Berlin Germany

How Big Is Germany’s Legal Cannabis Market Potential?

Germany became the largest country to ever pass a national adult-use cannabis legalization measure. The CanG bill was first approved by members of the Bundestag in February and initial provisions of the measure took effect on April 1, 2024.

The legal age for recreational cannabis in Germany is 18 years old. Adults can now cultivate up to three plants in their private residence and possess up to 25 grams of cannabis away from their residence. Public use remains prohibited.

The first country to ever pass a national adult-use measure was Uruguay in 2013, followed by Canada in 2018. Malta became the first European nation to pass a national adult-use legalization measure in 2021, and Luxembourg passed a more restrictive legalization law in 2023.

In Uruguay, pharmacies are permitted to sell adult-use cannabis and consumers are allowed to join noncommercial cannabis clubs from which to source their products. Adult-use cannabis purchases are limited to residents only in Uruguay.

Canada has the most robust consumer options, and sales are permitted to non-residents unlike in Uruguay. Malta permits noncommercial cannabis clubs, and Luxembourg prohibits all sales of adult-use cannabis (home cultivation only).

Lawmakers in Germany tried to push for a national sales system that is more like what is in place in Canada, however, European Union agreements prohibit such commerce activity. German lawmakers were forced to concede some industry components of the initially proposed legalization model.

Yet, there is still a considerable amount of opportunity for entrepreneurs, investors, and industry service providers in Germany’s emerging legal adult-use industry. In July noncommercial cannabis clubs are expected to launch in Germany, and whereas in Malta the number of legal clubs is still in the single digits, clubs are expected to proliferate across many parts of Germany in the coming years.

Additionally, Germany will eventually launch regional adult-use cannabis commerce programs, similar to what is already in place in Switzerland and the Netherlands, but on a much larger scale. The pilot programs, which permit legal sales and purchases of adult-use cannabis products for research purposes, will combine with noncommercial cannabis clubs to serve as the foundation of Germany’s emerging legal cannabis industry for the foreseeable future.

It is very much worth noting that Germany is home to Europe’s largest medical cannabis industry. Legal medical cannabis sales started in Germany in 2017, and involve imported medical cannabis products as well as domestically cultivated and processed medical products. It is estimated that Germany has between 200,000 and 300,000 medical cannabis patients.

While there is no way to know exactly how large Germany’s adult-use cannabis consumer base will be, there are available statistics that can help provide a very educated guess. According to official statistics from 2021, an estimated 8.8% of adults in Germany reported that they had consumed cannabis at least once in the last 12 months.

Applying an 8.8% consumer rate to Germany’s adult population (about 70 million people) works out to roughly 6 million people. It’s quite likely that number is, in reality, a bit on the lower end being that many cannabis consumers have historically refrained from admitting to cannabis use on government surveys due to prohibition policies.

Certain sectors of Germany’s cannabis industry will hold more potential than others until European Union agreements are modernized and Germany is allowed to sell cannabis nationwide, including sales to tourists. Germany receives an estimated 28.46 million tourists a year and shares more borders with other countries than any other EU member nation.

Germany’s home cultivation sector and consumption gadgets and devices sector should experience a tremendous boost now that cannabis cultivation and consumption are legal for adults. Events in large German cities, such as in Berlin where the International Cannabis Business Conference is held every year, will likely also experience increased demand going forward.