How Germany’s Medical Cannabis Market Expansion Can Fuel Industry and Investment Opportunities
It’s important for both established stakeholders and hopeful prospects to recognize which factors will serve as the catalysts for market growth and development.
THE LANDMARK GERMAN Medical Cannabis Act (CanG) officially went into effect on April 1, 2024, legalizing cannabis possession and home cultivation. The law lays the groundwork for the allowance of non-commercial cannabis clubs to cultivate and provide cannabis to members, which is set to roll out in July 2024.
Beyond possession, home cultivation and non-commercial cannabis clubs, one of the most highly anticipated actions adopted under CanG is the reclassification of medical cannabis as a non-narcotic. Such actions allow for greater patient access, ease administrative burdens and bolster the import industry to Germany.
With a new era of medical cannabis here at last, it’s important for both established stakeholders and hopeful prospects to recognize which factors will serve as the catalysts for market growth and development and the factors that can pose limitations.
Reclassification of Cannabis
Under reclassification, medical cannabis can be prescribed in the same manner as other prescription medications. No longer are there stringent requirements that patients must have a chronic condition and can only be prescribed medical cannabis as a last resort “narcotic” treatment.
With these regulatory barriers removed, it will significantly ease the administrative burden of medical cannabis therapy for prescribing physicians and offer access to more patients who can potentially benefit from it. Prior to this legislative update, prescribing physicians were often subjected to time-demanding bureaucratic processes and regulations to provide their patients with the necessary treatment.
Comparisons to Other Legal Markets
Today’s legalized medical markets in U.S. states like Florida and Pennsylvania can serve as guides to medical cannabis expansion in Germany under CanG. In 2014, Florida legalized low-dose medical cannabis for patients with cancer and epilepsy. Two years later, the state expanded access to medical cannabis to patients with terminal conditions under the Right to Try Act and included patients with conditions such as HIV, PTSD, ALS, multiple sclerosis and Crohn’s and Parkinson’s disease.
As cited by Zuanic & Associates’s 2024 cannabis sector equity report, in the U.S., following the expanded access, Florida now has more than 3.5% of the population enrolled in the medical cannabis program. Germany goes one step further as many more patient conditions can be prescribed medical cannabis as a treatment by physicians.
In 2016, Pennsylvania Governor Tom Wolf signed the compassionate medical cannabis legislation. Two years later, the first medical dispensary in Pennsylvania opened to allow patients to purchase cannabis as a prescribed medical treatment from their physician. According to the Marijuana Policy Project (MPP), initially, the only types of medical cannabis allowed were pills, oils, gels, creams, ointments, tinctures, liquid and non-whole plant forms for administration through vaporization. In May 2018, in keeping with the advisory board recommendations, the health department issued revised regulations to allow whole-plant flower cannabis.
In 2021, Pennsylvania made several improvements to its medical cannabis program. The state expanded the list of conditions patients need to have to qualify for medical cannabis and allowed them to purchase three times as much cannabis as they previously could. The law removed language that steered chronic pain patients to try more dangerous painkillers first. With its expanded access under legislative actions, 4% of Pennsylvania’s population is now enrolled in the medical cannabis program, according to Zuanic’s report.
With reclassification in Germany, industry experts anticipate that the “self-payer” segment of the medical cannabis market will grow significantly in the upcoming weeks and months. When comparing the potential growth of Germany’s medical market, if the country sees 1%-2% of the country’s population become medical cannabis patients, the industry growth can fluctuate from an estimated €1.5Bn to €3Bn, with 850,000 to 1.7 million patients, according to Zuanic.
Since April 1, patients can benefit from an entirely digitized patient journey. In many cases, even the first session with the doctor can take place online. A physical prescription is not necessary anymore. The doctor can easily prescribe e-receipts with a few clicks, which are efficient for pharmacies and can be accepted online.
Within less than two months since reclassification, patient numbers have already been growing multiple times, and compared to statistics from Florida and California — former medical markets before adult-use legalization — Germany has a potential of around 5 million cannabis patients.
Continued Reliance on Import Partners
Currently, Germany relies on several countries, including its biggest supplier, Canada, as well as Portugal, the Netherlands, Denmark, Australia and Colombia, to supply its medical cannabis market. According to 2023 data cited on KrautInvest from Germany’s Federal Institute for Drugs and Medical Devices (BfArM), the country imported 24,881 kilograms (27.4 tons) of cannabis for medical or scientific purposes. Before April 1, Germany’s domestic production had been limited to 2.6 tonnes.
Under CanG, domestic production limitations have been removed, as well as the tendering and redistribution process to the national Cannabis Agency, which has been responsible for distribution. However, despite these changes to fuel domestic cultivation, most of Germany’s medical cannabis supply will still need to come from its import partners to meet the expected increase in demand that results from reclassification.
Opportunities In Germany’s New Cannabis Era
With the passage of CanG and the expansion of Germany’s medical cannabis market under reclassification, there are now more opportunities for investment and employment within the field. As the German cannabis market becomes more lucrative, both domestic and foreign investors may wish to enter the market to leverage opportunities within domestic cultivation, telemedicine and import spaces — to name a few. In addition, these changes would open up job opportunities within Germany in fields such as cannabis genetics, product development, and manufacturing.
The passage of CanG in Germany represents a significant and long-overdue step in the expansion of patient access, education and acceptance of cannabis as a treatment. Not only does this legislation spur a new cannabis era in Germany, but it also serves as a model for Europe and other global markets.
