How cannabis should be regulated from a business perspective
BvCW presents key issues paper on stimulant regulation | Tax model for cannabis taxation and cannabis commission proposed
Berlin, 01/24/2022 – The German Cannabis Business Association (BvCW) has presented a key issues paper on the most important regulatory questions and thus positioned itself in favor of the planned legislative reform. The aim is to strengthen the domestic economy, combat the illegal market and protect consumers.
BvCW President Dr. Stefan Meyer makes this clear:
“The implementation of the controlled supply of cannabis to adults is an ambitious and at the same time very sensible concern of the federal government. As the cannabis industry, we want to proactively support this process with our expertise. We have summarized the most important aspects of the upcoming regulation in the 16-page key issues paper entitled “Towards a German Cannabis Agenda”.”
BvCW Managing Director Jürgen Neumeyer adds:
“As the cannabis industry, we naturally accept the regulations of politics and would like to participate as economic players with realistic implementation proposals in advance. In order to establish a controlled market of an estimated 400 tons of cannabis as a stimulant with all regulations, we need acceptable conditions. Our proposals are primarily characterized by three objectives: a) the greatest possible reduction of the illegal market, b) the containment of problematic consumption and c) the strengthening of domestic value chains.”
Areas of action
In order to realize an orderly transition from an illegal to a legal market, many design areas must be taken into account. This primarily concerns the areas outlined in the key issues paper:
- Product origin
- Process for creating the market
- Product characteristics and quality
- Prevention
- Taxation & product access
- Demarcation and strengthening of the medical sector
Cannabis Commission
The BvCW has proposed a cannabis commission (similar to the coal commission) to prepare and discuss the requirements for a regulated cannabis dispensary in order to involve all socially relevant groups in an advisory capacity.
Licensing
Due to international treaties, the entire value chain will probably have to take place in Germany. The cannabis industry is therefore striving for solutions that also allow smaller and medium-sized companies, such as farmers, to participate in the new economic sector. Complex planned economic tendering procedures, such as those for medicinal cannabis, should therefore be avoided. Instead, the planned licenses are to be granted indefinitely, provided that all criteria are met.
Tax model
In order to minimize the black market in the long term, the criteria must be defined in such a way that cultivation, processing and sale are competitive with the illegal market. Tax policy is a key instrument here. The cannabis industry is proposing a new tax model based on THC content. This would make products with a low THC content cheaper and products with a high THC content more expensive.
Intensive work on the key issues paper within the association began on November 24, 2021, the day the coalition agreement was published. The “Working Group on the regulation of stimulants” has since become the “Department for the regulation of stimulants”. The key issues paper of the department was adopted by the BvCW Board on 20.01.2022 and will be made available to various politicians in the coming days. More detailed elaborations of individual areas of regulation will follow.
The complete key issues paper of the cannabis industry can be found here.