Adult Cannabis Regulation Bill Presented in the Spanish Congress

When will cannabis be regulated, after the cannabis regulation bill was presented in the last legislature?

Today marks two years since the Bill on the Comprehensive Regulation and Control of Cannabis for Adults was presented in the Spanish Congress of Deputies on 6 October 2021.

At S&F Abogados we had the pleasure of coordinating the drafting and design of this bill, commissioned by the Unidas Podemos Confederal Group, whose parties are now part of the Sumar coalition led by Yolanda Díaz.

After it was presented, the bill was not passed because of the political context at the time. It lacked the necessary support, mainly from the Socialist Party (PSOE), and the legislature also ended early when a snap election was called.

Two years on, we want to revisit the presentation given in the Ernest Lluch room of the Congress of Deputies, in particular the talk by our founder and co-director Bernardo Soriano, who explained in depth all the technical and regulatory aspects of the bill, and that of Lucía Muñoz Dalda, then a member of Congress, who led the initiative politically and set out the reasons and political lines behind it.

The event was also attended by civil society, cannabis social clubs, cannabis associations, representatives of seed banks, hemp growers, CBD producers and sellers and, in short, all the players in Spain’s cannabis sector.

We hope the current legislature will finally see the approval of the regulation law that the cannabis sector, and society in general, so badly need to end the nonsense of cannabis prohibition, all the more so with the imminent regulation of cannabis clubs or marijuana associations in Germany.

Below we share the transcript of the presentation along with the video of the event.

Presentation of the conference ‘United for the comprehensive regulation of cannabis’

Lucía Muñoz Dalda:

I am joined by Bernardo Soriano and Juan Moreno to present the Unidas Podemos bill. I will explain the political criteria behind the law, then Bernardo will go through the proposal from a more technical point of view, and then Juan will talk about the amendments we have proposed to the ‘gag law’. So, to begin, this law is inclusive: it seeks to include the whole of society, not just consumers, and to bring in all social actors, guaranteeing simple and transparent access to the system for society as a whole. It is also a law that facilitates the transition to the legal market, with integration measures for the part of society that has historically been discriminated against by these laws, and its measures focus on correcting these imbalances.

The law is also designed with long-term sustainability in mind, and it calls for political decisions on cannabis to be aligned with national sustainable development and environmental guidelines and strategies. For example, large-scale indoor production is restricted to renewable energy, while outdoor and greenhouse cultivation is encouraged through tax advantages and lower fees. It is also a law with a gender perspective, in the sense that presenting this regulation is itself an attempt to correct a gender imbalance, since women are particularly exposed to the negative effects of prohibition. It also aims to create wealth and protect labour rights in the cannabis sector. It prioritises rural development: the whole licensing system is designed for depopulated areas, and also for places outside the mainland that face disadvantages such as insularity, helping to boost the economies of these territories by regulating cannabis production. It facilitates and promotes innovation, development and research on the plant and its agro-industrial applications, and it proposes more information on the risks and harms of cannabis use.

The text also includes tools for continuous monitoring and evaluation of its legal application and the achievement of its objectives, and, as was explained in one of the panels, it seeks to fit within the international framework, with all the complications that entails. But we have found the formula through flexibility and the interpretation of the international treaties, as other territories have done, as we heard here in previous months, in Uruguay, Canada and the United States.

Finally, it is a law characterised by strong State control. We introduce a regulatory institute, a regulatory agency, along the lines of Uruguay, which is also equipped with an effective technological tool to monitor all processes in real time, in order to prevent or, where necessary, detect and penalise irregularities.

With that, I will hand over to Bernardo Soriano, who has been our legal adviser and played a key role in drafting the proposal, so he can give the more technical details of the text. Then Juan Moreno will speak, and I really hope we can be quick so that we can give you the floor; one way or another we need to make time for everyone who wants to speak. Thank you very much.

Bernardo Soriano:

Good afternoon, everyone. First of all, I would like to thank the Unidas Podemos Confederal Parliamentary Group for trusting me to help them make this project, this bill, a reality, and I would also like to thank all my colleagues from all the organisations here today. We have been working together for many years, and as you know some of them have not been easy, but I think that now, in this very important final stretch, we need to focus on convincing the PSOE that cannabis regulation is possible. This proposal has been made with the utmost respect for all the different realities and with knowledge of everything the sector has been through over so many years, but it can certainly be improved, and that is exactly why we are all here: to contribute, add value and make the best possible law.

