Quo vadis cannabis? The year in review and outlook for the German cannabis industry

Beitrag teilen:

Im Original auf Deutsch erschienen by Krautinvest


2023 was a „rollercoaster ride“ for the cannabis industry. While in April everyone was still assuming that the federal government would present a commercial distribution model, as agreed in the coalition agreement, the two-pillar model presented by Karl Lauterbach and Cem Özdemir at the federal press conference in April was a bitter disappointment. This disappointment was then surpassed by the over-regulated and extremely prohibitive cabinet draft in August. Not even the intoxication clause for industrial hemp, which had long been proposed by leading toxicologists and demanded by the industry, was removed from the draft.

For the individual cannabis products already available on the market, the picture for the future of marketability is mixed:


Hemp seeds:

The European contaminant regulation for hemp seed products came into force in January 2023, largely on the initiative of the EIHA. This means that uniform THC values now apply throughout Europe for hemp seeds, hemp seed flour and hemp seed oil, so that the EFSA’s ARfD is no longer relevant. This was an important development for hemp seeds and their derivatives.


CBD oil:

Most recently, CBD oils were marketed as a cosmetic oral care oil, as cosmetic studies were able to prove their antibacterial effect in the care of the oral cavity. This marketing option was convincingly confirmed by the Hamburg Administrative Court, the Hamburg Higher Administrative Court and the Düsseldorf Administrative Court, as these products are not intended to be consumed as food by humans if they are correctly labeled as cosmetics. The administrative courts in Berlin and Sigmaringen, on the other hand, classify CBD oils as „lifestyle“ products and foodstuffs. All decisions have been made in summary proceedings, the decisions in the main proceedings are still pending. However, legally binding decisions may still be years away.

In 2022, the Cologne Administrative Court confirmed a decision by the BfArM, according to which an underdosed CBD oil, for which a daily intake of 18mg CBD was recommended, also has pharmacological effects and is therefore a medicinal product. This decision was confirmed in March 2023 by the Bavarian Administrative Court in summary proceedings at second instance. However, these decisions contradict the established case law of the European Court of Justice, which assumes a materiality threshold for the assumption of a pharmacological effect, which must be exceeded with the dosage.

Another problem for full-spectrum extracts will be the new definition of cannabis in the Consumer Cannabis Act (KCanG), should it come into force. According to this, preparations and extracts of industrial hemp will no longer be covered, but only CBD as an isolate. The problem already arises under the current legal situation, as it is sometimes argued that THC is applicable to preparations or plant components as an individual substance in Annex 1 BtMG, and that corresponding products are therefore narcotics. This is independent of any existing sectoral regulations, such as the ARfD guideline value.


Industrial hemp flowers:

Not a day goes by without an investigation being initiated against traders in industrial hemp flowers or a search of stores and storage facilities. The same applies to criminal trials and convictions.

Nevertheless, product availability remains high throughout Germany. The explanatory memorandum to the KCanG expressly states that the legal situation of the former Narcotic Act for industrial hemp is to be continued with reference to the case law of the Federal Court of Justice. Should the intoxication clause actually remain in the KCanG, it is to be feared that law enforcement will attempt to ban these products from the market for good as herbal smoking products on the basis of this decision by the lawmaker, even if enforcement may take several years, as is the case with CBD oils and Novel Food.

The better scientific and dogmatic arguments speak in favor of excluding „abuse for intoxication purposes“ in the case of hemp flowers, in particular with regard to a possible conflict of values with the new KCanG. Why would a user try to get high on industrial hemp if the possession of up to 25g of real cannabis will soon be legal? The assumption that consumers would try to get high with 15g of baked CBD flowers for €150 seems even more absurd.


Hemp leaf tea:                                                  

Hemp leaves for hemp leaf tea have a significantly lower THC content than hemp flowers, sometimes only up to 1/10 in comparison. Nevertheless, some criminal proceedings are being conducted against producers and dealers. In some cases, these products were confiscated during investigations, but then not brought to court. Due to these uncertainties, hemp leaf tea has almost completely disappeared from the German food retail trade, which was a further serious blow to the industrial hemp industry.

In addition, hemp leaf tea was classified as a novel food by some overzealous authorities. However, the EU Commission’s decision in April 2023, again on the initiative of the EIHA, to include industrial hemp leaves as an aqueous infusion in the positive list of the Novel Foods Catalog put an end to this discussion. However, the change only applies to aqueous extracts, i.e. tea. An alcoholic extract for a gin, for example, would not be included.

For both product categories (hemp leaves as a tea/food product and flowers as a herbal smoking product), two hemp companies‘ lawsuits against the Federal Republic of Germany are still pending before the Administrative Court of Braunschweig, seeking a declaration of marketability on the basis of the European free movement of goods. A date should be set this year.


Industrial hemp flowers and hemp leaves in food:

Cannabis leaves and flowers in food are regularly classified by the authorities as a novel food, as a 15-year history of consumption before 1997 cannot be proven. No wonder, since cannabis was effectively banned at that time. Countless examples from older history and evidence in the form of recipes from all over Europe are of no interest to the authorities; banning these products from the market seems to take priority. A serious health risk that could justify the extensive investigation under the Novel Food Regulation is also not apparent.


CBD cosmetics:

In the case of CBD cosmetics, regulatory authorities often refer to the fact that cannabis extracts are mentioned in Annex 1 of the Single Convention of 1961 and that the European Cosmetics Regulation refers directly to this Annex with regard to unauthorized substances. The inadmissibility of the use of isolates or extracts has not changed as a result of the ECJ’s decision in Kanavape. Furthermore, there is insufficient data available for CBD to produce the safety report required by the Cosmetics Regulation.

