In The Magazine
Is Germany the Next Global Cannabis Capital?
With the new government in Europe’s most influential country vowing to be the first on the continent to legalize, the new jewel of global cannabis just may be Germany.
No culture is a monolith, yet some cultural exports are unmistakably German. The blue-and-white roundel of Bavaria stamped on hoods of upscale cars signals precision engineering. A smiling blond barmaid carrying an impossible tower of beer steins to an outdoor table in late summertime is an efficient—and punctual—good time.
But now, after the newly installed German government vowed to legalize adult-use cannabis as part of its coalition contract, ambitious entrepreneurs are predicting for Europe’s richest and most populous country a future that features cannabis-loving tourists, drawn to a new global locus for “cannabis kultur.”
Will foreign tourists from The Netherlands and California leave their familiar coffee shops and legal dispensaries behind for a vacation in Frankfurt or Hamburg? It seems like a hopeful stretch. Traditional German values aren’t consistent with the counterculture underground. And a shift toward the new international locus shifting to central Europe would require a massive cultural reorientation. At present, all of the legal cannabis consumed in Germany could be handled by 15 averaged-sized US dispensaries. In other words, the “German cannabis industry” could hide in a Denver, Portland or Los Angeles neighborhood without anyone noticing. And visions of that future must somehow overcome a wall of cultural reluctance, as most Germans look down on cannabis culture as something dirty, disheveled and far removed from classic Teutonic values.
However, after the new, so-called “traffic light” ruling coalition took power in October 2021 and vowed to legalize adult-use cannabis as part of its coalition contract, ambitious entrepreneurs and enthusiastic boosters say with straight faces and detailed reports that they’re putting their bets on Germany. With 82 million people and the world’s fourth-largest economy, Germany is the most populous and richest country in Europe, with influence that sets the tone for the rest of the continent. That means Germany would be the wealthiest and most populous country in the world with federal legalization—and will be so until the US, China or Japan legalize cannabis nationwide.
So far, Chancellor Olaf Scholz’s government is moving slowly but steadily, and all according to plan. In May, Health Minister Karl Lauterbach confirmed that draft legislation could appear as soon as the fall, as soon as experts and lawmakers heard evidence and testimony at a series of hearings in June. On June 13, Bukhard Blienert, Scholz’s drug and addiction commissioner, kicked off what he called “the preparatory phase of legislation” with the first hearings at the Federal Ministry of Health.
Hearing topics included “which measures can be used to ensure the next protection for young people, health and consumers in the event of implementation,” according to a news release, but there was no sign that Scholz’s government was second-guessing itself.
“Like many others, I have worked for years toward us in Germany finally ending the criminalization of cannabis consumers and beginning a modern and health-oriented cannabis policy,” Blienert said in a statement.
So, perhaps there’s something to the claims that “the future language for cannabis will be German.”
“It’ll not only be lederhosen, pretzels and beer in the future,” says Niklas Kouparanis, CEO and co-founder of the Bloomwell Group, a Germany-based holding company that investment news outlet Benzinga called the “leading” cannabis company in the continent. “I think cannabis made in Germany would be something on the bucket list of a US cannabis consumer.”
Kouparanis circulated a survey demonstrating the enthusiasm and wishful thinking that accompany the opening of any new cannabis market—and, he hopes, forecasts a future in which Germany is the leader in research and product development, as well as cultural mindset. As per his survey, 66 percent of respondents—including Americans—said they’d visit a dispensary, social club or consumption lounge in Germany.
All the metrics are there for Germany to be a powerhouse of some kind in a global cannabis market. Though production will probably remain in sunnier southern Europe (Germany currently imports most of its cannabis from Portugal), all the ingredients are there for the country to seize a dominant position in general business: population, technological know-how and a business-friendly regulatory environment open to outside investors.
“Germany will be the leader of the European cannabis movement,” agreed Alex Rogers, the US-born co-founder and CEO of the International Cannabis Business Conference (ICBC), Europe’s largest B2B cannabis convocation—which, not for nothing, takes place in Berlin, and has grown “five-fold” every year.
In addition to the population more than double that of California and Canada—where, in the latter’s case, legalization triggered a stock-market rush—Germany has “a head-start with its medical program,” Rogers says. “It’s the place in Europe that’ll probably be the biggest weed market in Europe for all of those reasons.”
Companies already involved in cannabis include Demecan, a Berlin-based firm that’s one of the three licensed to produce medical cannabis in the country. Though there are still more questions than answers—with regulations still to come—Demecan is lobbying to ensure that quality standards are maintained while continuing with the prior mission: convincing Germans that cannabis is indeed legitimate and acceptable.
“The topic of cannabis in medicine is still fraught with prejudice,” said Franz Grossman, a company spokesman. “No research was conducted in this field for a long time and the study situation is consequently weak. This deficiency must now be made up for.”
But Germany “can and should be world quality leaders and set the standards,” he added. “Germany is a leading country when it comes to pharmaceutical production. Cannabis should absolutely be no different.”
There are some facts behind the familiar enormous numbers filling investor decks and lofty market-research projections. According to a study published by Justus Haucap, a professor of economics at the Dusseldorf Institute for Competition Economics, German demand for cannabis could balloon from 15 to 20 tons a year currently to 400. That’s enough weed to generate €5 billion for the government in combined tax revenue and law-enforcement cost savings.
