10 Key Takeaways: Adult-use regulation in Europe

by Gastautor

A guest byline from Benjamin-Alexandre Jeanroy, CEO Augur Associates

A century of prohibition in Europe has made the continent the first cannabis market in the world. Adhering to ideology over scientific research findings, the advocates of inaction and moral posturing have for decades remained the best allies of the traffickers. The time has come today for more accountability on the impact of cannabis policies based on repression. The question today should therefore no longer be whether or not to legalise, but very much how to do so. 

As described in the report however, there are harmful consequences for cannabis legalisation projects that have not been able to get rid of reflexes stemming from more than a century of prohibition. While other countries have started to leave behind unsuccessful public policies, the continent’s backwardness allows us to take in lessons from abroad: Uruguay, Canada’s provinces and U.S.’s states but also from Spain or the Netherlands. From these findings, the report chose 4 objectives in order of priority:

  1. Drying up the black market.
  2. Genuinely protecting European youth and shifting public health focus on problematic consumption.
  3. Giving back meaning to the professions of justice and police.
  4. Developing a sustainable European industry.

What seems clear from the findings: to implement such a transformative policy, the reform process ought to be progressive, transparent and designed in a collegial manner, including the structural integration of experts from civil society, consumers and the scientific community. Because such a process ought to take the necessary time, it is also highly advisable to establish in the meanwhile a comprehensive drug decriminalisation policy allowing for a shift towards a public health-oriented framework. This should not be perceived as endangering the reform but rather as laying it out the foundation for a paradigm shift.

Sourced from scientific studies and public policy analysis from abroad, here are 10 key takeaways from our report: “Which models for cannabis adult- use regulation in Europe?”

Drying up the black market

This number one priority goal is key to a comprehensive regulatory model and takes precedence over other objectives of the reform. As with legalisation comes the need to devise an appropriate legal and economic framework to reintegrate as many as possible into the rule of law, this objective must be built around a social justice vertebral column. This will notably allow the rebuilding of relationships between law enforcement and previously over-targeted populations by integrating a preventive community policing role while refocusing law enforcement missions on other crimes (in particular violent/domestic crimes as well as white collar’s, mauney laundering and organised crime). Around this core, comes the need to set up a legal market able to compete with the illicit one in terms of price, product diversity and quality, as well as distribution outputs. Let us keep in mind that if we do not regulate properly to meet demand, the illicit markets will do it for us. 

A diverse & suitable offer

Ensuring the production and distribution of sufficient legal supplies to meet demand is key. A competitive model will promote the quality (short circuit, regenerative and organic cultivation, valorisation of territories) and diversity of products available on the legal market (no arbitrary limitations on varieties, forms, cannabinoid levels, etc.). Distribution must integrate cannabis specialised stores, dedicated consumer spaces, online sales, delivery, and direct-to-consumer sales for micro-producers. The latter will provide life-saving financial relief to small cannabis farmers (including “legacy”) and better allow production to align with values and actions dedicated to environmental regeneration, sustainable agriculture and local soil genetics. Products sold must also provide clear and authenticated information on the genetic profile and content of by-products, as well as be supported by an affordable testing framework and a suitable seed to sale blockchain system tracker. 

Social justice

Prohibition has contributed above all to the impoverishment of low-income areas, to which the middle and privileged classes have been subcontracting their cannabis demand for decades. Hence why a sustainable and fair reform needs, not only to address the injustices caused by decades of uneven enforcement of prohibitive laws, but also to actively remove legal barriers that unreasonably prevent the participation of affected individuals and communities in the design, implementation, and assessment of cannabis laws, policies, and practices. There is indeed an absolute need to recognize that there is a need to fix what is broken before a new system can work or be implemented properly. First step concerns legal amnesty and automatic retroactive erasure of criminal records (and expungement of fines) for small-scale dealing and non-violent acts, as well as for consumption, homegrowing, local micro-production, and small possession. Comes next, proactively supporting the conversion of black market actors (outreach services, information campaign, tax, banking and regulatory/licence facilities, industry training, exchange of skills, etc.) in order to be able to tap into the pool of knowledge, interest and competences of its former players. To limit the attraction of delinquent opportunities linked to the illegal market and to act as a remedy for past policy failures in these areas, these policies must be funded first by savings from public budget relocations and by new fiscal incomes from the legal industry. 

