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The German Cannabis Industry Continues To Evolve

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Germany was already home to Europe’s largest legal medical cannabis market before the first provisions of the nation’s adult-use legalization measure took effect on April 1st, 2024. When the first provisions of Germany’s CanG law were enacted at the start of April, the nation also became the largest country on earth to implement national adult-use reform.

The nation’s cannabis policy and industry landscape will forever be measured as occurring before or after 2024 due to how pivotal the year 2024 is proving to be. Nearly every facet of Germany’s industry and cannabis community is evolving this year, with the most notable items listed and discussed below.

Personal Consumption

People in Germany who are 18 years old or older can now consume cannabis in private settings without the fear of prosecution and can possess up to 25 grams of cannabis when away from their residences. Cannabis consumption is not new in Germany, with 4.3% of German adults reporting that they use cannabis on a monthly basis and 8.8% reporting that they have used cannabis at least once in the last year.

However, the way that people consume cannabis in Germany is undergoing a technological revolution, with many device and gadget makers eyeing the German cannabis consumer market with their latest creations. According to a recent analysis by market researchers, the global handheld cannabis vaporizer market is projected to reach $15.9 billion in value by 2031, and Germany will play a big role in the growth of the sector.

Home Cultivation

On April 1st Germany became home to the largest potential home cultivation market in Europe, with Germany’s roughly 70 million adults becoming eligible to cultivate up to three plants in their private residences. Personal cannabis cultivation is already proving to be very popular with adult consumers in Germany, as reflected by a recent YouGov poll which found that 7% of poll participants indicated they had already purchased cannabis clones or seeds since legalization took effect. Another 11% of poll participants stated that they intend to purchase clones or seeds in the future.

In addition to clones and seeds, Germany’s newly afforded home cultivation freedoms are increasing sales of many other sector products, including growing mediums, nutrients, lighting, environmental control systems, odor control, harvesting tools, and drying equipment. Home cultivation educational programs and materials are also experiencing increased demand in Germany.

Social Clubs

Starting next month, Germany will begin permitting social cannabis clubs in many parts of the country. Social clubs are a key provision of ‘Pillar 1’ of Germany’s CanG law and will play a vital role in legally sourcing adult-use cannabis in Germany. Earlier this month the Bundestag approved new policies that afford states more authority to set limits on social cannabis clubs, so the prevalence and scope of clubs will likely vary throughout the country.

It is going to be very interesting to see how creative social cannabis club operators get once clubs are launched. The basic premise of social clubs is for adults to become members and to source legal cannabis through the social clubs that will cultivate cannabis for members. However, cannabis clubs can employ paid workers to carry out various tasks that are not necessarily directly related to the cultivation or distribution of cannabis, and clubs will likely offer ancillary products and services that could prove to be very engaging (and lucrative). Only time will tell what social club operators come up with, and conversely, what local and national regulators will allow.

Pilot Trials

‘Pillar 2’ of Germany’s cannabis legalization model revolves around the launch of regional adult-use cannabis commerce pilot trials. Pilot trials permit a certain number of entities to cultivate cannabis that is then sold to registered customers at licensed outlets. Such pilot trials are already underway in parts of the Netherlands and Switzerland with no reported issues.

Pilot trials in Germany are expected to be more widespread than what is in place in Switzerland and the Netherlands, both in the number of jurisdictions where they operate and the number of participants they will serve. German pilot trials are expected to begin by the end of the year, and when combined with social clubs and home cultivation, will serve as the foundation for legal adult-use cannabis access in Germany.

Medical Cannabis

Often lost in the hype and chaotic nature of the rise of adult-use cannabis in Europe is the fact that Germany’s medical cannabis industry is currently undergoing dramatic changes. Part of Germany’s new CanG law involved the removal of cannabis from the nation’s Narcotics List and the removal of quota limits for domestic medical cannabis production. Doctors in Germany can prescribe cannabis more easily, the medical cannabis supply chain has fewer hurdles and hoops, and domestic production is set to surge.

As a result, the German medical cannabis industry is projected to experience tremendous growth in the coming years. A February 2024 market analysis by Zuanic & Associates determined that if 1% of Germany’s population became cash-paying medical cannabis patients, the German medical market could reach €1.7Bn in value by the end of 2025. Germany’s medical cannabis industry is a major winner of German adult-use legalization.