How American Cannabis Cultivators Can Expand Into Germany
By Rachel Wright, Simon Menkes and Falk Altenhöfer reprinted with the permission of MJBizDaily.com
With Germany’s cannabis market speedily evolving and open to international players, U.S. cultivators now have an excellent opportunity to get into a market that is already lucrative and a springboard into the rest of the European Union.
Even though American marijuana growers can’t yet export directly to the EU, now is an ideal time to explore the German market and get ahead of the inevitable wave to come.
For any U.S. cultivators considering Germany, here are eight need-to-know facts:
1. Germany is Europe’s largest market
Germany’s marijuana market is the largest in Europe, valued at over 1 billion euros (roughly $1.03 billion) annually and projected to grow significantly after the country in 2024 legalized a limited adult-use cannabis market and expanded its medical marijuana program.
Moreover, Germany’s population of 83 million-plus includes a strong base of medical cannabis patients. This offers cultivators a dual opportunity to grow cannabis within a recreational association as well as supply the medical market.
2. Beware of a different sales landscape
Germany originally envisioned a recreational marketplace that included the sale of cannabis through stores. The EU pushed back, and stores currently are not permitted under EU law. Germany is testing such sales under a “research umbrella,” however, with a few projects already granted approval.
Germany allows cultivation in associations alongside the medical market. Each cultivation association is limited to 500 members, on-site consumption is prohibited, and membership is restricted to German residents.
3. Explore partnership opportunities
Germany’s cannabis market is ripe for collaboration, with local distributors, pharmacies and cultivation associations actively seeking strategic alliances with experienced international cultivators to meet growing demand. This means that American cannabis companies can provide not only the knowledge needed to create and market high-quality products but also their expertise in the latest cultivation techniques and branding.
Collaborating with German companies through investment and/or partnership can create synergies and accelerate market entry while building local credibility and ensuring government compliance.
4. Germany has removed the cultivation quota
A strict quota placed on German marijuana growers previously meant that Germany’s marijuana imports steadily increased, with Canadian, Danish and Portuguese dominating the market.
However, that quota has been removed, which likely will afford U.S. marijuana companies more of an opportunity within the country as local producers begin to ramp up and expand.
5. California companies should leverage their superior quality and cultural recognition
German consumers and regulators prioritize quality, safety and sustainability. This presents an especially robust opportunity for California-branded companies and products.
California’s reputation as a premium producer of marijuana products, driven by ideal growing conditions, advanced cultivation techniques and historic cannabis heritage, aligns well with German standards.
By leveraging California’s world-renowned cannabis culture, cultivators who forge relationships with German companies, or who choose to start their own local grow, will be able to command premium prices in Germany’s quality-conscious market.
6. Be prepared to comply with strict quality regulations
American cultivators are accustomed to navigating some of the most regulated marijuana markets in the world.
Those companies that have survived have been able to demonstrate resilience in a very difficult market.
This experience will also provide a competitive edge in Germany, where strict compliance with Good Manufacturing Practice (GMP) and other EU standards is mandatory.
Many companies outside the EU have already found ways to transition cannabis from Good Agricultural and Collection Practices (GACP), the American standard, to GMP through specialized post-harvest processes.
This pathway simplifies compliance and ensures that high-quality products meet German standards.
7. Germany can be the gateway to the EU
Germany is not only Europe’s largest marijuana market but also its most strategic starting point.
If cultivators can achieve profitability in Germany’s competitive market, they can replicate that success across Europe.
Germany’s strong economy and high consumer buying power make it the perfect testing ground for scaling operations continent-wide and the ideal location for a headquarters when other countries regulate cannabis in their markets.
8. Take the first-mover advantage
While Canadian and Portuguese producers have made significant inroads, the European market remains underdeveloped compared to North America.
U.S. cultivators who enter the European market now can establish a strong presence before it becomes more competitive.
Early movers can establish relationships between their brands and consumers before competitors, as well as shape consumer preferences and establish benchmarks for quality and sustainability that others will strive to meet.
In summary
Germany’s cannabis market represents a lucrative opportunity for American cultivators to expand their global footprint.
With high demand for quality products, favorable regulatory alignment and opportunities for partnership, U.S. cannabis companies are well-positioned to thrive in Germany.
By acting now and leveraging their expertise, cultivators can secure a first-mover advantage, diversify their revenue streams and establish a strong presence in Europe’s most promising cannabis market.
Rachel Wright is a certified public accountant and the founder and CEO of Los Angeles-based Verdant Strategies, an accounting, financial management and strategic consulting firm. She can be reached at rwright@verdantstrategies.com.
Simon Menkes is a CPA and Advisor at Verdant Strategies. He can be reached at smenkes@verdantstrategies.com.
Falk Altenhöfer is the founder of Cannabis-Startups.com, a Germany-based community that supports European cannabis businesses through events, funding and other support. He can be reached at falk@cannabis-startups.com.
Reprinted with the permission of MJBizDaily.com, read the original post here.
