Adults will be allowed grow their own or buy from a licensed retailer.
Germany set out plans on Wednesday to legalise cannabis.
The move would make Germany one of the first countries in Europe to do so.
Health Minister Karl Lauterbach presented a cornerstone paper on planned legislation to regulate the controlled distribution and consumption of cannabis for recreational purposes among adults.
Acquiring and possessing 20 to 30 grams of recreational cannabis for personal consumption would also be made legal.
Adults will be allowed grow their own or buy from a licensed retailer.
Karl Lauterbach, says the plan has been introduced to better protect young people, who were already consuming the drug and reduce its trade on the black market.
He says if the law is passed, the new regulated market could be "a model for Europe".
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