I will try to explain how this law was developed and what it regulates. It is rather dense, so I will try to keep it simple; I hope I manage. Thank you for your attention.

First of all, this bill seeks to implement comprehensive and complete regulation of all the activities that today operate, to a greater or lesser extent, illegally, and in some cases of activities that do not yet exist but should be an alternative to informal markets. We are very used to talking about home growing and social clubs, but most users buy Moroccan hashish on the black market, and these people must also be brought into regulation. The bill separates access through self-management and cooperative management, that is, home growing and cooperative social clubs, which is what we have called the classic social club model, cross-cutting, horizontal, democratic and participatory, from the model that, in the absence of regulation, has been stretched and now works in a way far removed from the original club model.

In the regulated market there would be different types of licences: access licences, covering licensed social clubs and cannabis and non-psychoactive cannabis dispensaries; and on the production side, licences for the production of cannabis products, for producing flower but also covering nurseries that produce and sell cuttings, as well as processing and extraction licences, seed production and marketing licences, and micro-producer cooperatives, which are a new model I will explain shortly; and then other licences complementing the regulated cannabis market, which you can see here.

This regulation provides for State control tools, as in other places: in this case the Cannabis Control Agency, which regulates all activities, develops the regulations and communicates with the various regulated market organisations to monitor the system and prevent abuses. It does so through a technological tool similar to those used in other places that have regulated, such as Uruguay and many US states like Colorado, using what technology offers to make regulation efficient and controllable. It must be said that users are not monitored and there is no register of users; what is monitored are the activities of these companies, so that they fit into and respect the legal framework. There is a fundamental issue we all know about: the problems linked to industrial hemp and the very restrictive interpretation applied by the Spanish medicines agency, which is causing very negative consequences. People are going to prison for a product that is not psychoactive. Unfortunately, Spain does not have the power to regulate industrial hemp, as it falls under the EU’s Common Agricultural Policy and cannot be restricted or controlled, but what it can do, as other markets have done, is regulate non-psychoactive cannabis. So the bill controls the production and distribution of non-psychoactive cannabis up to 1% THC. What this law can also do is support and bring order to the industrial hemp problem: it lays down in law that anything below 0.3% THC, in line with the European Commission’s recent decision to raise the limit from 0.2% to 0.3%, cannot be considered psychoactive. Although we cannot regulate hemp because we lack the powers, we do clarify this highly relevant situation. Another key point: in a social cannabis crop, in home growing and even under a production licence, adult-use cannabis genetics are obviously not registered, and that causes problems. With this bill we have sought to liberalise starting material. This is nothing new, it has happened elsewhere, but it means that users, clubs and licensed companies can use genetics without any restrictions, unlike, as you know, the pharmaceutical market and pharmaceutical production with the problem of lawful origin. We believe this is a fair liberalisation that the sector deserves.

The law also regulates the amounts that may be possessed and carried in public. The figure we have all come to accept, 3,650 grams, was fought hard for by a particular section of the movement until it became a mantra, and it has been respected. In line with that amount, the bill sets the rest of the amounts for extracts and for products made with cannabis, which may not be a full reality right now but, as Santiago Ongay pointed out in his earlier talk, could become one, so we need to anticipate and provide for them. The amounts for personal consumption also follow this logic and respect the limits set by the Supreme Court in repeated judgments. This shows visually how home growing would be limited. For outdoor cultivation we are talking not about a number of plants but about a volume. This comes from the Podemos Cannábico Circle, which included it in its proposal; we think it should be respected because it is a very objective measure that prevents abuses, so you do not get plants of 3 kilos or 3 grams with such disparity. Indoors, lighting power and space are limited to what is reasonable, basically equivalent to an accumulated production of 3,650 grams.

The question always arises of how today’s cannabis association models, which differ greatly from one another, will adapt to the new context created by the regulated market and to cooperative access. Today we can distinguish various models: from collective growing by three people who do not live together, who grow every year and share their cannabis, to cannabis social clubs with a traditional classic model; activist associations where people simply consume on the premises without dispensing; cannabis social clubs that have evolved into more managerial models, which, as you know, are 90% of them; and even social clubs that do not grow at all and buy jointly. Obviously the prohibitionist context and the repression of recent years have led to this model, since buying is safer than growing. This is how they would adapt. The first two would move to the cooperative model; for associations without dispensing there is a consumption lounge licence for non-profit associations, which would not require any fee or tax; and the other models would move to the more commercial, managerial model of licensed cannabis social clubs and cannabis dispensaries. On cooperative cannabis social clubs, just a few brief notes, as the text is there and we cannot go into every type of licence or we would be here for three hours: basically there is a production limit of 90 kilos. These amounts have not been set arbitrarily; we analysed the various technical documents and contributions from civil society organisations. We obviously did not want to limit the number of members, given the constitutional problems this could raise, but we did respect the limit of 3 grams per person per day which, as you know, is established for prevention and risk reduction. This type of cooperative management pays no fees or taxes and is restricted to residents.

