Germany’s Emerging Cannabis Industry Poised for Growth

The demand for horticultural supplies and medicinal cannabis is surging as Germany moves forward with its partial legalization of cannabis.

Under the new law, adults in Germany can now carry up to 25 grams of dried cannabis and store up to 50 grams at home. Suppliers of cannabis seeds, gardening tools, fertilizers, and grow lights are already experiencing a boost from the policy change, according to Dirk Heitepriem from the German Cannabis Business Association (BvCW). Since April, adults have been permitted to cultivate up to three plants for personal use. For those who prefer not to grow their own, cannabis social clubs, which will be operational from July 1, offer a legal alternative. These nonprofit organizations will grow and distribute cannabis to members under specific regulations.

One of the companies benefiting from this development is Compo, a German supplier of horticultural products. Their new product line, tailored to cannabis cultivation, has outperformed expectations. The Münster-based firm, which employs around 1,000 people across Europe, has seen significant demand for specialized potting soils and fertilizers. A company representative noted they expect sales to continue rising next year.

Seed Sales on the Rise

However, the legal gray area surrounding cannabis seed sales in Germany has driven many consumers to international seed banks like Royal Queen Seeds, based in Barcelona. According to company president Shai Ramsahai, their business saw a massive spike with over 10,000 orders on the first day of Germany’s partial legalization. Though the initial surge has settled, they continue to handle around 3,000 to 4,000 daily orders, with online revenue tripling in April, reaching €6 million.

Another major seed bank, Zamnesia, based in the Netherlands, reported a similar uptick in German demand. According to general manager Nick Ave, their usual seasonal increase in seed sales spiked by 150% this year.

Medical Cannabis Sector to Expand

Beyond the personal cultivation market, the medical cannabis sector in Germany is set to experience significant growth. Analysts from Prohibition Partners suggest that the country’s medical cannabis industry has a strong potential, with a patient base of over 200,000 and steadily increasing sales, imports, and patient numbers.

Following the partial legalization, cannabis is no longer classified as a narcotic, making it easier for patients to access medical prescriptions. In addition, new licenses for domestic production and distribution are expected to boost competition and growth in the sector, according to experts Jakob Manthey, Jürgen Rehm, and Uwe Verthein.

DEMECAN, a pharmaceutical company near Dresden, currently holds the only domestic license for medical cannabis cultivation. With the recent regulatory changes, they plan to increase production from 600 kilograms to 2 tons annually, which the company believes will boost the regional and national economy.

Cautious Optimism

While the opportunities in both the recreational and medical markets are promising, Heitepriem of BvCW urges caution. He notes the enthusiasm surrounding the legalization but points out that over-optimistic revenue projections have been a common pitfall, particularly after the cannabis market boom and bust in Canada.

Despite the uncertainties, Heitepriem believes the German cannabis market has the potential for significant revenue growth, though he refrains from giving specific estimates due to the evolving nature of the industry.