Germany legalized medical marijuana five years ago but the new proposal of the left-green coalition government may add it to a short list of countries where pot smoking is legal.
Lauterbach did not provide a clear-cut timeline for the adoption of the draft legislation, arguing there were more pressing issues at hand. But he said that "if everything goes well, I could imagine it becoming legal in 2024."
Some four million people admitted to having smoked marijuana in the past year, a quarter of them underage consumers, according to the ministry.
Lauterbach said he had been opposed to legalization, but a "flourishing black market" with associated criminality and a rise in the production of stronger cannabis convinced him that a new law would deliver better youth protections.
The German government on Wednesday published the draft law to legalize cannabis for further submission to the European Commission for consideration.
"The Federal Government would like to allow the controlled sale of cannabis to adults for personal consumption, with an emphasis on protecting youth and health. For this purpose, the cabinet has approved the draft document that contains the key conditions and should become the basis of a future bill," the cabinet said on the website.
The draft law will permit possession of between 20 and 30 grams of dried cannabis leaf. Production will be restricted to Germany and distribution will only be allowed in licensed shops and drugstores, with adults allowed to grow up to three cannabis plants.
According to the draft law, each shop will have to verify the age of consumers before selling cannabis. Licensed suppliers and producers will have to be under strict supervision to limit the influence of organized drug crime and the black market. Advertising of cannabis will be strictly prohibited. The government also proposed that minors will not be legally punished for using drugs, but will be required to participate in prevention programs, for example.
Lauterbach suggested that a cap on the maximum strength of the psychoactive substance THC in cannabis products was also being considered.
Germany will submit key points of the draft to the European Commission for a pre-evaluation and expects a quick response, the minister said. The EU executive has the power to torpedo the plan.
"If this law comes it will be, on the one hand, the most liberal cannabis legalization project in Europe and, on the other, the most strictly-controlled market in terms of decriminalization and youth protection," he said.
According to a poll held by the Civey polling institute for the Augsburger Allgemeine newspaper in November 2021, 43% of Germans supported the legalization of cannabis, 43% opposed the idea, while 14% said they were not sure.