The cultivation limits, also in line with the limits set in the proposal, apply to outdoor and indoor growing, broadly in line with this production, that is, the maximum annual dispensing for each person. In addition to production, there would be an area for mother plants and cuttings, as there is also in home growing, which I did not mention earlier. With licensed social clubs the focus changes: they would be managed not as an association but as a company, for those for whom the cooperative social club model falls short. Just as with any company, the holder of its shares can be an association, so it would be as simple as setting up a company through the association and running that company as an association. This model obviously has much stricter State control than cooperative social clubs. It covers the production and marketing of cannabis products, including processing; if they want to carry out solvent extractions, an additional licence would be required, solely to certify the processes and safety of this type of extraction; and they can distribute through up to three points of sale belonging to the organisation. This law limits vertical integration in all its activities: seed production can only be sold to grow shops, and cannabis production and processing companies cannot sell products directly but must respect this separation. The only vertical integration allowed is for cooperative social clubs and licensed social clubs.

We would also establish cannabis dispensaries and non-psychoactive cannabis dispensaries, which would not produce but would buy from production and processing licence holders to supply these channels. This is designed precisely to achieve an effective transition for informal users, not so much club and association members as those who buy on the street, so that they have access as they might, for example, at tobacconists. The 1% THC limit applies to all products that can be sold in non-psychoactive cannabis dispensaries. As for the production licence, you can see its various options; we have wanted to limit it strongly and respect the 2030 Agenda objectives. In line with contributions from other organisations and activists, we wanted to strictly limit the carbon footprint; we had feedback from other regulated markets that are having many problems with this. It is a strategic issue for the law. Many people will think 90% of own renewable production is too much, but the aim is precisely to limit indoor growing and make everything follow ecological criteria, and fortunately here in Spain we can grow cannabis outdoors or in greenhouses.

This chart shows the different products a production licence holder could make: cuttings and mother plants to sell to grow shops and licensed social clubs, flower production for processing licence holders, non-psychoactive flower sold directly to non-psychoactive cannabis dispensaries, psychoactive products to dispensaries, and so on.

Then there is the cannabis processing licence, one of the few licences that can be combined, for obvious reasons: if you grow your flowers, you will want to make your products and be able to distribute them. You will not be able to distribute them directly because vertical integration is limited, but you can make those products and process them: non-psychoactive ones can go to non-psychoactive dispensaries, psychoactive ones to dispensaries. Licensed social clubs, as companies, can also buy these products, and you could even make an intermediate product to later make another product. For the seed production and marketing licence we have also respected the principle of no vertical integration; for indoor growing it gets a reduction compared with the production licence limits, half, that is 45% of lighting consumption. As you can see, a seed company could sell its seeds to a distributor of cannabis cultivation products, which in turn supplies a grow shop, or to a licensed company to use those seeds for its production, but the sale of seeds to final customers has been limited to grow shops alone, out of respect for the historic normalisation work they have done.

The next model for producing cannabis products is one we are particularly proud of, because it is truly new and includes people who are normally left out of regulation and excluded: people who put out their five or six little plants, especially in rural areas, and thanks to them earn some money that helps them make ends meet at the end of the month or the year. This is a reality we all know about and we wanted to include it. How? Through micro-producer cooperatives, which can even work in synergy with other models and licences, and which also anchor market prices and will make licensed production companies more restrained in setting prices. The cooperative channels all these micro-producers, checks that they do not exceed the limits, collects their product, takes it to the cooperative and, of course, sells it centrally so that the micro-producers are not taken advantage of and have a stronger bargaining position. This is not new: it draws on cooperatives such as the olive oil cooperatives in Andalusia, which have been a reference in developing this model.

