers.
Expert expects 400 tons of cannabis needs per year
The greatest relief is due to savings in the police and judiciary due to decriminalization, which Haucap puts at 1.05 billion euros. Because the cannabis clubs can also employ staff, the state can also expect income from income tax of 28 million euros and social security revenue of 52 million euros.
The calculations are based on initial assumptions about how the legalization plans could be implemented. Haucap assumes a total annual cannabis requirement of 400 tons, of which 120 tons could be covered by the clubs. How many of these are founded depends on many factors – but Haucap considers around 1000 of these delivery points in Germany to be possible, each of which employs two to three people.
At the same time, however, considerable possible income is lost due to the evaporated plans. A possible cannabis tax alone could have brought in up to 1.8 billion euros per year. And with sales, trade, corporation and wage tax, the state could have counted on additional income of more than one billion euros. In the original study, Haucap assumed 26,000 new jobs.
The Düsseldorf economist has calculated how cannabis legalization could affect the state budget.
(Photo: University of Düsseldorf)
“We’re giving away a lot of potential here,” he told Handelsblatt. This does not only apply to tax revenues. “Rather, it is becoming much more difficult to dry up the black market.” Part of the market is left to organized crime. “For this very reason, youth and health protection will not be as good as it would be in a really legalized market with licensing at all stages of the value chain,” said Haucap. The value chains would also be far less extensive.
Haucap warns that cannabis legalization will fail
Haucap even sees the danger that the plans will “fail tremendously” – namely if the founding of the cannabis clubs, the cultivation of hemp plants and the processing and sale in the clubs are covered with “excessive bureaucracy”. “The rules should be as liberal as possible and not too complicated for the clubs,” demands Haucap.
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A report commissioned by Health Minister Lauterbach, on the other hand, advocates limiting the commercial market in terms of health and youth protection.
A corresponding paper from the Institute for Interdisciplinary Addiction and Drug Research in Hamburg was sent by Lauterbach to the government factions in the Bundestag and the other ministries on Tuesday. The report refers to experiences in Canada, Uruguay or some US states where cannabis has already been legalized.
It is to be expected that consumption will continue to increase in Germany after legalization, it says. Health protection for adults is likely to change “only slightly, at least in the short term,” the authors also write.
Approval of cannabis edibles still controversial
They also point to a slightly higher number of traffic accidents after legalization. The legal market should therefore be regulated in such a way “that the increase in consumption is kept at the lowest possible level,” it says. “It would also have to be accepted that the illegal market cannot be curbed as quickly as it would be possible through strong commercialization of the markets.”
It is still disputed whether so-called cannabis edibles, i.e. foodstuffs with the active ingredient THC, should be permitted in Germany. The Ministry of Health points out that a ban is essential for the protection of children and young people.
The report does not advocate a general ban, but points out the dangers. It said accidental intoxication and intoxication among children under the age of 10 has increased “immediately and significantly” wherever edibles have been legally sold. Legal cannabis products should therefore be designed “in such a way that they are not attractive to this target group”.
In contrast to the Ministry of Health, the traffic light coalition is pushing for approval of the edibles. These are “a less harmful form of consumption of cannabis and must therefore be allowed,” said the FDP health politician Kristine Lütke the Handelsblatt. “Otherwise dealers will specialize in it and we will miss our goal of resolutely pushing back the black market.”
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