Complementary models

If the reform ought to be successful and sustainable, the legal framework must integrate ethical complementary non-commercial short circuit ecosystems to balance a commercially-driven environment. The regulatory set up can foster good practices and sustainable standards from a private sector based on non-profit practices such as Cannabis Social Clubs (CSC) and homegrowing, as well as the Social and Solidarity Economy (SSE) and Ecological, Social, Governance (ESG). The SSE sector on one side seems indeed today to be the best placed to both respond competitively to the enormous need of the millions of consumers estimated in Europe while avoiding the pitfalls of potentially-addictive product mercantilism. ESG criterias on the other represent the adapted 21st Century Risk Management for the European cannabis industry.

Pharma is not the way

In an adult-use cannabis reform, the implementation of quasi-pharmaceutical quality control can only reinforce the black market as the offer will unequivocally bring higher pricing and lower “cannabis quality”. By definition, pharmaceutical quality production will tend towards stabilisation and reproducibility, as-well-as a limited pool of seed varieties. This is the exact opposite of what an adult-use market needs (and what consumers are willing to pay for). Adult-use cannabis consumers in a legal market will pay attention to genetic information and lineage of cultivars, quantified presence of cannabinoids and terpenes, how and where it is grown, but increasingly also whether it is grown locally, sustainably and organically, and thus progressively to terroir. A pharmaceutical production chain will not be able to correctly answer these consumer demands. Adherence to the rules of organic or living soil production should therefore be fiscally encouraged. Accessibility of testing analyses is paramount for all the supply chain ((aflatoxin, microbiological, pesticide, stability (drying, rancidity, oxidation) and genetic profile), the latter being secured through a blockchain seed-to-sale system. Ultimately, these are the only quality controls an adult-use market needs. 

Taxes & Regulatory Authority

As of today, it could be possible to make an average of 65-70% savings on public spending on cannabis in the EU, if legalisation was on the table continental wide. New budget allocations must therefore first come from budget savings and relocations rather than from new taxes. Foreign experiences call for caution with regard to taxes intended to compensate for the social cost of drugs (also known as „pigouvian taxes“), which remain counterproductive in the presence of a strong competitive illicit market. For cannabis, price outweighed ease of access as the most important reason people continue to opt for black market products. The goal here is therefore to gradually introduce taxes to limit the threshold in order to remain competitive with the illicit market while taking into account regulatory constraints (quality analysis, cultivation and distribution control, taxation, etc.). Additionally, the establishment of an independent regulatory authority that can develop a specific administrative culture related to cannabis and which can earmark and control budget savings and fiscal returns from the legal market, remains a sine qua non condition to the success of the reform. By setting a broad representative governing body including from relevant administrations, science, specialised civil society, cannabis consumers, farmers & industry, the Authority can define market standards and monitor marketing and compliance. The Authority will also take charge of fostering public/private scientific research as well as training and education towards relevant parties; ensuring statistical monitoring of cannabis consumption and production to allow sufficient responsiveness to market developments ; and attesting compliance with international obligations. 

Public health

While a prohibitive model considers that all consumption is problematic, it also allows black market dealers to sell cannabis (and potentially other narcotics) to minors. These two dimensions can be reversed within a responsible legal market. Outside Europe, legal regulation reforms have not led to a significant increase in general consumption while studies have often pointed out a notable decrease in youth prevalence. In a legal market, ensuring that minors do not have access to the product is paramount and any failure to comply should strongly be sanctioned. Implementing proactive primary and secondary prevention policies involving the socio-educational sector on the front line of contact with the youngest, as well as harm reduction and user education for teenargers and young adults can reduce the share of problematic consumers. Equally important, to promote early identification and referral of problematic consumption (integrating specific gender perspectives) by health system actors and supply-side actors, (who, for their clients, are the main intermediaries for user education). Finally, the reform could prohibit consumption in public places if it provides for individual and collective private consumption in dedicated, open and closed private spaces. 

