All You Need To Know About The German Marijuana Market: Changes, Size And Leading Players

Senior analyst Pablo Zuanic of Zuanic & Associates outlines the transformative potential of new legislation in Germany's medical cannabis sector, forecasting market growth from a 28,000 patient base in 2023 to a value of €1.7 billion by 2025.

Zuanic emphasizes the nuanced reality behind Germany's cannabis "legalization," a gradual, phased approach to full legalization.

The initial phase allows for the possession, home cultivation and social clubs, though retail sales remain off-limits, posing potential risks and benefits.

A speculative second phase could introduce sales in select areas. Now, a question for investors arises: what drives this anticipated surge in Germany's medical marijuana market and how will the number of cash-paying medical marijuana users change?

Key Beneficiaries In the Surge

Zuanic's projections hinge on the assumption that 1% of Germany's roughly 85 million people will become medical marijuana cash payers, a stark increase from the current 0.03%.

He points to easier access and lower prices, facilitated by online clinics and pharmacies, alongside the new regulatory landscape, as key drivers of this growth.

"Medical cannabis was already federally legal in Germany, facilitating NASDAQ's listing of Canadian LPs due to their activities in Germany. Recent legislative changes have made it easier for doctors to prescribe cannabis, as MMJ has been removed from the narcotics list, streamlining the prescription process," Zuanic wrote.

He identifies Canadian cannabis giants Aurora ACB and Tilray TLRY as well-positioned to benefit from the expected boom, given their strong export ties to Germany.

Aurora is recognized for leading the cash market, while Tilray is noted for its dominance in the reimbursed sector.

Curaleaf International Holdings Limited, partially owned by Curaleaf CURLF, with its German subsidiary Four20 Pharma, is poised to leverage its connections, sourcing from Canadian producers and beyond.

“Among US MSOs, a Curaleaf affiliate, Curaleaf International Holdings Limited (68.5% owned by CURLF; the owners of the other 31.5% have not been disclosed) owns a German importer (Four20 Pharma), sourcing from Canadian producers and other countries,” Zuanic wrote.

He highlighted several other entities, including the private sector's largest online pharmacy Grunhorn, Little Green Pharma with its supply from Denmark, and the domestic medical marijuana producer Demecan.

Cannabis Social Clubs In Germany

"Adults will be able to join 'cannabis social clubs' (of up to 500 members) where members will organize and grow cannabis for personal consumption, distinct from home growth, with a withdrawal limit of up to 50 grams per month (30 grams for those 18-21 years old). Membership fees will cover club costs, and individuals can only join one club," Zuanic noted.

"We believe the clubs may impact the illicit market more significantly than affecting the existing medical marijuana market, as the law does not permit existing cannabis producers to support or partner with these clubs."

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