Markets have already demonstrated some data to support the potential of German cannabis. Bloomwell, for example, has grown since its June 2020 founding to employ more than 200 people. And last year, around the time when the new ruling coalition announced the country would legalize, Bloomwell closed a seed round in which the company raised $10 million from major industry players. Among them was Boris Jordan, the chairman of Curaleaf, the publicly traded behemoth that’s one of the largest cannabis companies on the planet.
Other American companies might fulfill some of the export demand while also contributing to a burgeoning cannabis-fueled tourism sector—a global draw along with Oktoberfest and idyllic town squares nestled in valleys.
However, that would require Germany to open dispensaries that welcome foreign tourists, and for the legal framework that the country has yet to determine to allow consumption lounges. Germany would also need to refrain from limiting recreational cannabis to exorbitantly expensive grams produced by a tiny handful of major companies and sold exclusively in pharmacies, as is the case with medical cannabis in the country.
“Germany has always had a leading position, especially in Europe,” Kouparanis said. “If it’s done correctly, it could be the blueprint for the European Union, and I think also globally. It’ll be the biggest domestic cannabis market in the world—bigger than even California.”
That’s a big “if,” of course. Like everywhere else cannabis has been legalized—and with the enormous and thriving illicit markets in the US threatening to choke out the over-taxed and over-regulated legal markets in California, Oregon and other states serving as a warning— “how” cannabis will be legalized matters very much.
Exactly how Germany will implement legalization remains unclear. There are far more questions than there are answers: How many licenses nationwide? How many licenses in each town? Will cannabis be available in dispensaries? In pharmacies? Will there be home grow?
And there’s also some troubling precedent: the country’s medical-cannabis experiment.
Though the perils of over-regulation and over-taxation are on display throughout the legal cannabis world, strict corporate control was the watchword for medical marijuana in Germany. The government authorized only three companies to cultivate medical cannabis in 2019. Along with Demecan, the locally owned business, the other two were subsidiaries of Canadian giants Tilray and Aurora, which imported much of their biomass from Canadian greenhouses. For patients, until last summer, cannabis was available in certain pharmacies only for steep prices.
But that was all under the departed Angela Merkel government. Many experts believe the current government is apt to be more accommodating—and, based on early conversations with lawmakers who appeared interested and eager to capture opportunity rather than exert total control—there are early signs of hope.
Based on their interest as well as constitutional law, when a regulatory framework is finally decided, it’s more likely Germany will limit the number of licenses awarded per entity while allowing as many total entrants as the market will bear, several sources predicted.
That’s more than enough encouragement for Ali Jamalian. The 43-year-old is the founder and CEO of Sunset Connect, a certified equity business in San Francisco, where Jamalian—who grew up in the Dusseldorf area, close enough to reach Amsterdam by train—is also chair of the local government’s cannabis oversight committee. Jamalian flew home in February 2022 to chat up some local politicians and gauge interest—and, like Feike, to see if there was any hope that the bright future forecasted by boosters such as Kouparanis could actually become reality.
He went armed with presentations, as well as a threat: If local leaders in Dusseldorf weren’t interested in fostering a local cannabis industry, “I’ll take my Chinese investors and go to Cologne and do it there,” Jamalian vowed.
The message seemed to land. Cannabis is a rare opportunity, and legalization an inevitability. But in order to become a destination more attractive than a West Coast city, social-club mecca Barcelona or even increasingly open New York City, there will still be a cultural stigma for cannabis to overcome. Anti-cannabis sentiment is inextricably tied with rising anti-immigrant xenophobia in Germany and in many other European countries.
“It makes you lazy, it takes your ambition away; if you smoke weed, you’re just by default a total loser—there’s no question that narrative is pervasive in Germany,” says the ICBC’s Rogers. “This being said, look at how many people wanted legalization ten years ago versus now. We’re seeing a huge rise, and 90 percent of Germany is pro-medical marijuana, more so than in some American states.”
Jamalian agrees. “The stigma in Germany is a hundred thousand times what it is in the US,” he says. “You have no cultural relationship.”
But along with a legitimate festival culture and some counter-cultural capitals such as Berlin’s legendary club scene, what you do have is another cultural trope: rationality.
“You have moral acceptance, on a scientific level,” he says, meaning medical marijuana. A wellness approach and pharmaceutical advancements may be the key to unlocking the German cannabis market and overcoming any cultural reluctances.
Though Germans have a legendary body-freedom movement—nudism as we know it began in Germany—on drugs, the country “is very conservative,” says Lisa Katharina Haag, the CEO of MJ Universe.
Haag worked in the hospitality industry before registering a lobbying company and is now the only woman on the board of Stimme der Cannabiswirthschaft (the “Voice of the Cannabis Industry”), a leading trade association that currently boasts 60 members.
Germany also has a strong federalist system of government. Each of the 16 federal districts are granted significant regulatory power. Districts could choose to be “very restrictive,” she said, and might be swayed by inevitable pickets of anti-cannabis protesters, such as parents calling for controls to “save the children.” Districts could also follow the model of The Netherlands and restrict access to cannabis businesses only to German citizens, blowing up the tourism model so eagerly touted by Kouparanis and other backers. And in some rural conservative areas, particularly in the south, someone caught with as little as two grams of cannabis commits an offense newsworthy enough to land in the local paper.
So, is Germany going to be like California, Canada or something else entirely?
“We don’t know,” Haag says. “A lot of lobby work must happen still. But, in general, I think Germany is more open than you may consider.”
This story was originally published in the print edition of Cannabis Now.