What is the current situation of the medicinal cannabis industry and the recreational cannabis industry in Germany, and what can we expect after the elections in February 2025?
Current State of the German Cannabis Industry and Outlook After the 2025 Elections
The German cannabis industry is undergoing significant transformation following the introduction of the Cannabis Act (CanG) in April 2024. This partial legislation brought substantial developments to both the medical and recreational cannabis sectors, setting the stage for ongoing growth and challenges.
Current State of the Medical Cannabis Industry
With the adoption of the CanG and the associated Medical Cannabis Act (MedCanG), the German medicinal cannabis market has experienced notable growth, driven by regulatory improvements and increased patient access.
The reclassification of cannabis as no longer a narcotic has enhanced its acceptance as a therapeutic option among healthcare professionals and patients, simplifying the prescription process and improving accessibility. Consequently, medical cannabis prescriptions in Germany have risen significantly.
Medical cannabis sales in 2024 were estimated at €450 million, with further expansion expected in 2025. Imports have grown rapidly, with approximately 40 tonnes imported last year. The removal of the tender process for domestic cultivation licenses has opened the market to competition, paving the way for increased local production and reduced reliance on imports.
Telemedicine has been a key driver of this growth, offering patients easier access to medical cannabis therapies. However, besides all the benefits for patients, this digital development has also drawn criticism due to concerns over overprescription and inadequate patient screening by some providers.
While demand for medicinal cannabis is growing, cost barriers remain a challenge, as only very few therapies are reimbursed by health insurance programs. In October 2024, the Federal Joint Committee (GBA) introduced a new reimbursement policy allowing doctors from specific medical fields or with specific qualifications to prescribe medical cannabis for reimbursement without prior insurance approval. While this is a step forward, reimbursement challenges persist.
Current State of the Recreational Cannabis Industry
The recreational cannabis market remains in its early stages, navigating regulatory complexities and political uncertainties.
The Consume Cannabis Act (KCanG) partially legalized adult-use cannabis, allowing private home cultivation within certain limits and community-based cultivation through non-commercial cannabis cultivation associations (cannabis clubs).
However, the rollout of cannabis clubs has faced significant challenges. Bureaucratic hurdles and inconsistent regulations across federal states have delayed licensing processes. As of now, 444 applications for cannabis club licenses have been submitted, with 83 licenses granted, 12 rejected, and 349 still under review. Despite these delays, the first licensed clubs have started distributing their harvests to members, signaling progress.
The government’s initial plan for Pillar 2 legislation, which was intended to provide for regionally restricted pilot projects with licensed shops for recreational cannabis, has not yet been implemented.
However, Section 2(4) of the KCanG allows for scientific research projects to test the controlled supply of recreational cannabis. These model projects aim to collect data on the societal and health impacts of regulated cannabis distribution and to form the base for a safe and responsible supply system. Cities like Berlin, Frankfurt, and Hannover have already announced plans for such projects in collaboration with universities and companies.
Outlook After the February 2025 Elections
Looking ahead to the upcoming elections in February 2025, it is clear that the political landscape will play a pivotal role in shaping the future of cannabis legalization in Germany.
Political parties hold widely differing positions, with the conservative CDU/CSU, currently leading in polls, opposing legalization and advocating for repealing the CanG.
Although such rhetoric has sparked concerns, a complete reversal of cannabis legalization is unlikely. In theory, laws can be repealed or amended through legislative processes involving the Bundestag and Bundesrat. However, existing licenses for cannabis clubs are protected under administrative law, and dismantling the infrastructure created by legalization would be politically and economically impractical.
Even if the CDU/CSU wins the elections, they will likely need to form a coalition with parties that supported the legalization efforts, making a complete rollback unlikely. Instead, I expect stricter regulations, particularly for the recreational sector, with Pillar 2 legislation likely not coming to fruition. The medical cannabis market, as an established and widely accepted sector, is expected to remain largely unaffected. However, I could imagine stricter controls, particularly for telemedicine platforms, to address concerns over patient screening and prescription practices.
If the newly elected government really puts changes to the current cannabis situation on their political agenda, I estimate a more balanced approach, ensuring the continuation of existing laws while tightening existing regulations and addressing areas of concern.
Conclusion
The German cannabis industry is at a turning point as it enters 2025. While the medical cannabis market has matured and continues to grow, the recreational sector faces challenges related to bureaucratic hurdles and regulatory complexities.
The February 2025 elections will undoubtedly shape the future trajectory of legalization efforts, but I remain optimistic that progress achieved so far will not be reversed.
With the groundwork laid by the CanG and ongoing regulatory refinements and scientific research, both the medical and recreational cannabis markets in Germany have the potential to thrive in the years ahead.
Larissa Mößmer
Rechtsanwältin / Senior Associate
larissa.moessmer@osborneclarke.com
