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Germany's budding cannabis industry set to flourish

Benjamin Restle
June 15, 2024

Demand for horticultural supplies and medicinal cannabis has been booming since Germany partially legalized the drug.

A man is seen puffing on a joint
In Germany, adults may now carry 25 grams of dried marijuana and store up to 50 grams of the drug at homeImage: Bihlmayerfotografie/IMAGO

Suppliers of cannabis seeds, gardening equipment, fertilizers and grow lamps will benefit from Germany's decision to legalize cannabis, Dirk Heitepriem of the German Cannabis Business Association (BvCW) told DW.

Germany partially legalized cannabis in April, relaxing rules to allow adults to cultivate up to three cannabis plants for personal use. Those unable or unwilling to grow plants but looking to legally source the drug can join cannabis social clubs as of July 1. These nonprofit cooperatives may cultivate and distribute cannabis to members under strict conditions.

Compo, a German horticultural supplier, is one of the companies already seeing business picking up after launching a brand-new product line aimed at cannabis cultivators. The Münster-based company, which employs some 1,000 people across Europe, has seen product sales — including special cannabis potting soil and fertilizers — far exceed expectations.

"We project that sales figures will increase even more in the coming year," said a Compo manager.

A bag of soil is seen close up
German company Compo was quick to tap into the cannabis market Image: Benjamin Restle/DW

Seed sales surge

Due to legal uncertainties surrounding the sale of cannabis seeds in Germany, however, many individuals are turning to foreign seed banks like Barcelona-based Royal Queen Seeds, a major market player. When Germany's partial legalization came into effect "we had 10,231 orders in one day," said Shai Ramsahai, president of Royal Queen Seeds.

He said high demand initially overwhelmed his company with thousands of orders but has now stabilized at about 3,000 to 4,000 orders per day. In April, Royal Queen Seeds' online business grew by "300% and total online revenue was €6 million," Ramsahai said.

Zamnesia, another big cannabis seed bank operating out of the Netherlands, has also seen a surge in German orders, the company's general manager, Nick Ave, told DW. "Every year, from about the middle of March until the beginning of June, seed sales go up because people want to start growing their plants. Normally we see an increase of about 30% in seed season, but this year was a 150% increase."

A man looks into an illuminated grow tent at Berlin's Mary Jane Cannabis trade fair
This year's Mary Jane Cannabis trade fair in Berlin saw scores of exhibitors showcasing grow tents and other equipmentImage: Benjamin Restle/DW

Medicinal cannabis may see stronger growth

While companies are cashing in on individuals growing cannabis for personal recreational use, the German medical cannabis industry may see even stronger growth. It offers plenty of potential, according to market analysts Prohibition Partners, with "an estimated patient base' of over 200,000" and "sales, patient numbers and imports increasing year-over-year." 

This year's partial legalization means cannabis is no longer classified as a narcotic, making it easier for patients to get a medical prescription. Domestic commercial medicinal cannabis production was also tightly regulated, with a capped production quota in place. This has now changed. "New licences will be issued for domestic production and distribution, thereby liberalizing the market, increasing competition, and possibly strengthening the industry," Jakob Manthey, Jürgen Rehm and Uwe Verthein wrote in The Lancet, a leading medical journal.

BvCW's Heitepriem said he expects "medical producers will benefit due to the increase in demand for medical cannabis as it's easier for patients to access the product."

DEMECAN spokesperson Franz Großmann is seen looking into the camera, a large company sign is visible beside him
DEMECAN is just one of three companies presently permitted to grow medical cannabis in GermanyImage: Benjamin Restle/DW

DEMECAN, a pharmaceutical company based near Dresden in the eastern state of Saxony, is currently the only German company licensed to cultivate medical cannabis in the country. With the production quota scrapped, it plans to ramp up production from an annual 600 kilograms (1,320 pounds) of cannabis to 2 tons, said company spokesperson Franz Grossmann.

He added that DEMECAN has welcomed the liberalization, saying it will allow the company to maximize its economic potential, benefiting Saxony and Germany as a whole.

Bud bonanza?

While Germany's legalization has created considerable excitement particularly with regard to the medical market, Heitepriem cautions against overoptimism.

A group of visitors are seen at the Mary Jane Cannabis trade fair in Berlin, racks of small cannabis plants are visible behind them
Public interest in cannabis is growing, with scores of visitors and hundreds of exhibitors at this year's Mary Jane Cannabis trade fair in BerlinImage: Benjamin Restle/DW

"We had rapid startup development over the last couple of years in the medical sector and are seeing an increased interest from US, Canadian and European companies in investing in Germany," said Heitepriem. Yet many companies had learned their lesson seeing Canada's cannabis bubble burst after the country legalized the drug in 2018, he added.

While he said revenue projections were "overexaggerated in every discussion we ever had on that topic," Heitepriem nevertheless thinks there is "huge potential of a couple of billion in revenue, but I wouldn't really give an estimate because there are so many uncertainties."

Edited by: Ben Knight