Fire & Flower Holdings Corp (FAF)

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IMO, FFLWF should quickly pivot to the EU where they have 3,071 Stores across Europe and other regions. Cannabis legalization is going to happen faster there than in the USA.

Cannabis Legalization in Germany – The Final Blow to European Drug Prohibition?

11 JANUARY 2022/ BY ROBIN HOFMANN

https://europeanlawblog.eu/2022/01/11/cannabis-legalization-in-germany-the-final-blow-to-european-drug-prohibition/

The new German government plans to legalize cannabis. The bill for the cannabis control law includes the licensed cultivation of the soft drug and the selling in specialized shops to persons over 18 years. The biggest EU Member states consider itself in good company: Canada legalized cannabis in 2018. A number of American states soon followed. In the EU, Luxembourg and Malta took the step towards legalization in 2021. In the Netherlands, cannabis has been freely available in the famous coffee shops since the 1970s. Still, under Article 2 of the Dutch Narcotics Law (Opiumwet) the possession of narcotics, including cannabis and its derivatives are forbidden. The fact that Dutch authorities nevertheless tolerate the sale in coffee shops (so-called gedoogbeleid) is based on the opportunity principle. This principle gives the Dutch investigating authorities discretionary power in deciding which offences to prosecute and which not. Based on this, Dutch prosecutors consider the selling and possession of limited amounts of cannabis as tolerable.

Neverthless,some legalization enthusiasts identify a global movement away from drug prohibition policies and towards a liberal approach to addictive substances. Indeed, the German approach is no less than a small revolution of over half a century of cannabis prohibition in Europe. The question remains: how is Germany going to do it without breaking international and European law? This post will explore the legal reasoning behind cannabis legalization in Europe, the legal barriers raised by the ECJ and how Germany is trying to circumvent them.


The ECJ Josemans Judgement

Back in 2010 the ECJ issued the judgement C-137/09 Josemans vs. Burgermeester van Maastricht. In the underlying case the plaintiff Josemans, the owner of a coffee shop in the Dutch city of Maastricht, defended himself against the closure of his establishment by the city. The mayor had decreed that access to coffee shops could only be granted to persons who were residents of the Netherlands. The aim of this regulation was to curb drug tourism from Germany, France and Belgium by requiring a Dutch residence permit in order to buy cannabis in the coffeeshops. The plaintiff had violated this regulation and claimed that it led to discrimination of EU citizens. The Court ruled all narcotic drugs including cannabis are prohibited in all the EU Member states with the exception of strictly controlled trade for use for medical and scientific purposes (para 36). Hence, as cannabis sold in coffeeshops is not marketed for the latter purposes and consequently are prohibited from being released into the economic and commercial channels, restrictions with regard to nationality are no violation of the principle of non-discrimination (para 42).

If the large-scale cultivation, the trade and selling of cannabis outside of medical and scientific purposes is illegal within the EU, how can countries like Malta, Luxembourg, the Netherlands and now Germany legalize cannabis for recreational purposes? The answer is: it depends on how the legalization is conceptualized. Within the EU Luxemburg and Malta have opted for a legalization-light, where consumption and cultivation for personal use is allowed, while the commercial cultivation and selling remains prohibited. A similar policy has evolved in Spain and to a lesser extent in Belgium, where so called cannabis social clubs facilitate personal cultivation and consumption of cannabis. However, none of these models are as ambitious as the German plans with what can be called the total legalization of cannabis consumption.

Especially the Netherlands with its unique coffeeshop model are observing the German plans with great interest – and astonishment. The country had struggled for decades to legalize the supply side for cannabis products resulting in what criminologists coined back-door problem: while selling cannabis in coffee shops is tolerated, the cultivation and buying of large quantities remains prohibited. This leaves the coffee shops with no choice then to buy the product illegally. Through the front door the cannabis goes out legally, through the backdoor it enters illegally. The reasons for this birth defect of Dutch cannabis policies are to be found in European law and ECJ jurisprudence which strictly prohibits cultivation and sale for purposes other than medical and scientific ones. But if the Netherlands never managed to solve this problem how is Germany then going to do it? Did they find a legal loophole in European law? Well, they might have.