Another key issue is quality control. I will not repeat the arguments that have been very well made earlier, but right now someone selling on the street does not ask for your ID, as we said, and does not care whether the product was grown in a dangerous way or sold with mould, mites or other substances. Here, each product is given a unique code from the moment it is created, into which all the relevant information is entered, and every batch must be released by a quality control laboratory, which also enters the information into the software, under the product’s unique code, before informing the company concerned, precisely to prevent abuses and to make sure there are only genuinely high-quality, traceable products. The solvent extraction licence, which complements the processing and licensed social club licences, ensures that the safety requirements of these facilities are met because, as you know, solvents are volatile, explosive and dangerous if not handled with due care and attention.

This law also regulates the research, innovation and development licence, although it is limited exclusively to botanical and agronomic research; this licence would not allow experiments on people or animals, as these are subject to separate regulation and a series of European rules make it difficult to regulate this in a law. Moreover, research and development on these matters follows medical and health criteria, and this law does not regulate medical cannabis, as was mentioned at the start of the session, for reasons of strategy and legislative design, with a view to giving it a better chance of being passed.

Unlike the other two proposals that have been put forward, this bill does not allow cannabis use in public places. We think it would be very hard to convince the PSOE to allow cannabis smoking in the street when the trend is precisely towards denormalising tobacco use and not drinking alcohol in the street. Since public use is not allowed, the bill creates spaces where people can consume: cannabis consumption lounges can be set up in legal entities or organisations, restricted to adults, occupying up to 25% of the premises, and of course also in cooperative social clubs and licensed social clubs. Another thing regulated are distribution licences, which have three functions. First, moving all products between the different facilities of the regulated market. As Lucía pointed out, this regulation rewards areas with low population density, precisely to try to repopulate them and change the production model: if we had an independent production facility or a licensed social club in Soria, where there are fewer than 100 inhabitants per square kilometre, it could pay a lower tax rate than one in the Barcelona metropolitan area. Distribution licences would also be used to move products between regulated market companies, or to take the finished product from licensed social clubs and cannabis dispensaries to the final customer. Delivery is a reality, and it must also be regulated.

To finish, this slide shows how all these activities would fit into the regulation. With these names they currently take place clandestinely and informally: seed production, cannabis production, licensed social clubs, and all the workflows between the different regulated market companies in the various operations involving THC-free products, cannabis seeds, cuttings and mother plants, non-psychoactive cannabis products, cannabis products, herbal cannabis and non-psychoactive cannabis.

I will not go on any longer. Thank you very much for your attention. We welcome any contributions you think appropriate, with the ultimate aim of creating a legal framework that gives us security once and for all. I think we deserve it, and we are closer to it now. Thank you all very much for your attention.

Juan Moreno:

Thank you, Bernardo, for that excellent presentation of the text we have worked on, especially for summarising it so well in so little time.

I am Juan Moreno, adviser to the parliamentary group. I work here on the Constitutional, Interior and Justice Committees, and I am also a member of the federal leadership of Izquierda Unida.

My role is perhaps to deal with the issues where we can make progress now, as opposed to the bill we are proposing, which goes much further. In this case, that means the Public Security Act, which is currently at the committee report stage here in Congress. A few weeks ago we reached an agreement in principle with the Socialist Party to unblock this law, which has been stuck for a year and a half since the PNV tabled its bill to reform it, and in recent months, especially in recent weeks, the Basque nationalist party has been keener to unblock it.

Certain aspects of the reform have caused a lot of controversy and have stirred up the police politically, especially the hardest-line sections of the police, but issues relating to cannabis possession, or to cannabis in general, have perhaps been overlooked. As you know, several articles of the Public Security Act affect possession, consumption, the public display of plants and even whether an administrative penalty can be suspended.

The most significant point, which you will probably already have read about in the media, is that we have reached an agreement with the PSOE on the most important penalty in Spain under the Public Security Act, consumption and possession in public places. After a month and a half of negotiations, which were one of the main areas of agreement with the PSOE, we have at least made progress: this penalty, previously classified as a serious offence and punished with a fine of 601 to 10,000 euros, if I remember correctly, will become a minor offence, which is the PSOE’s position, once the bill passes its reading in Congress, goes to the Senate and comes back here.

Once passed, the fine will be 100 to 600 euros, not for mere possession, as you know. This is the most important penalty in that law: according to the latest figures I have found, from 2018/2019, there were 300,000 fines for cannabis possession. Almost all of them are for possession, because consumption is very hard to penalise: they can catch you with a joint in your hand, but it is almost impossible, as you throw it on the floor and stamp on it. What really matters is anyone carrying some kind of substance in their pockets, a backpack or the car.

