The first of a two part series about the potential in other markets than North America.
The U.S. marijuana market is the biggest in the world. However, uncertainty over legalization and competition on the illicit market persists. Sales have also begun to soften on other markets like Canada due to lower prices and increased competition.
Some companies are looking for other growth prospects.
“International could become a more meaningful contributor to operators’ P&Ls in 2025, with the ramping of Germany post-reform on 4/1/2024, other medical markets such as the U.K., Australia and Poland ramping, and the Netherlands continuing its adult-use pilot launch,” Alliance Global Partners wrote in its 2025 Outlook.
AGP believes that Germany offers the most opportunities.
Germany buzzes
Germany, according to a report, has experienced an increase in patient numbers, more doctors prescribing the drug, and a greater number of pharmacies that distribute cannabis. It is estimated that the total amount of cannabis imported by the country in 2024 will be 20,000 kilograms, which is double what it was before April’s reform.
In addition, the report highlighted that, in December 2024, German Federal Minister of Food & Agriculture Cem Özdemir signed a regulation that allows the Federal Office for Agriculture & Food to approve and monitor the use of cannabis for scientific reasons in research projects, even without a specific medical purpose.
There will, of course, be some bumps along the way, as cannabis is cannabis. Germany’s federal election is this month. Under a new government, there could be some hiccups in the market.
Like other legal markets, the German market can also be susceptible to price reductions. In January, the medical cannabis telehealth service Bloomwell from Germany released a study that showed that prices had reached new lows in the market in Q4 of 2014.
The price of medical cannabis per gram could be as low as 3.99 euros. In November, the price was lower than it had been at the start of the year.
Positively, the report highlighted that there was no shortage of prescription drugs in 2024, even though demand increased rapidly.
Canadians learn German
Many Canadian companies have already tapped into the fast-growing German market. Aurora Cannabis Corp., for example (NASDAQ: ACB), is present in Germany and other key European markets where medical cannabis is available. It is one of three active German producers of medical cannabis, and in July, it received its production and R&D license under the new cannabis law.
Tilray stated in its latest financial report that it was “well-positioned” in Germany. The company is one of only three authorized manufacturers and Aphria RX, its subsidiary in Germany received the very first cultivation permit. For the six-month period ending November 2024 it reported international sales of C$27.1 million. That’s up C$26.2 millions from last year, thanks to increased sales in Germany.
Organigram Holdings, Inc. (NASDAQ: OGI), also sees a potential in Germany. In the company’s amended annual MD&A from December 2024, the company said its international sales had increased sequentially throughout fiscal 2024 and “established a foothold in the rapidly growing German cannabis market through a $21 million investment in Sanity Group.”
Organigram also announced that the anticipated EUGMP accreditation of Moncton Campus would also be expected to boost its growth internationally.
Canopy Growth Corp., (NASDAQ: CGC), recently announced that the International Markets revenue in its third quarter fiscal 2025 was $12,000,000 compared with $10.5,000,000 in 2024. This was attributed to the company’s increased flower product shipments in Europe. Poland and Germany were cited as major contributors. Canopy also owns German vape company Storz & Bickel, which saw increased sales, in part due to German growth.
Cronos Group sells its products also in Germany. However, it does not break down these sales in the latest report. Cronos Group instead stated that it has higher sales in Israel as well as other international markets, including Germany and Britain.
This January, Green Market Report High Tide Inc. (Nasdaq HITI: TSXV HITI), a company that operates in Canada, has announced its intention to enter the German medical marijuana market by purchasing 51% Purecan GmbH. This purchase will cost approximately 4.8million euros. There is an option for the company to buy the remaining 50% interest at a later date.
IM Cannabis Corp. (CSE: IMCC) (NASDAQ: IMCC) announced in October 2024 that its preliminary sales results in Germany Adjupharm GmbH’s (IMC Germany) German subsidiary has significantly outperformed expectations in its third-quarter revenue. This is a 50% jump compared with the second quarter when IMC Germany had sold approximately C$3.5million.
Not only Canadians are interested in Germany’s future. Florida-based Flora Growth Corp. (Nasdaq: FLGC) did an all-stock acquisition of TruHC to provide the company with a strong foothold in the German market and the broader European cannabis landscape.
Germany’s not the only market that has green shoots. We will look at international cannabis markets in part 2.