Benelux Setting the Pace for Europe’s Cannabis Legalisation

By Oliver Bennett, Special Contributor to New Frontier Data

Benelux is an acronym fashioned from the first few letters of Belgium, the Netherlands and Luxembourg, respectively. It stems from nearly a century-old, free-trade agreement between Belgium and Luxembourg which became operational with the Netherlands included in 1948.

The post-WWII bloc became the model for the European Economic Community (EEC), which in turn informed the European Union (EU).  With Brussels as the home of the EU and the European Council, it is the representational heart of the EU to strengthen and improve cross-border cooperation at every level.

Operating as arguably the most harmonised, progressive, and liberal cannabis markets in Europe, Benelux may come to serve as the prototype for the continent’s legal cannabis industry, too.

Take Luxembourg: With a population of some 626,000 and throughout an area of 998.6 square miles, the country is among the smallest in Europe, though also the wealthiest — often cited as the world’s third-richest nation in GPD per capita ($112K), after Qatar ($138.9K) and Macao ($113.4K).

Bordering Belgium, France, and Germany – and close to the Netherlands – it has a prime position in Europe; as recent policy initiatives take hold, they may push Luxembourg past the Netherlands for the most progressive cannabis laws in the continent.

Set to legalise cannabis last year, the COVID-19 pandemic has delayed Luxembourg’s process. But it is still slated to happen and now the country has more time to address out some of its qualms, including the management of the impact on neighbouring states and the undesirable effects of “drug tourism” as seen in the Netherlands. It remains confident. The small country’s health minister, Paulette Lenert, has invited Luxembourg’s neighbouring countries to moderate their cannabis legislation in line with its future plans, and the demand for medical cannabis in the country is running high in this year of the virus, with more cannabis prescribed than in 2019 and showing a big rise in demand since its parliament approved medicinal cannabis in mid-2018. Prescriptions started last year, with an evaluative study to follow in 2021.

Luxembourg’s larger neighbour Belgium is similarly on the cusp of greater liberalisation – partly due to a legal anomaly that is causing some reconsideration in the country. Due to a classification loophole whereby hemp-derived products can be marketed as CBD, stores can sell low-THC cannabis flower (less than 0.2% THC) to consumers, and to meet the demand a new ecosystem of shops has arisen to the extent that they has been likened to the dispensaries of North America and the coffeeshops of the Netherlands.

Belgium’s treasury has noticed the increased tax takes from the new and thriving economy of smokable two-gram bags, and has regulated the industry as a tobacco product rather than foodstuff, thereby gaining a greater tax take, said to be 31.5%. The cannabis is itself imported from non-EU Switzerland, which also deploys tobacco-like taxation and is outside EU laws, and has led to a situation where Belgium became the first European country to legalise cannabis flowers, both stealing a march on Luxembourg and moving towards a Netherlands-style culture of recreational tolerance.

It is a curious scenario that among the three Benelux countries, Belgium has been the slowest to join the cannabis revolution. Still, interest in the country is gathering pace. In 2015, Belgium legalized CBD and medical products like Sativex, and while possession is still illegal, personal use laws dating back to 2003 mean that Belgians can use small amounts under three grams without prosecution. Even plant cultivation is legal, though strict THC limits, scale, and age controls apply. There is also a growing grey sector of Spanish-style social clubs, and Belgium’s intentions were on display last year when the Federal Agency for Medicines and Health Products called for the inauguration of an administrative cannabis bureau to oversee commercial cultivation and production . As with Germany, Belgium has devised plans to increase the domestic cultivation of medicinal cannabis, to about five tonnes of a year. In a new development, the country claims to have Europe’s first commercial line of cannabis bread; made from cannabis seeds, Cannabread is available this season in Brussels.

The Netherlands, as recently reported, is also trying to integrate its cannabis laws and drive out the criminal activity that has long dogged its coffeeshop sector, which relies on procurement from illicit sources.

In line with EU legislation that requires states to create a cannabis agency in accordance with the U.N. Single Convention of 1961 on narcotic drugs, the role of each Benelux country’s cannabis agencies remain crucial in determining how policy could be harmonised across the mini-bloc.

Behind the scenes, the Netherlands’ Office of Medicinal Cannabis (BMC) is looking at applications to cultivate both medical and recreational cannabis, with intentions to better coordinate and govern its own industry while designing to eliminate some of the ambiguities which have long dogged Europe’s original cannabis-friendly country. Going forward, the Netherlands initiative could impact its Benelux cohort, as each country seeks stock ahead of the 10 growers set to supply the country. Given the moves towards greater liberalisation and coordination across borderless Benelux, it is a reasonable bet that the bloc could be Europe’s first region to harmonise cannabis policy.