Companies and scientific institutions could sell adult-use products under new legislation in Germany that allows these groups to seek licenses for cannabis pilot programs.
Industry observers said the pilot programs present opportunities for U.S., Canadian and other non-German companies.
Entities applying for a cannabis pilot program license must get approval from the German municipality where operations would take place, and the pilot program must have an experimental or scientific component, such as collecting data about marijuana use and outcomes.
The pilot programs would need to get final approval from the Federal Ministry of Food and Agriculture (BMEL).
Germany’s current rules governing medical cannabis mandate that such products be compounded at a pharmacy, which makes anything beyond marijuana flower and oils financially prohibitive, according to international cannabis consultant Deepak Anand, the principal at ASDA Consultancy Services in Surrey, British Columbia.
It’s not yet known what products will be sold through the pilot programs.
The Netherlands and Switzerland have set up similar programs.
German marijuana reforms
This is the second major cannabis reform that Germany has enacted in less than a year.
In April, Germany removed cannabis from its narcotics list, making it much easier for patients to receive a prescription for medical marijuana, which must be sold through licensed pharmacies.
Since then, there has been a surge in the number of medical marijuana patients in Germany, which has only a small number of licensed cultivators and imports substantial amounts of medical cannabis.
Germany’s federal government also passed legislation allowing for the creation of cannabis cultivation social clubs, which are not commercial.
Club members can grow cannabis for themselves and other members, but no marijuana is bought or sold.
Countries that are members of the European Union cannot establish commercial adult-use cannabis markets easily because they must follow European Union laws, which prohibit marijuana sales.
Germany established the social clubs to skirt the EU’s prohibition on adult-use sales.
German elections
Also unclear is how long the program – rolled out by the governing Social Democrat Party and its allies – will be around.
Germany holds federal elections in February, and the conservative Christian Democratic Union (CDU) is expected to win.
German cannabis industry observers are split over whether the CDU, if it wins in February, will roll back or eliminate recent marijuana reforms or leave them alone.
Anand believes that a CDU government will defer to EU and international law prohibiting cannabis sales, even if cover is provided by the medical and scientific components of the program.
“This enactment that just happened could be undone,” Anand said.
“I don’t think this new conservative government is going to want to stand up to the international community, the European community, and start to defend a position that they’re offside on, because they’ve been completely the opposite of this.
“I don’t see them doing that, and that’s why I think they’re probably going to roll this back.”
However, if a company gets its pilot program licenses approved ahead of cannabis reforms, those permits would be grandfathered in and couldn’t be canceled by any new government.
Niklas Kouparanis, CEO of Frankfurt-based medical cannabis holding company Bloomwell Group, said that although the alliance between the CDU and the Christian Social Union (CSU) in Bavaria is ahead in the polls, it will need a coalition with one of the traffic light coalitions – the Social Democratic Party, Free Democratic Party or Greens.
“All three parties have made it clear that they are not willing to revoke Germany’s CanG (medical cannabis) bill,” Kouparanis said.
“There may be modifications to the law that impact current regulations, which are already limited, but we expect the medical market to remain strong and forge ahead without disruptions.
“Even the conservatives are in favor of medical cannabis, and we expect the growth of the medical cannabis industry in Germany to continue – and likely accelerate – in the comping months.”
Kouparanis points to a recent Bloomwell survey that found the majority of cannabis consumers who purchase from the illicit market in Germany reported using the plant for at least one health reason.
“This shows that our burgeoning medical cannabis industry still has a great deal of untapped potential, and the current political turmoil won’t steer us off our path,” he said.
Foreign investments
Therefore, some German cannabis businesses already are applying for licenses, and some cannabis companies outside Germany are looking at pilot program possibilities.
One such company is High Tide, a licensed producer headquartered in Ontario, Canada.
“We at High Tide have closely monitored German legislative and regulatory developments since 2022,” said Omar Khan, chief communications officer at High Tide.
“We have been preparing to participate in these consumer research projects and have recruited prominent academics to develop a proposal focusing on consumer behavior.
“These research projects form just one pillar of a broader plan we have been working on to bring High Tide and our Canna Cabana brand to Germany, and we look forward to sharing further details soon.”
Anand noted that for a non-German business to get its foot in the country’s cannabis market, it would either have to partner with a German business or set up its own separate company in Germany.
For example, Curaleaf Holdings, headquartered in Massachusetts, and Tilray Brands, which has offices in Ontario, Canada, and New York, are among the North American marijuana companies with operations in Germany.
Omar Sacirbey can be reached at omar.sacirbey@mjbizdaily.com.
Margaret Jackson can be reached at margaret.jackson@mjbizdaily.com.
