How do I proceed legally to establish a “Cannabis Club” and what requirements must I fulfill?

Apr 18, 2023

A broad legalization of recreational cannabis is not currently planned, as recently announced by Karl Lauterbach and Cem Özdemir. Instead, two pillars are planned: Firstly, so-called Cannabis Clubs are intended to regulate cultivation and distribution, as well as allowing for personal cultivation. Secondly, commercial supply chains are only provided for in regional model projects. In light of these developments, we have received several questions about whether it is now possible to simply establish a Cannabis Club.

What will the legalization of cannabis look like in the future?

The key points for a possible legalization of recreational cannabis have now been presented. However, it is currently difficult to implement this plan, as the legal situation regarding cannabis has not yet changed. The presented key points also do not represent a concrete draft law and all statements are subject to reservation. However, it is expected to become more concrete in the near future. Already in April 2023, a draft for the first pillar, which mainly concerns Cannabis Clubs and personal cultivation, will be presented. However, neither will lead to a commercial trade. Only in the model regions of the second pillar, which will take a bit longer, the situation will be different.

Is it possible to go from personal cultivation to becoming a small business owner?

The actual question, however, is whether it is possible to develop from personal cultivation to becoming a small business owner. Unfortunately, the first option is immediately ruled out. If you think of the typical small-scale production of cannabis plants and would like to sell their yields when you hear the term ‘personal cultivation’, you will quickly be halted. As stated in the key points paper, criminal provisions are to apply in the future for the sale of cannabis not grown in Cannabis Clubs themselves. Therefore, personal cultivation is solely for personal use and does not serve as a springboard for a career as a cannabis dealer.

Another option is to establish Cannabis Clubs for the communal cultivation of recreational cannabis.

With Cannabis Clubs, it’s different: The question of whether ‘the average person’ can establish such a club can be answered with yes. These associations, which are allowed to legally cultivate and distribute recreational cannabis, must be led by natural persons, meaning by individuals and not by legal entities such as corporations or the like, as stated in the key points paper. It is clear that the person who leads the club must be at least 18 years old. The key points also provide for their reliability to be checked, but what exactly is required for this is not yet known.

What are the requirements for Cannabis Clubs?

The operation of a Cannabis Club will not be profitable, as the associations are not allowed to operate for profit and cannabis may only be distributed to members to cover personal needs. There will also be restrictions, such as not allowing third parties to be entrusted with the cultivation. However, the key points provide for various requirements for the management of a Cannabis Club, including quality requirements for pesticides, information and reporting obligations, restrictions on the simultaneous sale of alcohol, tobacco and other drugs, as well as obligations for age verification and youth protection. In addition, there will be a general advertising ban and regulations for handling personal data. The import and export of recreational cannabis will not be allowed, but the import of seeds or cuttings for initial cultivation is being considered by lawmakers.

Violations of the requirements and conditions imposed on the operation of Cannabis Clubs can lead to severe sanctions In addition to fines, the revocation of the permit and monetary or even imprisonment penalties can be imposed for repeated violations. The clubs are to be managed according to the basic principles of association law, with personal liability of the executive board only to occur in cases of intent or gross negligence. Consumption of cannabis within the associations themselves is not to be allowed.

The third option for implementing cannabis legalization involves the introduction of regional pilot projects and commercial supply chains.

A real commercial distribution will likely only be possible as part of the measures of the second pillar, which provides for regional pilot projects with commercial supply chains. The goal is to conduct scientific research, in particular on the effects on the black market. However, the information is still very limited. A draft law could be available after the summer break. While some voices speculate that the legal framework for the first pillar could already come into effect in the summer of 2023, it will likely take longer for the second pillar as this measure will probably need to be notified to the EU.

The establishment of a Cannabis Club will not necessarily be straightforward. Most likely, no. There are many requirements for the establishment and operation of such associations that must be taken into account, even if they have only been outlined so far. Capital is also needed, both for cultivation itself and for the ‘bureaucratic’ apparatus that will undoubtedly be necessary to operate a club. However, you don’t have to be a financially strong company to start a Cannabis Club – and you’re not allowed to be.

Cookie Consent Banner by Real Cookie Banner