Image of Reichstag building in Berlin.

The three parties expected to form the next government in Germany have agreed to regulate the distribution and sale of recreational cannabis, according to a coalition agreement released Wednesday.

Europe’s largest economy taking a step toward marijuana legalization and regulation is being viewed as a significant achievement by social groups that have long advocated for an end to cannabis prohibition.

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Businesses also are hoping to profit from sales of the drug under the watchful eye of government regulators.

However, the document contained little in the way of detail.

“We are introducing the controlled distribution of cannabis to adults for consumption purposes in licensed shops. This controls the quality, prevents the transfer of contaminated substances and guarantees the protection of minors,” according to a small section on “Drug Policy” that is part of the 177-page agreement.

It’s unclear where cannabis reform ranks among the coalition’s long list of promises.

The parties also have said they plan to review the law after four years to weigh its social impact.

The three-party coalition is poised to take power from the current conservative government as early as December, also pending ratification of the agreement.

‘Almost no details’

Alfredo Pascual, vice president of investment analysis at Seed Innovations, told MJBizDaily that the agreement is confirmation the incoming government intends to legalize adult-use cannabis.

“But the timeline until a recreational market will be established is largely unpredictable at the moment,” Pascual said.

“With almost no details provided in the coalition agreement document, ‘legalization’ could end up meaning many different things.”

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Pascual noted that an actual legalization bill still needs to be drafted and approved.

Any law and regulations, yet to be drafted, would carve out an addressable adult-use marijuana market for businesses.

Final approval could face resistance by the Bundesrat, which represents the nation’s 16 federated states at the federal level.

The Bundesrat, the second legislative chamber that acts as counterweight to the Bundestag federal parliament, will continue to be controlled by the conservative party of outgoing Chancellor Angela Merkel for at least the next year or two, “maybe longer depending on future local elections results,” said Pascual, a former MJBizDaily journalist.

“There are also international implications, possibly challenges, at the EU and U.N. level that incoming policymakers will have to consider when they go through the actual legalization process.”

The European Union reference is to the Council Framework Decision 2004/757/JHA, and the United Nations reference is to the 1961 Single Convention on Narcotic Drugs.

The agreement between the three parties is available here (in German).

Luxembourg update

Also Wednesday, neighboring Luxembourg released more details about its upcoming cannabis legalization and decriminalization.

Luxembourg has backpaddled on its earlier pledge to establish a regulated market for the sale of adult-use cannabis.

The latest plan will permit the cultivation of up to four plants per household, but sales will not be allowed.

The small country also plans to give a mandate to the Ministry of Justice to prepare a draft bill, in cooperation with five other ministries and judicial authorities.

Possession in public will be allowed so long as it doesn’t exceed 3 grams, per the proposed rules, but consumption in public will not be permitted.

That might portend a heavily bureaucratic system that leaves almost no room for profit by private enterprise.

Luxembourg’s latest announcement is available here.

Matt Lamers can be reached at matt.lamers@mjbizdaily.com.