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German Cannabis Legalization Estimated at €4.7 Billion

Cannabis legalization in Germany could be worth around 3.4 billion euros in tax revenues and about 1.3 billion euros in cost savings.

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Cannabis legalization in Germany could be worth tax revenues and a cost-saving of about 4.7 billion euros ($5.34 billion) per year and create 27,000 new jobs, according to a survey conducted by the Heinrich Heine University’s Institute for Competition Economics (DICE) outlined by Reuters. The survey was commissioned by the German hemp association and comes as legislative leaders are considering a coalition to push forward with the reforms.

Chancellor-in-waiting Olaf Scholz and his center-left Social Democrats (SPD) are brokering a deal with the environmentalist, pro-spending Greens and the libertarian, business-friendly Free Democrats (FDP) to build a three-way coalition to bridge support for broad cannabis legalization in the nation, the report says, adding that negotiators for the SPD, Greens, and FDP are still working out details of the plan, including rules for the sale and adult use of cannabis.

Germany is Europe’s largest economy and medical cannabis had been legalized in the nation since 2017.

Cannabis legalization in Germany became more possible with the electoral victories of the SPD in September. The Free Democrats have estimated that were cannabis taxed similarly to cigarettes, Germany could raise up to 1 billion euros annually. The Greens have indicated that a cannabis control law would “drain the black market for cannabis and reduce organized crime,” while the Social Democrats have called for cannabis to be distributed to adults in so-called “field projects” to assess the impact of legalization for adults.

The reforms are opposed by German law enforcement leaders with Rainer Wendt, head of the German Police Union, saying that allowing legalized cannabis “would be the beginning of a stoned future instead of the launch of a modern Germany.”

Oliver Malchow, the head of Germany’s police union GdP, has said that he wouldn’t back the reforms as “legal but dangerous” alcohol is “already causing enough trouble,” adding that it doesn’t make sense to “open the door to another dangerous and often trivialized drug.”

The DICE survey suggests cannabis legalization could bring cost savings in the police and judicial system of up to 1.3 billion euros per year.

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