By Niklas Kouparanis, Bloomwell Group CEO and Co-Founder

In 2022, Germany made significant steps toward making adult-use cannabis legalization a reality. Last October, Germany’s Health Minister Karl Lauterbach released a cornerstone paper outlining plans for the legal sale and consumption of cannabis in the country. The paper stated that only cannabis cultivated in Germany may be sold for recreational purposes. Plans for imports from other countries within the EU and overseas have yet to be specified; however, this may be subject to change within the draft legislation for adult use.

Whether Germany relies solely on the domestic production of cannabis or will eventually allow imports from foreign countries, the need for leaders in cannabis seed genetics and production is vast and highly anticipated for the new market. Germany, which is poised to become the largest legal cannabis market in the world and the first in the EU to legalize recreational cannabis sales, will need an estimated minimum of 400 tons annually to satisfy consumer demand once adult-use sales are legalized. Due to the expected high demand for expertise to guide the direction of both indoor, glasshouse and outdoor (for extracts) cannabis cultivation within Germany, cannabis genetics is one of the specialties in this burgeoning industry that is ripe with opportunities.

Cultivation Challenges

Germany’s only outdoor growing season is summer, from May until September. These months are characterized as damp, warm, and humid, and occasionally some areas of the country experience occasional heat waves. Such conditions make growing cannabis difficult but not impossible. Currently, only three cannabis companies are allowed to cultivate or produce cannabis of various types in Germany, according to Schlun & Elseven Rechtsanwälte. Professionals in this area are needed to guide the cultivation of the non-native cannabis plant throughout Germany’s northern and southern regions, which vary in humidity and temperatures, according to Britannica.

However, it’s not just the seasonal limitations that restrict outdoor cultivation. Plants harvested outside are more likely to be contaminated by other plants, insects and animals, and currently, there is no standardized production established in Germany. To help ensure the safety and quality of products, indoor cultivation is needed to support supply demand. However, there are significant challenges to indoor cultivation, including costs. Indoor cultivation often yields higher production costs compared to legal outdoor or greenhouse cultivation. With a war still raging in Eastern Europe due to Russia’s invasion of Ukraine in 2022, energy prices have risen steeply following halts on supplies, according to KrautInvest. With one of the goals of legalization to keep costs of cannabis production competitive with the illicit market, Germany needs the best and brightest from established adult-use markets in the U.S. and Canada in cannabis cultivation to support many facets of large-scale production.

Limitations of Germany’s Medical-Only Market

Over the years, the global cannabis industry saw a boom in cannabis genetic research and strain variety offerings.

Genetics can determine its size, color, resistance to pests and mold, yield, flavor and overall cannabinoid and terpene profiles. These conditions vary based on the cannabis plant’s strain which is determined by its genotype (genetic code).

In 2014, experts cited over 700 strains of cannabis, and as of January 2023, there were over 6,000 strains listed on Leafly’s site. These strains differ by THC potency, flavor, aroma, terpene makeup, effects–from energetic to giggly to sleepy and more–and wellness benefits such as helping with anxiety, PTSD or pain.

In established adult-use markets in Canada and within some U.S. states, consumers can visit their local dispensary to choose between various types of cannabis flower and products such as vapes, concentrates, edibles, topicals, orals like oils, pills, tinctures, and transdermals–to name a few, that best fit their wellness needs and preferences. Brands that have found success and growth within these markets have met consumer demands for products that are specialized, high-quality, safe and effective.

However, such progress overseas is a stark contrast to the limited options offered within Germany’s medical-only market. Currently, Germany offers less than 300 flower strains and less than 100 cannabis extracts to medical marijuana patients, according to Cannabis Apotheke. In addition, German medical patients are only able to be prescribed cannabis in the form of dried flowers or “Fertigarzneimittel,” such as Sativex or Epidolex.

In addition, all medical cannabis products must be produced according to the EU good manufacturing practice (GMP) and good agricultural and collection practice (GACP). To be supplied to German patients, cannabis must be produced mostly indoors in order to create standardized and sterile products. The high costs of EU GMP production would be difficult for the adult-use market and unlikely to be able to compete with the lower prices of the illicit market. In addition, medical cannabis is not produced to consumer preference, as is the key to adult-use success in the U.S. and Canadian markets. It is yet to be determined if the EU GMPC standard would be included in the adult-use cannabis legislation draft.

With adult-use legalization looming, Germany must be proactive in its approach to the expansion of cannabis strains and products sooner rather than later.

Opportunities for Cannabis Genetics Professionals and Expertise

With demand for a safe, consistent and high-quality supply as well as a variety of products, the German market is ripe with opportunities for strategic partnerships. While German businesses are experienced in producing medical-grade flower, they must soon adapt to the new, larger market of producing cannabis consumer goods. What consumers prefer, rather than what patients need, will be a critical question that businesses will need to answer, and genetics companies with a presence in established legal adult-use markets can help be the guide.

Now is the time for established North American cannabis genetics companies to enter the next green wave by partnering with domestic cannabrands in Germany and throughout additional legal markets in the EU. Such partnerships are critical to help guide and establish a variety of cannabis strains and product offerings within the new market.