Nevertheless, no proceedings have been brought to date in which the sale of CBD cosmetics has been successfully prohibited.

Full-spectrum extracts will probably no longer be covered by the KCanG, but the use of CBD should only be possible as an isolate in the future, as already explained above.


CBD e-liquids:

CBD e-liquids were long considered to be marketable without restriction, not least due to the aforementioned ECJ decision in the Kanavape case, which concerned just such a product. Now a Berlin case has come to light, according to which CBD when used in a product name is supposed to suggest a health benefit, which is not permitted under the Tobacco Products Act. A fine was imposed on the managing director.

Legal certainty looks different! Whether these attempts to ban even nicotine-free CBD e-liquids from the market, despite the clear European legal situation, remains to be seen. In addition, the problem of full-spectrum extracts under the new KCanG also arises here.


Aromatic candle with CBD

Most recently, aromatherapy candles with 200mg CBD (for burning with a wick) were offered in German retail stores. The products are labeled as aromatherapy, which is probably an approach for a sales ban under the Medicines Act. However, the despair over the lack of market prospects is clearly evident in such a product.



The recently extremely popular, semi-synthetic cannabinoid HHC, which is marketed in e-liquids and sprayed onto industrial hemp flowers, was increasingly attacked by local supervisory authorities in the fall of 2023 on the basis of the Tobacco Products Act. Individual retailers of HHC E-Liquids were banned from selling the product, as an intoxicating effect could not be ruled out and the ingredient used was therefore not safe. The 59th Committee of Experts at the Federal Office for Drugs and Medical Devices (BfArM) has now decided to propose amendments to the annex to the NPSG, which would also affect HHC. Details are not yet known, but toxicological experts fear a ban on the entire group of substances. However, as the forthcoming KCanG provides for a general ban on the extraction of cannabis (except for CBD isolate), inclusion in the NPSG would have been unnecessary. Further developments remain to be seen.


Partial decriminalization and cultivation associations

Enough has already been said about the prohibitive nature of partial decriminalization and the over-regulated organization of cultivation associations. In my opinion, however, it is unclear whether an illegal origin is harmless, or whether the cannabis must come from home cultivation or cultivation associations. Although the explanatory memorandum to the law explains that the origin should be harmless, there will certainly be courts that will take the wording and system as an opportunity to demand proof of legality. On the one hand out of a practiced, repressive reflex with cannabis, but on the other hand also in order not to further „promote“ the illegal market. We will see.

If the unrealistic limit of 50 grams then effectively prevents home-growing and only a few growers‘ associations will be established due to the numerous bureaucratic requirements, the situation for consumers will have changed very little.

Although everyone has been talking about reducing bureaucracy since before the fall of 2023, the concept of cultivation associations is a pure bureaucracy monster. There seems to be no other way in Germany, especially when the law is subordinated exclusively to health protection.

Another stumbling block will be the legal regulation on quality assurance in the growers‘ associations. This has already been outlined in the KCanG. The Minister of Agriculture must draw up this regulation in agreement with the Minister of Health and with the approval of the Federal Council (Bundesrat). One can imagine what will happen if the Cannabis opposed Federal Council gains influence over this. It is possible that cultivation associations will then also have to cultivate according to pharmaceutical standards, which would probably be the final end of this legal procurement alternative.


Medical cannabis

To this end, the federal government has surprisingly decided to approve the cultivation of medicinal cannabis in Germany. In future, there will be no restrictions in terms of quantity, product type and number of permits. The only requirement is production in accordance with the known pharmaceutical standards (GACP, GMP, monographies etc.). The explanatory memorandum in the BMG’s formulation proposals anticipates that 100 businesses (!) will establish themselves in Germany.

Possible consequence: Germany imported around 25 tons in 2022, perhaps up to 30 tons in 2023. The three domestic growers alone could reach 45 tons in the final expansion phase. However, Article 21 of the Single Convention of 1961, which Germany adheres to almost slavishly, stipulates that only as much may be imported as cannot be produced domestically.

Does this mean that imports to Germany are no longer allowed if demand can be met by domestic production? Whoever wants to sell medicinal cannabis in Germany must then also grow it in Germany in the long term?  Will imports for re-exports remain possible?

And who are all 100 companies supposed to supply? Will they have to look for new export markets if the demand in Germany is covered? And will medical cannabis become the new recreational cannabis if cannabis is removed from the BtMG and prescriptions explode?

The liberalization of cultivation for medical cannabis was a demand made by the FDP during the 2021 parliamentary election campaign. Germany should become the world’s leading exporter of medical cannabis, according to a demand regularly made by Wieland Schinnenburg, member of the Bundestag, among others. It is not yet possible to estimate what the liberalization of cultivation will mean for the domestic and global market.

Investing in the construction of a plant in Germany, also in preparation for the model projects in Pillar 2, therefore appears to make perfect sense. Production for the pilot projects must also take place in Germany in accordance with the regulations of the Single Convention.

And can these growers then, after the evaluation phase has ended after 5 years, if the international and EU regulations appear to allow it at that time, switch to the sale of recreational cannabis in the best GMP quality?

Is this the federal government’s master plan?



Questions upon questions continue to be raised by the draft and the agreed amendment proposals. There remain numerous contradictions, conflicting values and the threat of numerous conflicts with the principle of the free movement of goods within the EU. A wave of legal action is therefore foreseeable.

In the worst case scenario, industrial hemp will not survive this reform, but the market for medicinal cannabis will experience a new renaissance.