Germany’s cannabis industry has been evolving rapidly, fueled by major legislative reforms. However, the upcoming federal elections on February 23 could determine the future trajectory of cannabis regulation in the country. The Social Democratic Party (SDU) has played a significant role in expanding medical cannabis access and introducing limited recreational reforms. But with the right-leaning Christian Democratic Union (CDU) leading in the polls, potential policy shifts could impact the industry’s momentum.
The Growing Medical Cannabis Market in Germany
Surging Demand and Falling Prices
Germany’s medical cannabis sector has witnessed remarkable growth. A report by Frankfurt-based Bloomwell GmbH highlighted a sharp increase in cannabis prescriptions, with demand reaching new highs. Despite this surge, cannabis prices hit an all-time low in Q4 2024. Some strains were sold for as low as 3.99 euros per gram, and the average price per gram in November dropped to 8.35 euros from 9.27 euros in January.
Niklas Kouparanis, CEO of Bloomwell Group, expressed surprise at the price drop. “We expected rising demand to push prices up, but the industry was well-prepared,” he said. While patient numbers continue to grow, the possibility of oversupply looms as cultivators expand their production capacity.
Opportunities for International Cannabis Companies
Germany is on track to become one of the world’s largest medical cannabis markets, surpassing an annual supply run rate of 100 tonnes. International players, particularly from Canada and the U.S., are positioning themselves to capitalize on this growth.
- Curaleaf Holdings, a New York-based cannabis giant, acquired a 55% stake in Germany’s Four 20 Pharma in 2022, strengthening its foothold in the market.
- In 2024, Curaleaf expanded further by acquiring Northern Green Canada, reinforcing its European strategy.
- Canadian firms remain dominant in cannabis imports, with new entrants continuously emerging.
Deepak Anand, principal of ASDA Consultancy Services, emphasized that Germany’s medical market offers a straightforward entry for companies due to easy access to prescriptions and pharmacy distribution.
Germany’s Evolving Cannabis Regulations
Major Reforms and Their Impact
Medical cannabis has been legal in Germany since 2017, but strict regulations initially limited patient access. A pivotal reform took effect on April 1, 2024, removing cannabis from the narcotics list. This change simplified the prescription process, leading to a significant increase in medical marijuana patients.
Under the new system:
- Patients can obtain prescriptions through telehealth consultations.
- Licensed pharmacies serve as the sole distribution channel.
- The stigma surrounding cannabis use is decreasing, improving patient access to treatment.
Recreational Cannabis: Social Clubs and Decriminalization
Germany’s Cannabis Act, passed in 2024, introduced a regulated framework for non-commercial cannabis use. Key provisions include:
- Cannabis Social Clubs: Members can cultivate cannabis collectively, but sales remain prohibited.
- Decriminalization: Adults can legally possess up to 25 grams of cannabis in public and 50 grams at home.
- Home Cultivation: Individuals are permitted to grow up to three cannabis plants for personal use.
These measures mark progress, but they fall short of full-scale commercialization.
What Lies Ahead: The Future of Adult-Use Cannabis in Germany
The Potential Impact of the February 23 Elections
The CDU’s expected victory raises concerns over potential rollbacks in cannabis reforms. However, any governing coalition will likely include pro-cannabis parties such as the Social Democrats, Free Democrats, or Greens, which could temper restrictive policies.
Adult-Use Pilot Programs and Market Expansion
Germany is poised to introduce adult-use cannabis pilot programs post-election. These initiatives would allow selected companies and research institutions to sell cannabis products under government supervision. Industry experts predict that this could pave the way for more commercial dispensaries, tax revenue benefits, and an expanded consumer base.
Jamie Pearson, president of New Holland Group, foresees a gradual shift toward a U.S.-style dispensary model, where consumers can legally purchase flower, edibles, and concentrates. He also anticipates increased cannabis tourism, with Germany emerging as a key destination for recreational users.
Challenges and Competition
Despite progress, the illicit market remains a major competitor due to its lack of regulatory costs. Additionally, the affordability and accessibility of medical cannabis may hinder the growth of recreational sales.
Pearson explains, “The biggest competition will be the medical market, where cannabis is often cheaper and more accessible.”
Conclusion:
Germany’s cannabis sector stands at a crossroads. With expanding medical access, decriminalization, and impending adult-use pilot programs, the market presents vast opportunities for domestic and international players. However, political uncertainty and regulatory challenges could influence its future trajectory.
For industry stakeholders, the coming months will be critical in shaping Germany’s cannabis landscape, determining whether it remains on a path of progressive reform or faces potential policy setbacks.