Luxembourg has called on its EU neighbours to relax their drug laws as its health minister confirmed plans to become the first European country to legalise cannabis production and consumption.

“This drug policy we had over the last 50 years did not work,” Etienne Schneider told Politico. “Forbidding everything made it just more interesting to young people … I’m hoping all of us will get a more open-minded attitude toward drugs.”

Residents over the age of 18 are expected to be able to buy the drug for recreational use legally within two years. The state will regulate production and distribution through a cannabis agency.

Draft legislation is expected to be unveiled later this year providing further detail on the types of cannabis that will be on sale and the level of tax that will be imposed.

Schneider said the legislation was likely to include a ban on non-residents buying cannabis in order to dissuade drug-tourism. Home-growing is also likely to be prohibited.

Profile Cannabis: a history Show Cannabis: a history The earliest written reference to cannabis comes from China in the third millennium BC, but archaeological evidence suggests that hemp, probably for use in fabrics, was cultivated as early as 8,000BC. Native to Central Asia and India, the plant – known as ganja in Sanskrit – appears to have been recognised for its psychoactive properties among several pre-Christian cultures, some of which used it in rituals. It was banned in parts of the Islamic world in the 14th century, not to mention in some British colonies, but was not widely proscribed across the world until the US took against it. A series of regulations in the US culminated in the Marihuana Tax Act of 1937 that banned possession or transfer of the drug, except for medicinal use. But it was not outlawed for all types of use until 1970, as the establishment reacted to hippie culture – a crackdown that continued with President Nixon’s so-called “war on drugs”, which saw the US place pressure on international governments to follow suit. While countries such as the Netherlands have long defied such pressure, tolerating both medicinal and recreational use, international momentum towards legalisation has only begun to pick up in recent years with relaxation of the law in North America. California kicked off the legalisation of medicinal cannabis in 1996, several states had legalised recreational use by 2012 and a majority of states had legalised medicinal cannabis by 2016. It remains illegal under US federal law. Canada lifted a ban on recreational use in 2018, while the UK legalised medicinal marijuana in the same year, albeit subject to tight restrictions. According to the World Health Organization, there are about 147 million cannabis users worldwide, some 2.5% of the global population. While the US market is exploding thanks to liberalisation of laws at state level, Europe is predicted to be the world’s biggest and most lucrative market for medicinal cannabis. Photograph: PR

Minors aged between 12 and 17 would not be criminalised for possessing five grams or less of the drug, but those who break the more generous laws will be hit with harsh penalties under the plan.

Schneider said he was keen to encourage other EU countries to follow Luxembourg’s path.

A government coalition agreement between the Liberals, the Social Democrats and the Greens provides for legalisation within five years.

If put into action, Luxembourg would join Canada, Uruguay and eleven US states in flouting a UN convention on the control of narcotic drugs which commits signatories to limit “exclusively for medical and scientific purposes the production, manufacture, export, import distribution, trade, employment and possession of drugs” including cannabis.

Luxembourg has already legalised the use of cannabis for medicinal purposes. Possession of small amounts for recreational use has also been decriminalised, but its purchase, sale and production remains illegal.

Schneider and Luxembourg’s justice minister, Félix Braz, visited a greenhouse in Smith Falls, Canada, last year to witness the mass production of cannabis by the Canopy Growth Corporation.

Uruguay became the world’s first country to create a legal national marijuana marketplace when it legalised the drug in 2013, and Canada followed suit in 2018.

Canadians are able to order marijuana products on websites run by provinces or regulated private retailers and have it delivered to their homes by post.

Luxembourg will follow Canada in legalising the possession of 30 grams of cannabis. Tax revenues will be reinvested in drug education and addiction treatment programmes.

Two representatives of the Consumer Choice Centre, a US-based NGO, travelled to Luxembourg in April to offer their advice on legislation.

One area of contention is whether to ban the use of cannabis in public, which risks discriminating against tenants and people of limited means. The officials recommended allowing use of the drug in specific public areas.

In the Netherlands, possibly the European country most associated with a relaxed attitude toward the use of cannabis, its recreational use, possession and trade is technically illegal. It has a ‘tolerance policy’, or gedoogbeleid, under which recreational use is largely accepted within bounds.

Cannabis remains illegal to possess, grow, distribute, sell or grow in the UK. Those caught with the drug face a maximum of five years in prison, an unlimited fine or both. Several police forces have said they will no longer target recreational users and those with less than an ounce (28 grams) can be given a warning or on-the-spot fine.

Legalise it: the status of cannabis around the world

Uruguay legalised the recreational use, production and sale of cannabis in 2013. Only pharmacies are allowed to sell the drug and there are fewer than 20 doing so in a country of 3.5 million people. Customers have to register with the regulator and then are limited to buying 10 grams a week. Four different strains are available.

Canada legalised the possession of 30 grams of cannabis, dried or fresh, for those aged 18 or over in 2018. The drug can be bought from a provincially-licensed retailer. In provinces and territories without a regulated retail framework, individuals are able to purchase cannabis online from federally-licensed producers.

Under the Netherlands’ gedoogbeleid, prosecutors turn a blind eye to the breaking of certain laws. Technically the possession, use and trade of the drug is illegal, but the authorities allow licensed coffee shops to sell cannabis from their premises, and to keep 500g on site at any time. The police turn a blind eye to those in possession of 5g or less. Because production remains illegal, however, cafes are often forced to do business with criminal gangs to source the drug.

The UK outlawed cannabis in 1928. Possession comes with a maximum of five years in prison, an unlimited fine or both. Those who are successfully prosecuted for producing and supplying the class-B drug face up to 14 years in prison, an unlimited fine or both. Police can issue an on-the-spot fine or a warning for those caught with less than an ounce if it is deemed for personal use, but several forces have said they will not target recreational users.