Drug Prohibition and EU Law

To understand the German approach, it helps to first have a look again at the ECJ Josemans Judgement. Besides emphasizing the strong interconnection of international and European law the ECJ refers to Framework Decision 2004/757. Much like the Schengen agreement from 1990 this framework decision deals with the threat and fight against illicit drug trafficking with means of law enforcement. In addition, it puts a strong focus on a more coordinated and harmonized approach. With Schengen and the abolition of border controls within the EU, drug trafficking received an enormous boost. The fight against drugs required harmonized law and enforcement strategies especially because the member states implemented very different drug policies. While Sweden, for example, until today has a zero-tolerance policy towards all forms of drugs, the Netherlands did not take prevention of drug related crimes very seriously for many years. But in a united Europe, a fundamental problem of drugs became drastically apparent: policies in one country may have great impact in another country. Particularly Germany has struggled with this issue. For example, the Czech Republic’s lax handling of Chrystal Meth laboratories has led to a small epidemic in neighboring Bavaria with all the negative consequences such as drug related crimes, increased need for therapy and drug-related deaths. The tolerance policy of the Dutch has been clogging up the courts of German border towns with criminal cases related to cannabis smuggling. Hence, Germany advocated over years for a prohibitionist approach to drugs and the Framework Decision stresses harmonization and coordination as a key factor within EU drug policies.

But the true innovation of the framework decision is to be found in Article 2(2) of the Framework Decision. Here the cultivation of cannabis and other drugs is not prohibited if ‘it is committed by its perpetrators exclusively for their own personal consumption as defined by national law.’ Back in 2004 this was no less than a small revolution with regards to drug policies. Spanish courts almost immediately took the provision up and introduced it into their rulings virtually legalizing cultivation for personal consumption. The provision is not only the legal basis for the cannabis social club movement that has appeared in many member states but also for the Luxemburg and Maltese approach. However, the wording of Article 2 does not allow for a far reaching legalization model as planned by the German legislator. Instead, the German approach is based on Article 2(1) of the Framework decision. It obliges each Member State is to take the ‘necessary measures to ensure that, inter alia, the following intentional conduct when committed without right is punishable: offering, offering for sale, distribution, sale, delivery on any terms whatsoever and brokerage of drugs’. The crucial two words in the article are ‘without right.’ Those form the legal fundament of the German cannabis control bill as it is stated in the appendix of the latter:

‘Legal trade in cannabis by permit holders under the Cannabis Control Act is therefore not covered by the Framework Decision, as in these cases there is a right (in German: Berechtigung) under national law.’

Put differently: European law released the member states from taking measures against the trade with drugs including cannabis if this trade is rightful or based on a right. The crucial question is what makes drug trade rightful? To find an answer to this question a quick look into international law or the jurisprudence of the ECJ of the past 30 years helps. The trade and cultivation of any drug is permitted if it is for scientific and medical purposes. Art. 7 of the Convention on Psychotropic Substances from 1971 only allows that manufacture, trade, distribution and possession of any drug only for duly authorized persons, in medical or scientific establishments which are directly under the control of their Governments or specifically approved by them. Moreover, they require a license prior authorization. While international law is very clear in the matter of licensing and authorization to handle drugs of any kind European law is not. Indeed, neither in the Schengenaquis nor in the Framework Decision the restriction to medical and scientific purposes is mentioned. However, both refer directly to international law and so does the ECJ in its jurisprudence. The crucial question therefore is: Does the wording of the Framework Decision allow for EU Member states to no less then unhinge the entire EU drug prohibition regime by giving them the possibility to define by law what constitutes a right to cultivate and trade cannabis?

