With intense competition and an oversaturated domestic market, Canadian cannabis companies are increasingly looking beyond their borders for growth opportunities. The global cannabis export market is proving to be a lucrative avenue, offering businesses new revenue streams while helping them bypass Canada’s stringent excise taxes.
Europe: A Key Market for Canadian Cannabis Exports
One of the biggest drivers behind this export shift is the expansion of medical cannabis markets worldwide, particularly in Europe. Germany, the largest medical cannabis market in the EU, has seen a surge in imports from Canada. According to Germany’s Federal Institute for Drugs and Medical Devices (BfArM), Canadian cannabis exports to Germany nearly doubled from 16,895 kilograms in 2023 to 33,155 kilograms in 2024.
Deepak Anand, principal at ASDA Consultancy Services in British Columbia, acknowledges the growing enthusiasm around cannabis exports but warns that entering foreign markets isn’t a simple process. “There’s a lot of excitement around the export market,” he says. “But people are assuming that it’s much easier than it is. It’s not for everybody. There are barriers that you need to get around.”
Navigating Export Challenges: EU-GMP Certification
One of the biggest hurdles for Canadian cannabis companies looking to export is obtaining European Union Good Manufacturing Practice (EU-GMP) certification. Of the 900 licensed cannabis companies in Canada, only 19 currently hold this certification, making access to the European market highly selective.
Village Farms International, a cannabis producer with operations in both Canada and the U.S., is among the few companies that have secured EU-GMP certification. The company exports medical cannabis to Germany, Australia, Israel, and the UK and is actively expanding into new markets across Europe and the Asia-Pacific region. With international sales totaling $8.4 million in 2024, Village Farms expects to triple its revenue from exports by 2025.
“The European markets are taking a much more pragmatic approach to regulation,” says Sam Gibbons, Senior Vice President of Corporate Affairs at Village Farms. “There’s not as much dysfunction as in the U.S., where regulatory red tape slows everything down. European countries are allowing these markets to evolve in a way that makes sense.”
For companies without EU-GMP certification, alternative solutions exist. Some businesses send their cannabis through certified processing hubs in Europe, where the product undergoes necessary transformations before being distributed in Germany. According to Niklas Kouparanis, CEO of Frankfurt-based Bloomwell Group, around 30%-35% of Germany’s imported cannabis currently originates from Canada.
“Canada had an overproduction problem for a long time, which led to falling prices,” says Kouparanis. “Germany’s rising patient numbers and increasing demand are providing a much-needed solution to that challenge.”
Rising Competition from Other Exporting Countries
Although Canada has been a dominant player in the German market, other countries are quickly gaining ground. Portugal, for example, increased its cannabis exports to Germany by 318% in just one year, reaching 17,230 kilograms in 2024. Other key suppliers include Denmark, Spain, North Macedonia, and the United Kingdom, intensifying competition for Canadian producers.
Excise Taxes: A Major Incentive for Exporting
Beyond market expansion, another driving force behind Canadian cannabis exports is the country’s excise tax policy. Domestically, cannabis producers must pay an excise tax of either $1 per gram or 10% of the product’s sale price, whichever is higher. However, exported cannabis is exempt from this tax, making international sales far more profitable.
Adam Coates, Chief Revenue Officer at Calgary-based Decibel Cannabis Co., emphasizes the financial advantage of exporting. “Depending on the product quality and pricing, you generally make more per gram in international markets than in Canada,” he says. “Your gross revenue effectively becomes your net revenue because you’re not paying the excise tax.”
The Future of Canadian Cannabis on the Global Stage
While Canada’s domestic market remains significant, many companies anticipate that international sales will soon surpass domestic revenue. Decibel Cannabis Co. is among those shifting focus, with Coates predicting that the company’s overseas business will outgrow its Canadian operations soon.
The Canadian cannabis industry once enjoyed rapid, double-digit annual growth in its early years. However, as the domestic market matures, growth has slowed to single digits, prompting more companies to explore export opportunities. In October 2024, Decibel acquired AgMedica Bioscience, adding an EU-GMP-certified facility to its operations. This acquisition has enabled the company to export cannabis products to Australia, Denmark, Germany, Israel, Norway, Spain, and the UK.
With U.S. federal cannabis legalization still uncertain, Canada currently has a first-mover advantage in international markets. “Canadian companies would do well to establish themselves in the global supply chain before the U.S. gets involved,” Coates advises.
Final Thoughts
As Canada’s cannabis industry reaches a turning point, global expansion is becoming an essential strategy for long-term success. While challenges like regulatory compliance and increasing competition persist, Canada’s established reputation in the cannabis sector, combined with high international demand, positions it as a key player in the global cannabis trade. The international market offers a promising path to sustained growth and profitability for companies willing to navigate the complexities of exporting.