We have proposed an alternative amendment to the possession penalty, under which substances that do not cause serious harm to health, that is, cannabis, would no longer be penalised. There are a few other substances, mostly of pharmaceutical origin, that could also fall into this category, but let us say that 99% of penalties relating to substances that do not cause serious harm to health would concern cannabis. This proposal not to penalise, which we submitted at the amendment stage, will be discussed in the committee. I encourage you all, during the roughly two months the committee stage of the Public Security Act will last, and since Article 7 will come up towards the end, perhaps in late January, to keep up the pressure on the Socialist Party, and let us see if their German social democrat counterparts convince them that things should move forward. We know it may be very difficult to remove the possession penalty without regulation such as this law, that is, how to reconcile removing the penalty with nothing else in place; simply removing it would be perfectly possible, but perhaps they are not ready to do so without regulation. In any case it is clear progress, because it takes us back to a situation even before the Corcuera Law of 1992. In the end it was a serious offence and, although in pesetas the fine might have been somewhat lower, in terms of real purchasing power the new penalty will be lower than in 1992, all the more so because we have also agreed with the Socialist Party on a system for reducing fines according to people’s objectively assessed financial capacity. Rather than the law merely saying, as it does now, that capacity is taken into account, it will be regulated, especially for people with incomes below 2.5 times the minimum wage, who could get a reduction of up to 50%, plus a further 50% for early payment if you do not appeal and accept the fine. So an unemployed person who decides to pay the fine could end up paying around 50 euros for possession. These are manageable figures, though we will have to see whether the penalty remains and whether it stays as minor.

Another point is, of course, reintroducing the possibility of suspending the fine in exchange for a cannabis treatment course, which, as you know, the Partido Popular restricted to minors in 2015. We have also proposed, though it has not been accepted for now, that this possibility of suspension should apply to other offences too, not only consumption or possession, but other penalties such as defacement, damage and so on.

Then there is a penalty that I think is rarely used but is very telling of how criminalised marijuana is: the penalty for having a plant of an illicit substance on your property or balcony. In this case we are thinking of marijuana, because I think hardly anyone plants coca, heroin or peyote; in some parts of Spain the climate might be very kind to plants, but it is usually marijuana, obviously. The PNV agrees to remove this penalty, which was introduced in 2015. We have also tabled an alternative to clearly set ourselves apart from the PSOE, because it makes no sense: we are even talking about industrial hemp here, about people already planting at home, on their properties and land, plants like CBD hemp that have no psychoactive capacity. So how can someone be fined for having a plant when we do not know whether it is psychoactive or not?

I think our proposal will have the support of parties such as Esquerra and Más País. Curiously, Más País has not tabled any amendment on the penalties in the law, although it has tabled a non-legislative motion, a little dig at our colleagues. And Esquerra and the PNV, which is ultimately a social Christian party, conservative in some ways and progressive in others, may support it too.

Let us see: for the PSOE it makes no sense, and removing this penalty would be another step, even if largely symbolic, given how symbolic it is to criminalise having a plant. It is true that in our bill the public display of plants was not protected either. But it is one thing for something not to be allowed and another for it to be penalised, and in a law such as the Public Security Act, which is not the place for it. So we have several issues to work on over the next two months. On the tangible side, we have what we want: popular support, as was said at the start of this conference, of more than 50%.

For therapeutic use, which we will talk about, support rises to over 80-90%, but we have to work with what we can, with this reality. The PSOE is moving forward step by step, and the changes the German social democrats are prepared to introduce into their legislation will obviously give a boost to what happens here. Meanwhile, we must make progress on this legislation. Police trade unions say this will make drug trafficking easier, moving possession to a minor offence; our answer, obviously, is that there should be no trafficking in this substance at all, because that is absurd.

Above all, there has to be willingness. To finish: in 2018 Spain had 300,000 fines for possession, while Germany, with twice the population, had 180,000. We are the second European country and, obviously, Germany is the first in terms of population; then come Italy, Slovakia and others. We are the country where the police are clearly most inclined to fine people who may be using cannabis, often through visual checks: ‘he’s carrying rolling papers, he’s carrying this, let’s go for him’, search him and go after possession. So I think it is important to lower this, so that the police themselves realise that, for lawmakers, this is a minor matter, and that they worry less about it and more about other things. Sorry for rushing, but time is short. Thank you.