Germany recently revealed plans to legalize adult recreational cannabis use. The national cannabis market is forecasted to be worth billions, and investors, companies, and countries are rushing to invest in German cannabis businesses because of it. This includes the United States.
Eight out of ten Americans believe “cannabis companies are attractive investment opportunities,” according to a recent survey from Bloomwell Group, the European cannabis market leader, while 61 percent say they “would invest in European cannabis equities.”
What We Know
Germany’s newly founded government (the “traffic-light” coalition of the Social Democratic Party, the Free Democratic Party, and the Greens) stated that “the controlled sale of cannabis to adults for recreational reasons in licensed stores” will be legalized. Medical marijuana has already been legalized for use by severely ill patients and the possession of cannabis in small quantities goes largely unpunished.
While no date has been announced for the legalization of recreational cannabis in Germany, the prospect of it is predicted to be greatly beneficial for the European cannabis market. And a win for any country’s legal cannabis market is a win for the global cannabis industry in our eyes.
What The American General Public Has To Say
The impending legalization of cannabis in Germany has piqued the interest of American cannabis consumers, with 65 percent stating they “would travel to a city or nation to sample its legalized cannabis market,”. Understandable, in our opinion.
Forty-four percent indicated that they would mosey on over to Germany simply for cannabis tourism. Another thing that has American cannabis consumers excited about the upcoming legalization of recreational cannabis in Germany, is the prospect of devouring the iconic German snack pretzels as a top-tier munchie craving. Again, completely understandable.
How It Affects The Cannabis Market Financially
Another discovery of the Bloomwell survey was that cannabis users in the United States are aware of the enormous financial prospects that cannabis legalization has created in Germany.
Legal cannabis sales in Germany are predicted to reach $3 billion annually by 2026, according to the report of cannabis data analysis firm BDSA. Additionally, Niklas Kouparanis (the co-founder and CEO of Bloomwell Group) stated that Germany’s legal cannabis market has the potential to grow exponentially beyond that, provided there is enough supply to keep up with the considerable demand.
Kouparanis stated in an email that it is crucial for Germany to ensure that this happens (supply meeting demand) with the legalization of adult-use recreational cannabis. He followed this by pointing out that one of their largest difficulties in 2017 when medicinal marijuana was legalized was exactly that. When adult-use sales commence in Germany, economist Justus Haucap predicts a total demand of 400 tons per year, implying a market worth no less than $10 billion USD.
[Further Reading: Germany’s medical cannabis market struggles with supply and demand]
What This Means For The US Cannabis Industry
It’s likely that cannabis companies in Germany will need to import cannabis products to meet the high demand for recreational marijuana. This is already a popular technique being utilized by medical cannabis suppliers in the country.
However, US suppliers in the current form are shut out of virtually any opportunities in Germany. Aside from a few exceptions, the United States does not permit federal cannabis exports. This is not entirely a win for our cannabis industry unless there is equity of opportunity for everyone within the industry. Further cannabis policy reform in the United States legal cannabis industry is essential. We already advocate for de-restriction and federal policy change regarding cannabis at Beard Bros. This is just another branch of our fight.
Changing these regulations and limitations to enable legal international cannabis trade offers the United States great potential to benefit from Germany’s licensed cannabis adult-use market while establishing a positive reciprocal relationship. Germany would be able to secure a consistent supply of cannabis to meet demand, while the United States would be able to profit from increased global sales and provide more chances for international businesses. Policy reforms, such as the MORE Act, must be enacted as soon as possible because, without meaningful reform, American cannabis businesses will be left behind, cut out of the lucrative international cannabis trade.
In the Bloomwell survey, the vast predominance of respondents (87 percent to be exact) agreed that cannabis should be legalized worldwide. Over half of respondents (52 percent in this case) indicated they were “aware that Germany will most likely become the largest legal cannabis market within the next three years.”
Germany’s imminent adult-use legalization is the first big step toward European-wide cannabis legalization that will spread like a domino effect from nation to country. This presents a wealth of financial opportunities for cannabis companies and investors, however, for our legal cannabis market to benefit, we have to continue and increase our efforts to enact serious policy changes.
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