Germany’s telemedicine-fuelled expansion has driven the value of its medical cannabis market up by hundreds of millions of euros in just less than two years.
In 2024, Prohibition Partners estimated the German market at approximately €435m, and, according to its latest calculations, it is now expected to exceed €670m.
This opportunity has attracted businesses from across the world, with the pace of new market entrants and the flood of new products showing no signs of slowing down.
As political efforts stem the tide of cannabis roll on, outside of Berlin, the industry is facing another, more immediate challenge: oversupply.
As cheap imports continue to climb, products are flooding pharmacy shelves, and prices are falling sharply, exposing the fragility of a market dominated by intermediaries with limited patient connection.
Stefan Fritsch, the founder and CEO of Grunhorn, one of Germany’s longest-running and largest cannabis groups, told Business of Cannabis: “Last summer, there was euphoria. By Q3–Q4, there was panic, not enough supply. Companies scrambled to bring more products in, which has now led to oversupply. Stocks are nearing expiration.
“More pharmacies are dispensing cannabis, but that growth is slowing. Anyone who wanted to enter the cannabis space probably did so last year. Meanwhile, new products keep coming.”
Surging Supply, Falling Prices
In the second quarter of 2025, imports rose by 15%, with the total quantity of medical cannabis flower imported into Germany through April, May, and June hitting 43.3 tonnes, up from 37.5 tonnes in Q1.
The rate of cannabis flooding into the country has been so overwhelming that the country’s registered import quota of 122 tonnes, reported to the International Narcotics Control Board (INCB), was exhausted by September.
As Business of Cannabis reported last week , this saw import licences suspended for a month, before BfArM moved to increase its quota by a further 70 tonnes.
The regulator confirmed to us in a statement that ‘the maximum quantity of cannabis released by the INCB for 2025 is 192t 484kg 23g.’
Industry players are now bearing the brunt of this increasing saturation, faced with little choice but to drop their prices.
“We see it clearly in pricing our data: most suppliers and pharmacies are dropping their prices,” Fritsch explained.
“The number of products on the market keeps rising, and that’s without even looking at the volume per product being imported. If you chart product numbers against prices, they move in opposite directions at almost the same rate. It’s the classic supply-and-demand curve.”
Not only is this placing significant pressure on margins, but tonnes of cannabis stock is now sat in storage, edging close to its inherently limited expiration date.
If supply continues to outpace demand, Fritsch suggests that the long anticipated consolidation of the market is ‘inevitable’.
“We’ve heard from multiple large manufacturers that July was a really rough month, they didn’t meet their sales goals. They also confirmed that August hasn’t been the saviour either,” he said.
“A lot of people are saying that if certain companies can’t get their stock moving and can’t sell at a certain price point, consolidation is inevitable. Either they’ll disappear entirely, or they’ll be bought out by someone else.”
The Middleman Problem
Exacerbating this market pressure is the growing presence of so-called ‘middlemen’, who have limited on-the-ground experience with these emerging dynamics.
Fritsch argues that these players, largely disconnected from the patients and businesses they’re supplying, are a significant threat to the health of the industry.
“In my opinion, one of the biggest problems is that many of the players in the market are simply middlemen. They’re not growers. They don’t have a direct connection to the patient. They can source from anywhere and bring product in, but that disconnect makes the problem worse… it leaves them out of touch with the actual market.”
This disconnect, and the sales targets these companies are largely driven by, are representative of a fundamental structural weakness within the current market.
“If someone’s been told, ‘Hit this multi-million-dollar sales target and we’ll pay you out,’ and they’ve got unlimited supply but no B2C relationship, it’s going to make for a volatile situation. I think the next few quarters will be wild, because a lot of different pressures are all converging at once.
“These middlemen are trying to pull as much cash out of the market as they can, but they’re going to get squeezed. We’ll see consolidation, and eventually the hype will fade. Some companies will stop coming in with big claims like, ‘We’re going to dominate the market because we’re launching next month.’ Once the dust settles, I think it’ll return to business as usual.”
Unlike many of these intermediaries, Grunhorn has built a diversified framework, combining patient care, physician networks, and pharmaceutical logistics under one roof, helping ensure that quality, compliance, and the long-term sustainability of its own business and the wider market.
“At Grunhorn, we’ve focused on building direct relationships with patients and doctors, which helps us stay connected to real market needs; that’s why our approach remains resilient even in times of oversupply.”
As with much of the global medical cannabis market, cheap, high-quality, EU-GMP Canadian imports dominate Germany’s market, with around half of all cannabis products now originating from Canada.
Although CanG paved the way for a domestic cultivation industry to emerge by removing key roadblocks, fundamentally, it is not economically viable at this point.
The pharmacy bottleneck
From just a handful of pharmacies selling cannabis in 2017 to hundreds today, growth is now levelling off as the market becomes saturated.
Although these pharmacies shoulder significant administrative and testing burdens, even with the relaxed laws, cannabis remains one of the ‘more effective revenue streams’.
Fritsch warned that the potential incoming ban on mail order distribution and the slowing rate of new pharmacies opening across Germany threaten to strangle growth.
“The issue is that cannabis isn’t a finished product. Pharmacies can’t just buy it and sell it. They have to buy it, inspect it, run lab tests, repackage it, complete a lot of paperwork, and only then can they ship it out.”
“Every online pharmacy must have a brick-and-mortar presence. In Germany, more pharmacies close each year than open, and that’s largely down to financial struggles.”
He continued that Grunhorn is already seeing ‘that we need more output from pharmacies’, but that the ‘rate of new pharmacies entering the space is already slowing.’
“Many pharmacies already run online businesses and still can’t survive. If you strip away cannabis sales, especially for the specialised cannabis pharmacies, they’ll disappear.”
Given these bottlenecks, Fritsch says he doesn’t see ‘where the market’s additional output is going to come from’.
“Given those bottlenecks, I don’t know where the market’s additional output is going to come from, especially as the rate of new pharmacies entering the space is already slowing.”
Those most exposed, importers without domestic roots, middlemen driven by sales targets, and pharmacies struggling under regulatory and operational strain, are now contending with the consequences of a market that has outgrown its infrastructure.
The coming year will test whether Germany’s cannabis industry can evolve beyond its current dependence on imported supply and intermediary-driven distribution, or whether consolidation will be the inevitable correction to a market that has expanded faster than it can sustain.
