Malta First European Country to Legalize Recreational Marijuana; Others to Follow Suit

All Eyes on Malta as Cannabis Reforms Unfold

The case for legalizing recreational marijuana extends beyond simply legalizing a drug that has become more popular than ever. It’s about admitting that marijuana prohibition has failed, and that it’s time to put a dent in the black market, regulate the substance, and bring in tax revenue.

One country that has promised to do this is the tiny Mediterranean island-state of Malta.

Located just off of Sicily and the North African coast, Malta announced that it will become the first European country to legalize recreational cannabis. (Source: “Malta to Legalize Cannabis for Personal Use in European First,” The Guardian, December 13, 2021.)

Malta’s legislation will allow people aged 18 years and older to possess up to seven grams of marijuana and grow up to four cannabis plants at home.

Malta may have a population of just 525,000, but it’s setting a precedent to be followed by policymakers across Europe and around the world.

Malta is joining a growing number of jurisdictions that have adopted recreational cannabis reforms, including Canada, Mexico, and 18 U.S. states. And with rival Republican and Democrat bills circulating in the U.S., it’s only a matter of time until federal U.S. marijuana legalization is on the books.

European Marijuana Reforms Coming in 2022

In Europe, Germany’s incoming coalition government has said it wants to legalize marijuana. Under current German law, it’s not illegal to consume pot, but it is illegal to buy it. Under a new law, recreational cannabis would be regulated for quality, sold in licensed establishments, and taxed.

According to a recent study by the University of Düsseldorf, legalizing cannabis could add more than $5.3 billion in annual tax revenue to Germany’s coffers. It could also reduce annual law enforcement expenses by $1.5 billion. (Source: “Germany’s New Coalition Wants to Legalize Recreational Cannabis” Forbes, November 22, 2021.)

If Germany does fully legalize recreational cannabis, it would be the first major European country to do so. Similar moves are expected by Switzerland, Luxembourg, and the Netherlands. Moreover, Italy will be holding a referendum on the issue in 2022.

Just like the North American market, the European cannabis market is projected to experience massive growth. By 2025, the European marijuana market is expected to expand at a compound annual growth rate (CAGR) of 67.4%, reaching $3.8 billion. (Source: “The European Cannabis Report: Edition 6,” Prohibition Partners, last accessed December 13, 2021.)

That statistic is based on medical marijuana sales figures, since recreational cannabis wasn’t legal in Europe when the study was conducted. This will change as more European countries legalize recreational cannabis.

Germany is expected to be responsible for more than half of the European legal cannabis market until 2025. By then, other countries, like France and the U.K., are projected to be responsible for a “significant share of the European market.” (Source: Ibid.)

Analyst Take

2022 is shaping up to be a massive year for the legalization of recreational cannabis.

In June, recreational marijuana became legal in Mexico. With a population of nearly 130 million, it’s now the world’s largest legal cannabis market. That decision could pressure the U.S. to follow suit, since the country is now sandwiched between the two largest nations with legal pot markets.

In Europe, Malta got the ball rolling by taking the first step toward legalizing recreational marijuana. Other major European nations are expected to follow suit in 2022.