German legal cannabis market to reach €4.2 billion by 2034

According to a market analysis conducted by The Niche Research, the German cannabis market is expected to reach an estimated €4.2 billion by 2034, with a compound annual growth rate (CAGR) of 17.21% between 2024 and 2034.

First steps toward legalization

The journey toward this booming market began with the implementation of the German law on Legalization of adult cannabis use on April 1.

This legislation has already sparked a considerable interest in growing plants at home. A survey conducted by Pronova BKK revealed that 51% of respondents said they were willing to grow cannabis at home, and that 40% of occasional users are considering doing the same. Similarly, a YouGov survey indicates that 71% of German adults have purchased cannabis seeds or clones, and that 111% plan to do so in the future. Legalization has led to a significant spike in sales for cannabis seed banks across Europe.

Before the legalization of adult use, Germany prided itself on having the largest medical cannabis market in Europe. The liberalization of the German regulatory framework began in 2017, overseen by the Federal Institute for Drugs and Medical Devices (BfArM), which legalized and regulated the prescription and production of medical cannabis.

The removal of cannabis from Germany’s list of controlled substances under the CanG Act has further strengthened the sector by eliminating previous production caps and simplifying the prescription process. This regulatory change not only streamlines the medical cannabis supply chain but also significantly increases domestic production capacity.

According to the report According to The Niche Research, «Germany imported a record 32,398 kg of medical cannabis products in 2023.» This increase in imports underscores the growing demand for medical cannabis, which is expected to affect up to 11% of the German population in the coming years.

Projections from Heinrich Heine University in Düsseldorf suggest that the industry could create 27,000 new jobs, with regions such as North Rhine-Westphalia preparing for the establishment of numerous cannabis social clubs.

Market Segments: From Hemp to THC

Growth in the German market is not limited to medical cannabis alone. The hemp less than 0.21% THC has become a versatile product. The popularity of oils and excerpts from CBD hemp derivatives, known for theirfor their health benefits, ... has grown thanks to consumer preference for natural and sustainable products.

In addition, the cannabis products containing THC are gaining ground in the medical and wellness sectors. THC, known for its psychoactive properties, is increasingly being prescribed for conditions such as chronic pain and multiple sclerosis symptoms. This segment is expected to experience strong growth, driven by advances in medical research and broader patient access.

Looking ahead, the’industry German cannabis faces both opportunities and challenges. As the medical sector continues to grow, discussions surrounding the recreational legalization, and the implementation of a second pillar of the law that would authorize the retail sale of cannabis, are gaining momentum. Proponents of recreational cannabis legalization argue that it could reduce black market activity, increase tax revenue, and create new economic opportunities. However, regulatory frameworks, public health considerations, and societal attitudes remain significant obstacles.

According to The Niche Research, «the German cannabis industry is currently estimated to be worth nearly 1.2 billion euros,» reflecting substantial growth potential within a global market, which is expected to exceed 60 billion euros by 2025.