Tag: Europe

Large, multi-state operators in the US are teaming up to sue the federal government over reform. Will the same strategy work in Europe?

Several large U.S. companies are teaming up to sue the U.S. federal government over what they claim are unconstitutional limits on their commercial operations across the US. One of the suits will focus on the federal government’s prevention of intrastate commerce. Another will challenge the 280E tax provision blocking the industry from taking tax deductions for state taxes from their federal returns.

The approach is certainly a novel one in the history of cannabis reform.

The question is, could such a tactic work in Europe, and at what level?

Lawsuits Move Policy – But Only So Far

In Europe, legal challenges have already begun to move policy – and on both a country and EU level – but it has been unpredictable so far.

For example, in Germany, a patient legal action directly led to national medical reform in 2017. A current lawsuit hopes to do the same to determine, finally, the legal status of hemp. Recreational legislation may settle this out of court, but lawsuits clearly help to focus legislative attention right now on this issue.

Beyond this, at the EU level, the decision to normalize CBD – namely to redefine it as a non-narcotic substance – went through the court system, rather than being decided initially as policy in a national legislature.

A French case on imported CBD vapes also helped set policy at the EU level about the cross-border trade in CBD.

That said, the European Court of Justice refused to accept the case of Albert Tio in Spain, who was criminally charged and convicted for being a central part of the club movement, presumably because of its implications for recreational reform.

What Happens When Germany Legalizes?

There is clearly a place for such lawsuits after Germany legalizes recreational use. This development will absolutely drive policy across the EU – as Luxembourg has already noted. But when will this translate into similar kinds of lawsuits?

For now, it is too early to tell what might land first. However, with several countries in the EU on the brink of legalizing recreational use, even of the home grow kind, and both Germany and Switzerland in a trade alliance that goes beyond the EU, there is certainly a window of opportunity for legal challenges of this ilk, starting with the free movement of goods.

A non-pharmaceutical provider in Holland, for example, might be able to sue to gain access to the German market. So might a Swiss company. Beyond this, growers in countries like Portugal, Spain and Greece might be able to try to litigate market access for their high THC product, even if of pharmaceutical quality.

Market access is a powerful incentive for change. This in turn is also likely to instigate litigation to allow trade in the first place.

A recent poll has shown that more than 50% of Europeans support cannabis reform – but when will it really arrive?

According to a recent poll by British cannabis consultancy group Hanway, more than 50% of Europeans support the legalization of recreational cannabis. A further 30% have shown interest in purchasing it once it becomes legal.

The European cannabis market is expected to cross the 3-billion-euro mark sometime in 2025, up from about 400 million euros in 2021, but these projections also assume that recreational reform is just around the corner in the region.

The reality, however, may be a little different, starting with the fact that Germany, the region’s largest medical cannabis market, has repeatedly delayed forward reform.

As of last year, the new government, the so-called Traffic Light Coalition, included recreational cannabis reform in its formal agenda. That said, after the election, forward motion has been nothing short of slow. To date the government has yet to draft a formal plan, claiming that other issues, like Covid and the war in Ukraine, are greater priorities.

Which European Countries Are Likely to Move First?

Covid has certainly played a role in cannabis legalization efforts in Europe. This starts with the static number of insurance reimbursement applications approved during the last two years in Germany, leading to statements from leading insurers that the “cannabis craze is over.” However, this is profoundly misleading for several reasons, starting with the fact that insurers are still routinely turning down 40% of all of the applications they receive, forcing patients to sue. Or go back to the black market.

Beyond this, however, there is a noted distaste for actually implementing even a draft bill that can be commented on in Germany, with some insiders claiming as late as last week that nothing will even be proposed until 2023. Some people are already claiming that a recreational market will not even start in Germany before 2025.

In the meantime, Malta and Luxembourg are moving forward with their own versions of reform and Holland is moving, albeit slowly, to implement a national cannabis distribution network for coffee shops.

The dark horse right now is Portugal, which also shelved forward plans thanks to the collapse of the government earlier this year but is expected to move forward in short order.

For now, however, hope is mostly focused on the Swiss, who are moving forward with the first, real, integrated national trial in the region this year.

Reform is clearly coming to Europe. But its pace, sadly, is still on a slow track. There is a lot of work to be done.

Italy is leading the way with preserving the specific right of home grow in Europe, but this is still a thorny political issue just about everywhere on the continent

Italy is not letting up on the cannabis home grow conversation. Indeed, after the Constitutional Court refused to allow a cannabis referendum, the issue has refused to die. It now appears that a legislative mandate allowing home cultivation of up to four plants for personal use is headed for the Italian federal legislature.

Whether it passes or not is another question, but the truth of the matter is that the Italians have been one of the leading proponents of home grow in Europe for the last several years.

Everyone else? Not so much.

Why not? 

The Top Reasons Home Grow Is Not Popular Within The Cannabis Industry

There are several reasons that home grow is not popular both in political discussions about legalization and the industry itself. These include:

1. Home grow is hard to legislate, monitor and control. The arguments against it include the fact that people who grow their own cannabis at home could a) sell it, b) poison themselves and those they distribute it to, or c) expose minors to high levels of THC.
2. Even in situations, however, where home grow must be licensed (see Canada and certain US states) or performed in a non-profit setting that is also licensed, it is still not popular with the powers that be. This is because such collectives will always offer cheaper prices than commercial cannabis – whether it is medically designated or “just” recreational.” This is a direct threat to the “for-profit” medical and recreational industry
3. It cannot be taxed and often is involved in “grey market” distribution.

However, in an environment where patients are repeatedly denied access because cannabis is too expensive, it is precisely the sickest cannabis users who are being left out of the revolution.

Solutions

There are several options on the table in Europe right now. The bottom line is that with decriminalization, home grow will have to be at least slightly regulated. It is unlikely it can be completely banned. This means a licensing system – perhaps similar to a dog license in Germany. However, how many plants will be allowed (and what the penalties will be for having more than this minimum amount) is a different conversation – and further one that for now has largely been left off the table.

However, it is a critical step in the normalization of the entire discussion. And as full and final legalization comes to Europe, one that cannot be left out of the room forever.