Valorisation & protection of local territories

While a protectionist model is highly advisable in the first years of a legalisation reform, in the face of the inevitability of international commerce and certain future decrease in global production costs, Europe will only stand out from the global crowd by favouring healthy and high quality products. Reform must consider Cannabis as a dual genetic resource: natural and cultural/scientific by offering passive protection through Access and Benefit Sharing (ABS, 1992 Convention on Biological Diversity & Nagoya Protocol), and actively through the establishment of Appellations of Controlled/Protected Origin (AOC/AOP) and Protected Geographical Indications (PGI). Today, initiatives that aim to do for Californian cannabis what the AOC designations did for Champagne in France are currently being deployed on the other side of the Atlantic. Europe could establish regional or geographical indicators for cannabis products that would protect cannabis varieties and protect the heritage of European countries and the genetic diversity of the plant from continental and overseas territories. A market for cannabis centred on empowerment, local knowledge, protection of natural heritage and fair trade principles would have much to offer for the sustainable development of a global industry. These will build the foundation for an international market under inclusive and fair trade guidelines to protect small-scale farmers, notably from the Global South. 

Environmental justice & SDGs

The 2030’s United Nations Sustainable Development Goals (SDGs) call for a renewed vision of nature and a renewal of our connection with it. The multiple uses of Cannabis as a plant in its entirety can be a lever to complete them. In order to better achieve at least 64 of the 169 targets in 15 of the 17 SDGs of the 2030 Agenda, the reform must encourage and subsidise hemp-related activities, allowing for capacities to create alternatives to gasoline, plastic, and other petroleum products, as-well-as industrial and farming sustainable alternative capacities, soil-cleansing properties, CO2 sequestration, biochar uses, etc. The larger Cannabis framework must also properly legally regulate the adult-use, wellness (CBD) and medical cannabis markets to be able to achieve UN SDGs 3, 4, 5, 8, 10, 13, 16 and 17. Regulation must integrate strong rules for the respect of the land and preservation of local ecosystems through methods conducive to the creation of a virtuous agro-ecosystem, preferably around outdoor cultivation areas and greenhouses (crop rotation, compulsory area of floral meadow, hedges, ponds, energy- saving, etc.). The regulation must favour low and negative carbon impact cannabis related activities and strongly deter high-impact players and prohibit emissions beyond a certain threshold. Environmentally friendly production criteria for water management moderation, the use of fertilisers and biocides (pesticides, fungicides) and other products that are dangerous to health and the environment must be integrated. The implementation of these models must respond to financial incentives. As cannabis consumers increasingly seek out environmentally friendly companies, implementing sustainable practices in order to become fully regenerative will ultimately become a strong competitive advantage.

International obligations

Today, the emergence of national regulatory frameworks for non-medical uses, operating within a restrictive international trading system, is less of a legal-conceptual obstacle than often thought. As the European country of Malta currently shows, it is possible to legalise adult-use domestic markets in a way that meets, in good faith, full compliance with international cannabis obligations. The islands are setting an example for European colleagues by making sure that the policies and procedures they will be putting in place respect international law and give results. Two dimensions remain required: building the foundation of the reform on public health perspective and the reduction of harm; as well as communicating to the INCB the annual tonnage of use of non-medical cannabis markets. See further discussions. (DE / UK / FR / “Reviewing The Reviewers”).

About the author

Benjamin-Alexandre Jeanroy is, a former consultant to the United Nations Office on Drugs and Crime (UNODC), currently CEO of Augur Associates and board member of LEAP Europe. The report can be downloaded free of charge (also available are the Summary, Recommendations and Table of content).

Disclaimer: Guest bylines don’t need to reflect the editorial opinion.

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  • Bildschirmfoto 2022-08-11 um 23.25.57: Augur Associates

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