South African cannabis producers have gained a significant foothold in the European market, thanks to a major deal between Nexus Pharma and German medical cannabis distributor Enua. The agreement marks a step forward in connecting SAHPRA-licensed cultivators with Germany’s booming cannabis sector.
Strengthening Ties Between SA and Germany
Lars Möhring, Managing Director and founder of Enua, recently visited South Africa to establish long-term relationships with local growers. His company has placed an initial order for 10 tons of cannabis biomass through Nexus, which is developing two state-of-the-art processing facilities in Gauteng and the Western Cape.
Western Cape Hosts German Cannabis Delegation
On March 10, 2024, Möhring and a delegation of Enua executives, including shareholder Wolfgang Hoever and CEO Albert Schwarzmeier, arrived in Cape Town. The visit aimed to solidify their supply commitment and explore additional investment opportunities within the South African cannabis industry.
The delegation received a warm welcome from South African officials, including Deputy Minister of Public Service and Administration Pinky Kekana and representatives from the Western Cape provincial government. Their itinerary included a visit to Nexus’ under-construction Malmesbury processing facility, a key site in South Africa’s growing cannabis export industry.
A Booming Market for Medical Cannabis in Germany
Enua is a major player in Germany’s medical cannabis industry, which consultancy firm Prohibition Partners estimates will reach a market value of €420 million in 2024. The company specializes in connecting cannabis cultivators with pharmacies and has historically sourced its supply from Canada. However, with Germany’s cannabis consumption on the rise, South Africa is emerging as a competitive alternative.
According to Prohibition Partners, German medical cannabis imports surged by 44% in 2024, with Q2 import figures reaching a record-breaking 11,706 kilograms, up from 8,143 kilograms in Q1. Despite Germany’s efforts to expand domestic cultivation, demand still significantly outpaces local production, leaving room for high-quality imports from South Africa.
Möhring remains optimistic about the future of cannabis imports into Germany. He notes that despite political shifts, the country’s medical cannabis market is expected to grow to €1 billion by 2028. The declassification of cannabis as a narcotic has streamlined distribution and prescription processes, leading to increased patient access.
A Major Opportunity for South African Growers
Enua’s expansion into South Africa provides a crucial export pathway for local cultivators, many of whom struggle to secure reliable off-take agreements. Möhring emphasized that while entering the EU cannabis market can be challenging, strong partnerships—like the one with Nexus—offer a streamlined route to compliance and market access.
Nexus Pharma founder and CEO Johann Slabber sees the agreement as a turning point for South Africa’s cannabis industry. Beyond its immediate impact on Nexus and its partner cultivators, the deal signals growing international confidence in South Africa’s cannabis sector.
A Sign of Growing Global Investment in SA Cannabis
Slabber believes Enua’s commitment could reignite global interest in South African cannabis investments. While the country continues to refine its regulatory framework for hemp and adult-use cannabis, its medical cannabis export infrastructure is already well-established.
“Our focus is on processing, not cultivation, ensuring we support local farmers rather than compete with them,” Slabber explained. “By offering EU GMP-certified processing facilities, we eliminate the compliance burden for farmers, making exports to Europe far more accessible.”
Reducing South Africa’s Cannabis Surplus
The 10-ton order from Enua is expected to be fulfilled over the next 12 months. This deal is crucial in addressing South Africa’s growing surplus of medical cannabis, which has built up over the past three years. Slabber pointed out that fewer than 25% of SAHPRA-licensed cultivators are currently exporting, leaving substantial capital locked in unsold stock.
As South Africa’s cannabis industry continues to evolve, strategic partnerships with Enua could pave the way for a more stable and profitable future for local cultivators. With Germany’s demand for medical cannabis rising, South Africa’s competitive pricing and improving quality standards position it as a key player in the global cannabis trade.