Achtung, baby. Germany is launching a blitzkrieg…of weed.

After several months of deliberations, German officials last week announced that they will move forward with national cannabis legalization. Berlin’s decision will have major repercussions for the cannabis industry in the rest of Europe and globally.

Germany already is leading the European cannabis market in terms of size and growth. According to market research firm Prohibition Partners, over a million German patients will have access to medical cannabis by 2024, and the German medical market alone will be worth 7.7 billion euros by 2028.

“We’re on the right track,” German Health Minister Karl Lauterbach declared last Friday about the legalization effort. The German plan comes in two parts.

First, the proposed marijuana policy would allow limited marijuana sales in certain regional areas for a period of four years. That would enable officials to see the impact of reform both in big cities and more rural locations. If the program is considered successful, it would be implemented throughout the country.

Secondly, the plan allows Germans in all regions to grow their own cannabis for personal use, separately from the regional plan.

Under the home-grown proposal, consumers would be allowed to possess 20 to 30 grams of cannabis. Non-commercial growers could organize and distribute marijuana among themselves through “cannabis clubs.” Such clubs already exist in the Netherlands and Spain.

The regional proposal needs approval from the European Union (EU) Commission, but the part of the plan that allows Germans to grow their own cannabis for personal use does not.

Cannabis demand is strong in Germany, where the applicable law is rather confusing, as is often the case in Europe when it comes to weed.

Medical cannabis has been legal in Germany since 2017; recreational pot remains technically illegal, but law enforcement is lax.

German narcotics law states that authorities are not required to prosecute for the possession of a “minor amount” of any narcotic drug meant for personal consumption, except in cases “of public interest,” i.e. consumption in public, in front of minors or within a public school or a state prison. The definition of minor amount varies, from up to 6 grams (0.21 ounce) of cannabis in most German states to 15 grams (0.53 oz) in Berlin.

WATCH THIS VIDEO: Despite Legalization, The Cannabis Black Market Thrives

The research firm New Frontier Data recently examined the growth of illicit marijuana sales in Germany as a case study of the world’s growing black market for the substance. The following chart shows the projected growth of Germany’s illicit market, if federal legalization doesn’t occur:

Germans account for 17% of total European demand, and 3% of global demand. Those are disproportionately high percentages.

Germany’s Federal Cabinet approved an initial framework for a legalization measure in late 2022, but the government wanted to get the green light from the EU to ensure that enacting the reform wouldn’t violate international rules.

Last year, a group of German lawmakers visited California and toured cannabis businesses in the state on a fact-finding tour to help guide their country’s approach to legalization. California is the world’s largest marijuana market, and the state struggles with a vast black market of its own.

When sweeping marijuana legalization occurs in Germany, the ripple effects throughout Europe will be profound, providing a profitable catalyst for the industry’s growth on a global basis. Today Europe, tomorrow…the world.

The European cannabis market is forecast to grow at a compound annual growth rate of 67.4% to reach 3.2 billion euros ($3.75 billion) by 2025, according to a recent report from Prohibition Partners.

Marijuana’s momentum in Germany is yet another sign that we’re now on the cusp of a “break out” year for marijuana and the ancillary industry of psychedelics. That’s why I’ve launched an investment service called Marijuana Profit Alert.

My publication provides specific, actionable advice on the best investments in the psychotropic revolution. In my portfolio of holdings, I strive to strike the right balance between risk and reward. Click here to learn more.

John Persinos is the editorial director of Investing Daily.

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