The German interpretation of ‘without right’

At first sight this seems far-fetched. Harmonization and coordination in the fight against illicit drug trade is the guiding principle of EU drug policies particularly emphasized in the framework decision. How would a provision foster this goal that provides for every member state to opt out of the prohibitive regime virtually enabling them to legalize every existing drug? Even if this was the intention of the legislator one would have expected some further explanation of such a drastic step. But there is indeed no single word on this matter in the additional material to the Framework Decision. Moreover, this Framework Decision dates back to the early 2000s, a time where cannabis liberalization was more of an exotic idea. Lastly there is the jurisprudence of the ECJ that repeatedly since the Horvarth decision from 1981 has corroborated the solemn exemption of strictly controlled drug trade for medical and scientific purposes.

But what speaks for the interpretation of the German legislator that basically allows for all member states to create their own drug laws? Well, first of all the wording of Article 2(1). While the international treaties tend to speak about ‘authorization’ and ‘licensing’ whenever it comes to drug cultivation for medical or scientific purposes, the framework decision explicitly refers to a ‘right’ to do so. A right, however, a is more than a permission or license. A right can be created by law. If the Framework Decision does not specify any limitations, it seems reasonable that the Member States themselves specify what constitutes the right in question. Moreover, with regards to the international treaties lit 2 only explicitly refers to the European treaties (e.g. the conclusions of Tampere) when it calls for legislative action to tackle illicit drug trafficking. It does not directly mention the important international treaties. Indeed, the Vienna Convention on Psychotropic substances from 1971 containing the important exemption of medical/scientific purposes is mentioned in Art. 1 but only with regards to the definition of drugs. One could deduce from this that the Framework Decision is meant to be a step towards an independent EU drug policy with more latitude than offered by the international conventions. However, the Schengen agreement and also the EU action plans on drugs from 2000 to 2004 leaves no doubt that member states to the international drug control conventions are bound by the limitations for medical and scientific purposes.

In conclusion there seems be the better arguments for a narrow interpretation of the terms ‘without right’ as relating only to scientific and medical purposes. The German legislator interpreted the framework literally, but it is rather unlikely that this will hold up in court. Hence, the German cannabis control bill is based on a very formal yet questionable interpretation of EU law. This leaves the question what the possible consequences of this German way are?

Conclusion

In 2019 the ECJ issued a judgement that shook the German legislator to its bones. In case C-591/17 Republic of Austria vs. Republic of Germany the court decided that the German infrastructure use charge for passengers vehicles entails a discrimination against EU citizens. Germany had passed a bill requiring all passenger vehicles using the German Autobahn to pay a toll. Nothing unusual here. But the clue was that German vehicle owners could claim back the toll through their taxes. The ECJ rightfully considered this clear discrimination on grounds of nationality pursuant to Article 18 TFEU and dismissed the German law. Will the cannabis control law share the same fate? There is a good chance. Just like the infrastructure charge the cannabis control law widely ignores EU law, the ECJ jurisprudence as well as the interest of other EU member states. How, for example, will Germany curb drug tourism to Poland, Austria or Denmark? After years of pressure from the German neighbor the Dutch have linked the sale of cannabis in border towns to a residence permit. The ECJ considered this legal and non-discriminatory for the reason that cannabis is still a prohibited product under Dutch national law. Hence, there cannot be a right for EU citizens to buy this product. But under the German bill cannabis would not be a prohibited anymore. This would also cut of the possibility to restrict the selling of the product only to German residents as this then indeed would be a discrimination according to the ECJ jurisprudence. But how else could Germany then tackle the problem of drug tourism? The bill leaves this issue unresolved.

There exist good reasons for legalizing cannabis: It may help to dry up illegal markets, relieving the criminal justice systems while reducing stigmatization of consumers and potentially minimizes health risks through quality controls. More importantly the gateway drug issue becomes better manageable: Those who buy weed from a dealer are often offered harder drugs as well, often as a free sample. A comprehensive but cautious legalization of cannabis is a reasonable drug policy. However, it must take into account the interests of other member states and be in line with European law. If this law no longer fits in time, one has to change it. Within the EU this is a long and winding road. There are no shortcuts, not even for Germany.