What’s in Store for the European Cannabis Industry in 2024 – Part 1

2023 was a year in which Germany, the European Union’s most populous country which has (in various forms) promised to legalise adult-use cannabis, continued to take the air out of the room and dictate much of the discourse around European cannabis. 

The significant watering down of its goals, the coalition government’s repeated failures to deliver on time, and the progress of countries like Switzerland and the Czech Republic throughout 2023 mean that Germany no longer dominates the European cannabis zeitgeist as it did at the start of the year. 

However, as our host of industry experts explain, it is still set to play a vital role in European cannabis liberalisation over the course of the coming year. 

Kai-Friedrich Niermann, Founder, KFN Law Office

2023 was a rollercoaster ride of emotions for the German cannabis industry. In April 2023, the surprising change of course on cannabis legalisation came when Federal Ministers Özdemir and Lauterbach announced that there would be no commercial route in Germany.

Due to international and European obligations, only decriminalisation with home grow and collective home grow could take place, and the commercial route would first have to be researched with model projects.

In August, the German government then presented a draft that could hardly be stricter and more prohibitive.

And still, in December 2023, it is not even clear whether this completely over-regulated draft, designed with old and new penal provisions, will even be put to a final reading and vote in the Bundestag.

Possession of three live plants for personal cultivation will be possible next year, but paradoxically, people will only be allowed to store a maximum of 50g of dry cannabis per person in their household. It is also questionable whether and how many cultivation associations will even be established next year due to the bureaucratic overkill.

Over 20 extensive and complex paragraphs deal with cultivation clubs, and despite much wrangling, all parties involved have been unable to convince the Minister of Health of a Cannabis Social Club solution. Consumption in the clubs, just like edibles, will therefore not be possible for the time being.

The biggest surprise was certainly that the cultivation of medical cannabis was released in Germany in the latest version of the draft. In the future, assuming the CanG bill is passed next year, anyone in Germany will be able to apply for a cultivation licence.

There are no restrictions on the quantity to be produced, the number of cultivation facilities or the type of product. How this will affect the German market, the international markets and the import companies established here is not yet foreseeable.

If sufficient medicinal cannabis can be produced in Germany domestically, this should have a direct impact on the imports to be reported annually to the INCB in accordance with the rules of the Single Convention. Anyone who still wants to sell medicinal cannabis in Germany may also have to produce it in Germany

Having a production site in Germany therefore seems to be becoming much more attractive, especially with regard to the model projects that are still to come. It remains exciting!

Niklas Kouparanis, CEO and Co-Founder, Bloomwell Group

Nothing will stop Germany from decriminalising and reclassifying cannabis in 2024; Germany’s Cannabis Act will be passed at the beginning of the year by the Bundestag, and this includes the groundbreaking provision that cannabis will no longer be considered a narcotic in Germany, beginning April 1, 2024.

Patients numbers will grow significantly and rapidly due to the fact that medical cannabis can be prescribed as regular Rx medication; costs will decrease; and patients will be able to use eReceipts – easy to use online prescriptions.

The reclassification of cannabis in Germany as a non-narcotic will set the stage for more affordable and accessible medical cannabis for all patients. Our country of 83 million, which currently has between 200,000-300,000 medical patients, could eventually see its number of medical cannabis patients multiply into the millions.

Germany is on the verge of ending prohibition and ushering in a paradigm shift. The number of patients benefiting from treatment with medical cannabis, in particular, will increase rapidly in the coming year.

Germany will become the biggest medical cannabis market in the world next year, so investors should look to Germany, where there are opportunities to do business with experienced companies that are already engaged with patients and are utilising data on medical cannabis supply and demand.

Outside of Germany, medical cannabis continued its march across the European block, in the last few weeks alone seeing Ukraine vote to legalise access to medical cannabis, and France bring medical cannabis into its general healthcare system for the first time. 

In the UK, Europe’s second largest medical cannabis market, progress for its medical, CBD and hemp industries remains stilted by regulatory inconsistencies and over-bureaucracy. Many are looking to 2024 with optimism that the industry may finally be allowed to reach its full potential. 

Mike Morgan-Giles, CEO, Cannabis Industry Council

The UK cannabis industry still faces a largely incoherent regulatory and policy framework, which creates challenges within the prescription cannabis, consumer CBD, and industrial hemp sectors.

The Cannabis Industry Council does welcome the Government opening the door to the potential e-prescribing of CBPMs, which would cut bureaucracy and help patients. If GPs were also allowed to initiate medical cannabis prescriptions, this could be a game changer.

We will also continue to strive for the widespread adoption of industrial hemp as a sustainable agricultural crop and for decarbonising the built environment. Given the ongoing objective to reach net zero by 2050, it appears inconceivable that this can be achieved without a notable contribution from hemp.

The Cannabis Industry Council will also continue to press for change to improve the economic outlook for businesses and farmers. These include the rules restricting foreign cannabis investment, and the current ban on farmers extracting CBD under an Industrial Hemp Licence.

British Cannabis

As British Cannabis Group enters its ninth year in the UK cannabis market in 2024, it is evident that challenges and opportunities are intertwined in a landscape undergoing constant transformation.

Despite promising growth prospects, the CBD sector faces formidable hurdles that require immediate attention, including regulatory changes and economic factors.

The CBD market, once touted as a goldmine, is enduring a turbulent phase in 2023, with prospects for 2024 equally challenging. These challenges are primarily rooted in the broader economic landscape. Factors such as inflation, supply chain disruptions, and global economic uncertainties have contributed to a volatile market. Businesses must navigate these economic headwinds to stay afloat and thrive.

Regulatory ambiguity continues to cast a shadow over the CBD industry. The Food Standards Agency (FSA) and the Novel Foods legislation have raised questions about product compliance, particularly concerning the recent decision to recommend a maximum daily intake of 10mg of CBD. Industry players are grappling with compliance issues and require clear guidelines to ensure they meet retail requirements and maintain consumer trust.

A source of hope for CBD brands in 2024 lies in the upcoming success of British Cannabis application for an Article 4 non-novel determination, covering a traditionally extracted range of cannabis products, based on a cold-pressed cannabis method. The validation of this primary ingredient as a non-novel food will clear a path for new products and new brands, which has been held up by regulation.

In the cannabis industry, 2023 has been a year of trials and tribulations, with 2024 poised to bring its own set of challenges and opportunities. Collaborative efforts between industry stakeholders and regulatory bodies are essential to overcome these challenges, ensuring a prosperous future for both CBD and medical cannabis. Clear guidance, industry standards, and a renewed focus on patient support and education will be pivotal in navigating the complex terrain of the cannabis industry in the years to come.