Germany’s plan to liberalize cannabis rules clears its final parliamentary hurdle

by Grow Up Conference | Mar 22, 2024 | Grow Opportunity, Media Partners

BERLIN (AP) — The German government’s plan to liberalize rules on cannabis cleared its final parliamentary hurdle Friday, paving the way for the possession of limited amounts of marijuana to be decriminalized on April 1.

In a second step, “cannabis clubs” that will be allowed to grow the substance for members’ personal use will be permitted to start work on July 1.

The legislation, a prominent reform project of Chancellor Olaf Scholz’s government, was approved by parliament’s lower house last month. But its fate in the upper house, which represents Germany’s 16 state governments and where Scholz’s socially liberal coalition lacks a majority, was unclear.

The upper house could have delayed it by sending it to a committee that mediates disputes between the two houses, a move that backers feared would give the center-right opposition an opportunity to stop the project altogether. But opponents of the plan failed to muster a majority to call on the committee.

The bill foresees legalizing possession by adults of up to 25 grams (nearly 1 ounce) of marijuana for recreational purposes and allowing individuals to grow up to three plants on their own. That part of the legislation will take effect on April 1.

German residents age 18 and older will be allowed to join nonprofit “cannabis clubs” with a maximum 500 members each starting July 1.

Individuals will be allowed to buy up to 25 grams per day, or a maximum 50 grams per month — a figure limited to 30 grams for under-21s. Membership in multiple clubs won’t be allowed. The clubs’ costs will be covered by membership fees, which are to be staggered according to how much marijuana members use.

The legislation also calls for an amnesty under which sentences already imposed for cannabis-related offenses that will no longer be illegal are to be reviewed and in many cases reversed. Regional authorities worry that the judicial system will be overburdened by thousands of cases.

Opposition leader Friedrich Merz vowed in an interview with the Funke newspaper group ahead of Friday’s vote that his party would reverse the legislation if it wins national elections expected in the fall of 2025.

Federal cannabis review calls for look at tax structure among 54 recommendations

by Grow Up Conference | Mar 22, 2024 | Grow Opportunity, Media Partners

By Tara Deschamps

A group convened by the federal government to study the legislation that made cannabis legal is recommending the country review one of the industry’s biggest gripes: excise taxes charged to pot producers.

A report compiling 54 recommendations from the five-person expert panel released Thursday urged Finance Canada to consider a new model that would increase excise taxes on products with high quantities of tetrahydrocannabinol, cannabis’s psychoactive component, and lower fees on those with smaller amounts. It positioned the change as a way to move consumers away from high-THC products.

The tax, which the panel called a “substantial burden” for cannabis producers, amounts to the higher of $1 per gram or a 10 per cent per-gram fee for dried and fresh cannabis, plants and seeds.

It was set in 2018, when Canada legalized cannabis and the government expected a gram of pot to sell for $10, at which price 10 per cent is $1. These days, it is easy to find products priced as low as $3.50 a gram, resulting in higher fees for producers who must still pay $1 per gram.

“We see an opportunity to update tax policy to reflect the current reality,” the report said.

The finding came as the legal cannabis sector has faced the sobering reality that the market isn’t as big — or as easy to navigate — as predicted.

Many of the industry’s biggest players, including Canopy Growth Corp., Aurora Cannabis Inc. and Tilray Brands Inc., have spent the last five years laying off workers, closing facilities and grappling with balance sheets that reflect a challenging market and a slow crawl toward profitability.

Others have already fled the industry, selling their businesses or declaring bankruptcy. To blame, they say, is a combination of overregulation, a still-mighty illicit market, decreasing prices and in some regions, too many cannabis stores.

Many were hopeful the review would give credence to their experiences and if they were lucky, prod the federal government toward meaningful change.

Shortly after the report was released, Canopy Growth chief executive David Klein said his staff “welcome” the recommendations and encourage the government to use next month’s federal budget to “take urgent action on the greatest issues impacting the industry.”

He named as priorities a review of the excise tax and another to study whether it should be applied to medical products.

However, Rick Savone, a senior vice president with Aurora, said the report was a “disappointment” because it failed to address industry sustainability and provide actionable recommendations that would combat the illicit market or offer immediate excise tax relief. Savone added a call for immediate excise duty relief in the upcoming budget, rejecting the idea of incremental changes.

The recommendations were compiled over 18 months and go beyond the economics of pot to also delve into Indigenous participation in the sector and the health and safety of Canadians, including youth who may be exposed to cannabis.

Large swaths of the report focused on cannabis packaging, which manufacturers are required to ensure does not entice youth to try their products. Thus, it cannot feature cartoons or celebrity endorsements.

