Cannabis companies eye new potential in Germany

News that the German government has approved a plan to decriminalise cannabis for recreational use has cannabis companies pondering a potentially significant new European market.

Two different takes

• The size of the market is indicated by the fact that some 4.5 million Germans claim to have smoked marijuana at least once in 2022.
• Cannabis company Curaleaf, which recently reported a Q2 4% year-on-year increase in revenue, and described Germany as a “future growth catalyst”, believes that more people will come into the market, trying out the drug for the first time when it becomes legal. 
• But the government has indicated the primary intention of upcoming legislation – expected to take effect from the end of this year – is to tackle the illegal trade in the drug and to reduce drug-related crime.
• The health minister has also said a public awareness campaign will warn young people of the risks of using cannabis.

What’s happening 

• Initially, adults will be permitted to buy up to 50g of the plant a month from “cannabis clubs”. 
• Limited commercial sales will follow with five-year tests in selected regions.

Why cannabis legislation matters

Marketing opportunities will be limited as the government plans a ban on advertising or sponsoring cannabis, although agencies may pick up business from the government’s public awareness campaign. 

Longer term, observers expect that the medical cannabis market will benefit as consumers reappraise the product.

Sourced from Financial Times, Curaleaf, GV Wire