German Medical Cannabis Market Expected to Exceed €420 Million in 2024

The German medical cannabis market is in a phase of dynamic development. In the face of newly introduced regulations and simplified access procedures, forecasts suggest that the market could be worth more than € 420 million in 2024, according to an upcoming report by Prohibition Partners.

Thanks to changes in the law and the influx of new market players, Germany is entering a so-called “second wave of German cannabis,” which opens up new opportunities for patients and businesses. In this article, we will discuss the key factors driving market growth, the challenges facing companies, and the impact of the German market on other European countries.

The Evolution of the German Medical Cannabis Market

In 2017, Germany introduced regulations to allow patients to access medical cannabis. Initial projections were ambitious, with estimates that the market could handle up to 800,000 patients. The reality turned out to be more complicated. High treatment costs and complicated bureaucratic procedures significantly limited product availability, preventing the market from developing on the scale predicted by analysts. Although demand for medical cannabis was high, regulatory barriers limited the number of patients and companies entering the market.

These barriers were mainly due to the high cost of treatment and the complex administrative procedures that burdened patients, doctors, and entities involved in the supply and production of cannabis. The costs and time required to obtain the appropriate permits were significantly higher than in other countries, which caused the market to grow more slowly than expected

The breakthrough came with the introduction of regulatory changes within MedCanG, which aimed to simplify access to medical cannabis. The new law reduced bureaucracy, lowered costs, and made it easier for doctors to prescribe drugs and for pharmacies to distribute them. Thanks to this, medical cannabis became more accessible to patients, and the market began to grow faster than before.

Forecasts for 2024: German medical cannabis market value to increase to 420 million euros

Since April 2024, when the new regulations were fully implemented, the medical cannabis market in Germany has been growing rapidly. Forecasts indicate that the German medical cannabis market value will reach or exceed 420 million euros this year. The simplification of procedures and the lifting of restrictions on the production and distribution of medical products has led to a greater number of prescriptions, which has directly translated into an increase in sales.

Many new players have entered the market – both German manufacturers and international investors who have noticed the market potential. Importers and distributors are now fighting for shares, which makes competition increasingly fierce. As a result, patients have a wider choice of products and more competitive prices, which contributes to the growth of the entire sector.

Thanks to new regulations, patients can now more easily access a wide range of medical cannabis products. Reduced production and distribution costs allow for lower prices, making treatment more affordable. In addition, greater competition between companies improves the quality of products, which translates into a better patient experience.

Challenges for Businesses in the German Medical Cannabis Market

Although the German medical cannabis market is booming, it is also highly competitive. There are currently more than 400 flower products and nearly 100 different extracts on the market. This diversity forces companies to differentiate themselves through quality, price and unique product features in order to gain patient attention and build customer loyalty.

The requirements for product quality in Germany are very strict – in order for products to be placed on the market, they must meet EU GMP (Good Manufacturing Practice) standards. For foreign companies, this is a serious entry barrier, because adapting to these requirements requires significant investment in infrastructure and production procedures.

German law severely restricts the ability to advertise medical cannabis products. Companies must therefore base their marketing strategies on other aspects, such as building relationships with doctors, educating patients and participating in industry events. As a result, an effective strategy requires not only close cooperation with customers, but also constant innovation and monitoring patient preferences.

Comparison with the Canadian Cannabis Market

The German medical cannabis market, unlike the Canadian market in 2018, is more realistic in its expectations. Canadian companies at the time were fighting for the largest possible production, counting on a huge increase in global demand, which ultimately did not materialize on such a scale. The German approach is more balanced – most new regulations are focused on the medical market, and recreational legalization is limited to a decentralized model (Pillar 1 and Pillar 2).

The government is focusing on developing the German medical cannabis market while also taking steps toward limited recreational legalization. Pillar 1 focuses on personal access and legal home cultivation, while Pillar 2 introduces pilot projects for larger-scale cultivation and distribution. This approach provides market stability and gradual change, which is intended to avoid the problems of overproduction and excessive competition that have occurred in Canada.

The impact of new regulations on product prices

New regulations that introduced simplified procedures for companies involved in the production and distribution of medical cannabis had a direct impact on reducing operating costs. By reducing bureaucratic barriers, companies can obtain production permits and introduce new products to the market faster and cheaper. This results in lower production costs, which translates into lower final prices for patients, making treatment more affordable.

Even though product prices are falling, the high level of competition in the market forces companies to maintain and improve the quality of their products. German law still requires compliance with strict EU GMP standards, which means that products must meet the highest quality standards. Market competition and the greater availability of alternatives force manufacturers to constantly innovate to meet patient expectations and stay ahead of other players in the market.

Development of Cannabis Cultivation Associations

Since July 2024, when the German Cannabis Cultivation Associations began submitting applications for permits, there has been a significant increase in interest. In the first two months, local authorities received more than 300 applications, of which 14 have already been approved. However, the pace of approval of applications varies by state – Lower Saxony, for example, issued 11 of these permits. The differences in approval of applications may be due to the political, social and cultural attitudes towards cannabis in the individual regions.

Although these associations are not intended to generate profits, there are business opportunities for companies that can provide services and products needed to grow crops. Companies that produce fertilizers, irrigation systems, or crop monitoring equipment can benefit from the development of associations. However, due to regulations that limit the number of suppliers on teh German medical cannabis market, one entity can only provide a certain number of services to one group, which limits potential profits but also stimulates the market for related services.

Prospects for Further Liberalization: Pillar 2

As part of the liberalization plan, the German cannabsi market is divided into two pillars. The first pillar concerns cultivation associations and the legalization of home cultivation, while the second pillar is to introduce pilot projects for larger-scale cultivation and the commercialization of recreational products. The government has given the Federal Office for Agriculture and Food (BLE) responsibility for overseeing these projects, allowing them to be introduced without the need for new regulations.

The Ministry of Agriculture has published a draft regulation that defines the role of the BLE as the body responsible for the pilot projects. However, there is a risk that if Pillar 2 is not fully implemented before the end of the current government term (by October 2025), the conservative parties (CDU/CSU, AfD) may try to stop or delay the process, which would be a serious setback for the development of the recreational market.

The impact of the German cannabis market on the rest of Europe

The German cannabis market, as the largest in Europe, is setting a trend for cannabis regulation and liberalization on the continent. The country, through its cooperation with the EU, is setting precedents that could facilitate the development of similar programs in other countries. Examples include the Netherlands, Switzerland, Malta and the Czech Republic, which are also working to develop their cannabis markets.

The German model is becoming an example of how to regulate and control the market while reducing the taboo associated with cannabis use. This allows other European countries that are hesitant to make changes to see that legalization and regulation are possible in accordance with international rules.

Germany, as a leader in Europe, is working with the EU to develop regulatory standards for the legalization and liberalization of cannabis. The introduction of the German model is an example for other countries of how to build a system that operates within the framework of international rules and regulations. Consulting the EU allows for harmonization of laws across Europe, which can reduce concerns about legal implications and international obligations.

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(Featured image by betexion via Pixabay)

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First published in FaktyKonopne. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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