The German government has put forward a legislative proposal to legalise cannabis, allowing citizens to cultivate, possess and consume the drug for recreational purposes, in a reform that could have far-reaching repercussions for European drug policy.

If the law is passed, Germany would become the largest country in the world by population to legalise cannabis. So far only Canada and Uruguay, along with a handful of US states, have permitted the commercial sale of the drug — though Germany will initially not go as far as to allow cannabis to be sold in commercial premises.

Karl Lauterbach, German health minister, said the country’s policy of criminalising cannabis had “failed”. “We know we can’t get ahead by just tightening the criminal law,” he said. “We are not creating a problem but trying to solve one.”