What does the new Industrial Hemp Liberalisation Act (NLG) mean for the hemp industry?

Germany has introduced significant reforms to its industrial hemp industry with the approval of the "Industrial Hemp Liberalisation Act" (Nutzhanfliberalisierungsgesetz - NLG). These changes simplify the regulatory framework for farmers and businesses, offering legal clarity and new opportunities for growth in the sector. Key elements of the reform include the removal of the restrictive "misuse clause," which finally allows the usage of industrial hemp flowers with THC levels below 0.3%, and the allowance of indoor cultivation.

Abolition of the "misuse clause" and whole plant approach

One of the most important aspects of the latest hemp reform in Germany is the allowance of hemp flowers with a THC content of less than 0.3%. Previously, these flowers were restricted by the “misuse clause”, which posed significant legal challenges for producers and sellers. This clause criminalised the entire supply chain if there was even a theoretical possibility of industrial hemp flowers being abused for psychoactive purposes despite its low THC content.

With the removal of this clause, industrial hemp flowers with a THC content of less than 0.3% are now fully authorised for sale, bringing significant economic benefits to farmers and businesses. This also provides greater legal certainty for farmers, growers and retailers, who no longer run the risk of being prosecuted for the misuse of low-THC hemp products.

Kiosks and other retailers are now also allowed to sell CBD flowers, further improving consumer access to these popular products. This change not only ensures legal certainty for businesses, but also opens up a high-quality market for CBD flowers.The allowance also simplifies the cultivation process for industrial hemp and makes it easier for farmers to enter the market. By clearly stating that industrial hemp with a THC content of less than 0.3%, including its flowers, is fully allowed to use, the reform removes previous legal uncertainties.

This is particularly important for the “whole plant approach”, which encourages the use of all parts of the hemp plant to minimise wastage and maximise profitability. The market for hemp flowers is particularly lucrative as buyers tend to pay higher prices for CBD-rich flowers compared to other parts of the plant such as seeds or fibres. This market expansion offers new revenue streams for farmers and businesses, making industrial hemp cultivation an economically viable option.

Indoor cultivation of industrial hemp

Another notable change is the legalisation of indoor cultivation for industrial hemp. This development is crucial for increasing the quality and control over the growing environment, leading to more consistent and higher-quality yields. Indoor cultivation also extends the growing season and enables farmers to optimise production throughout the year, further boosting profitability.

The ability to grow industrial hemp indoors gives farmers greater flexibility and aligns the sector with modern agricultural practices that rely on controlled environments to improve efficiency and output. This flexibility supports innovation and growth within the hemp industry, allowing for more precise cultivation techniques and higher product standards.

Hemp as a plant-based smoking product

In a move that further expands the industrial hemp market, the new regulations clarify that hemp can be sold as a plant-based smoking product. This recognition allows industrial hemp to be marketed and sold alongside traditional smoking products, creating new commercial opportunities for hemp producers. The allowance of the sale of hemp flowers as a smoking product opens up an additional market for farmers and retailers, offering consumers an alternative to tobacco and cannabis.

Conclusion

Germany’s Industrial Hemp Liberalisation Act (NLG) represents a significant step forward for the hemp industry, removing outdated regulations and providing clear guidelines for cultivation and sale. By abolishing the "misuse clause," simplifying the cultivation process, allowing indoor growing, and clarifying the legality of hemp flowers with less than 0.3% THC, the government has created a more favourable environment for farmers and businesses.

The legalisation of hemp flowers, in particular, is a key development that supports the "whole plant approach" and opens up a lucrative market where buyers are willing to pay premium prices. This, combined with the ability to sell CBD flowers in kiosks and the recognition of hemp as a smoking product, provides farmers with multiple new avenues for generating income. These reforms can be expected to drive growth and innovation in the German hemp sector.