Germany’s conservatives pledged to overturn the 2024 legalization of cannabis if they win power in February’s election. They just won. What will this mean for German cannabis?

With over six years of adult-use cannabis legalization in Canada and far more for medical, it’s sometimes easy to forget that the end of prohibition is still a hot-button political issue in many existing international markets.

A case in point is the recent regime change in Germany, where the right-wing Christian Democratic Union (CDU) won the German parliamentary elections. While on paper this might not necessarily mean anything immediately dire for the German market, the shift no doubt raised a few eyebrows in Canada considering the sheer quantity of cannabis products that are regularly shipped to the European nation.

In 2023, Germany imported a record 31,398 kg of medical cannabis products with approximately 50% of that originating from Canada, and the numbers have only increased from there. Further, several Canadian companies have expanded their presence in the German market including Organigram, Tilray, Aurora, Cronos Group, and various others.

Two steps forward, one step back

“[Germany] historically comes from a so-called traffic light coalition,” said Finn Haensel, CEO and Founder of Sanity Group. “That means left wing and Liberal parties formed a government together. This government fell apart in September or October last year. There were new elections this January, and what came out is that the Conservative Party won the election.”

Haensel added that the Conservatives said during their election campaign that they want to repeal the cannabis law. As dire as that sounds, he was quick to point out that Germany is required to have a coalition government, and will more than likely form one together with the Social Democrats. That was the group leading the old government, and they are one of the main driving forces behind legalization.

It should also be noted that the Conservative Party has not been clear about what it means by repeal. Does it mean the adult-use initiatives or the existing and robust medical system?

“If you read publicly what they are saying, they don’t differentiate, they just say cannabis,” said Haensel. “But we talked a lot with politicians over the last six months. We had very good exchanges with the conservative politicians, and when you talk to them they say they only want to take back adult-use and don’t want to touch medical.”

So if the conservatives want to take back adult-use initiatives and the democrats want the status quo with everything, including adult-use, Haensel believes that the compromise would be the medical cannabis laws remaining untouched and the adult-use getting some tweaks.

“[Social Democrats] will need to make compromises on the adult-use part. What I could imagine is home cultivation will not be allowed anymore,” he said. “I can also imagine that public consumption will not be allowed anymore because that’s something the Conservatives really don’t like.” He added that possession amounts will likely go down to something significantly lower.

Another important player in the German cannabis landscape is Constantin von der Groeben, Co-Founder and Managing Director of Demecan. He agrees with Haensel’s assessment of the current situation regarding compromises.

“It’s very unlikely we see a complete 180 on cannabis policy as long as the Social Democrats are part of the new government coalition,” said von der Groeben. “That said, there might be some concessions that will be made. Home cultivation allows three plants, maybe they reduce it to two plants or just one.”

He also felt that there might be a reduction of possession amounts from 25 grams on your person and 50 grams at home to something lower, and also the repeal of cannabis clubs, of which there are only currently a handful.

Von der Groeben went on to say that Demecan’s business is fully on the medical side, so they don’t expect any significant issues. In fact, if recreational cannabis becomes less accessible, he feels that there may be more business because medical cannabis is easily accessible in Germany, and people will substitute adult-use for the medical side of the market.

“For the time being our 2025 forecast outlook for Demecan is still very optimistic. It is a bit of a downside that the overall sentiment from the new government will be a little more against cannabis,” he said. “The former coalition of the [Social Democrats], the Greens, the Liberals, they were totally pro-cannabis. They would have gone further. But the incoming government will be fine with the status quo.”

Our home and native land

It’s safe to assume that when this news came out regarding this regime change in Germany to a more conservative representation, it caught the attention of many cannabis companies in Canada who rely on Germany as a regular customer. 

In the first half of 2024, Canadian medical cannabis exports nearly doubled compared to the same period in 2023, reaching 67,475 kg. This was largely driven by demand from European countries, particularly Germany.

Should we be worried about whether this will affect existing and future supply deals? Deepak Anand, Principal of ASDA Consultancy Services, doesn’t think so.

“It doesn’t impact any of the LPs,” he said. “Also the timelines are really important. This is something that was explained to me. [First] the government doesn’t get formed until, at the earliest, May. Then, even assuming they want to make changes to the medical program, they would need to start that process the second they get in. Given everything that is happening in Europe, that’s [unlikely].”

Haensel also agrees with that reassuring sentiment. “There is a whole list of topics that are very important for the government [including] migration, economic changes, and inner security. Yes, they want to take back the cannabis law, but it’s agenda point number fifteen out of fifteen points. It’s not a high priority.”

Regardless of this, Anand did point out that if your business is cannabis you are “basically in politics,” so companies need to keep a close eye on what happens anywhere and everywhere. However, regarding the current election involving one of Canada’s most significant international cannabis customers, it seems the message of the day for Canadian companies is ‘don’t panic’.