The report said Health Canada should revise packaging rules to allow companies to include QR codes to convey credible information about cannabis or even labels saying a product is certifiably organic or recyclable.

It also advocated for Health Canada to develop a “standard dose,” which companies could use to help convey the amount of a product that should be consumed at one time.

“This could be an effective nudge for cannabis consumers to move toward lower-risk cannabis use behaviours,” said the report.

Despite cautioning that such a standard has been “elusive for several years” because cannabis is consumed, metabolized and experienced in many different ways, it said the measure would be a worthwhile task for Health Canada.

While the report outlined several areas of change, it also reaffirmed some of the country’s existing pot policies, like the 10 milligram per package limit for THC.

The panel said the industry felt raising the limit would help it squeeze out illicit sellers with products containing higher THC amounts and prices for edibles that can be up to 90 per cent lower than legal counterparts.

Public health stakeholders, on the other hand, supported maintaining the current limit because they saw a rise in unintentional cannabis poisonings among children since legalization and were concerned the severity of these incidents would only climb with a greater THC threshold.

“Ultimately, we felt that there are too many unknowns and too much uncertainty about the likely consequences of increasing the amount of THC in these products,” the panel said.

“Therefore, we are of the view that prudence is warranted here and accordingly, we recommend that the current limit be maintained, and that research be undertaken that will fill critical knowledge gaps related to this issue.”

Health Canada said Thursday it is reviewing the panel’s conclusions and will provide recommendations to the federal government on potential next steps. It offered no timeline on when those suggestions may be delivered.

The government was late to launch the panel’s review of the Cannabis Act, which was due to begin around the three-year anniversary of legalization but was pushed back when the COVID-19 pandemic materialized.

The review chaired by Morris Rosenberg, a former deputy minister of justice and deputy attorney general of Canada, began in September 2022.

By the time it concluded, panellists had heard from 600 participants, including cannabis retailers, growers, medical professionals, public health advocates and consumers.

This report by The Canadian Press was first published March 21, 2024.

Key recommendations from the government’s review of the Cannabis Act

by Grow Up Conference | Mar 22, 2024 | Grow Opportunity, Media Partners

More than five years after cannabis was legalized in Canada, the government has released its final report of the legislative review of the Cannabis Act.

The report is the result of 18 months of work by a panel of industry experts to assess the progress of cannabis legalization and make recommendations to improve upon cannabislegislation.

Here are some of the key recommendations made by the report.

Public health 

The report makes a number of public health recommendations concerning issues including product promotion, packaging and labelling, children and youth, and potency.

It calls on Health Canada to set and monitor targets for reducing youth and young adult cannabis use, to help implement school prevention programs, and to redouble efforts to inform Canadians about the risks of accidentally exposing children to cannabis.

It also expresses concern about the trend toward higher potencies of THC in cannabis products, recommending that the limit remain at 10 milligrams per package and that Health Canada establish a definition of higher-potency products and apply additional warnings to such products. THC is the psychoactive component of cannabis.

“If the current trend towards consuming higher-potency cannabis cannot be halted or reversed, then Health Canada should be ready to implement additional product regulations,” the report says.

The report also recommends the development of a “standard dose” for use on labelling, and makes several recommendations to improve and simplify the labelling on packaging.

First Nations, Inuit and Métis

The report has several recommendations regarding First Nations, Inuit and Métis communities, including that Health Canada should co-develop culturally appropriate materials and programs containing health information about cannabis.

It also calls on Health Canada to co-develop amendments to the Cannabis Act to better protect health and safety in Indigenous communities, authorizing nation-to-nation agreements to control commercial cannabis activities.

Industry recommendations

The report recommends amending regulations to allow cannabiscultivators to sell products directly to distributors, and also recommends consideration of a review of the excise tax model, as it was based on a much higher average price than today’s prices.

Reforms to the excise tax regime could include higher duties on cannabis products with higher concentrations of THC in order to discourage consumption of higher-risk products.

The report also makes several recommendations targeted at improving diversity in the cannabis industry, including collecting demographic data.

Medical access 

The report recommends allowing pharmacies to distribute cannabis products to people with medical authorization.

It says Health Canada should prioritize moving past the distinct medical access program so cannabis can be part of conventional medical care by being considered within standard drug approval pathways. The report says this should start with the rapid advancement of a pathway for health products containing CBD, a non-psychoactive compound found in cannabis.

It also encourages more research on the therapeutic use of cannabis in Canada, and recommends the establishment of a knowledge hub focused on the use of cannabis for medical purposes.

The report also urges Health Canada to support the development of clinical guidance documents regarding medical use of cannabis to help increase the knowledge of health care professionals.

This report by The Canadian Press was first published March 21, 2024.