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With adult cannabis legalization approaching, Germany prepares to capitalize on global weed roaming

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By Niclas Kuparanis, CEO and Co-founder of Bloomwell Group

Tourism has become a lucrative and ever-growing asset for the licensed cannabis industries within the United States and Canada, as well as the Netherlands, despite the country’s lack of formal legalization of adult cannabis use. With Germany on the verge of legalizing adult cannabis use amid a lucrative medical-only market, companies, investors and travelers alike are poised to seize new opportunities for cannabis tourism on the horizon.

Since 2013, Amsterdam has welcomed residents and tourists to its cafes. These social cannabis consumption lounges have been declared “essential businesses” as part of the Dutch lockdowns during the COVID-19 pandemic.

In the United States, adult use markets have attracted cannabis experts in and out of the country. Forbes recently cited data from a 2022 Harris Poll survey that found that half of millennial respondents said access to legal cannabis is a factor in vacation planning. Additionally, 43% said they specifically chose a destination with a legal market for adult use. Colorado, which has legalized adult use since 2020, notes that dispensary visits are common among travelers to Centennial State. According to research from the Colorado Tourism Bureau, 16% of those who traveled to Colorado in the winter and 15% of those who traveled to the state in the summer visited a cannabis dispensary or retail store while they were there. Also, according to the report, visitors who participated in cannabis-related activities were more likely to stay in the state longer versus those who did not.

Germany is set to legalize adult cannabis use by 2024 and will be the largest recreational cannabis market in the world given the size of the country’s population. In June 2022, the German government held five hearings to discuss the framework for legalizing adult cannabis use. Representatives from the German government and more than 200 people from the medical, legal and business sectors as well as international experts participated in these important discussions.

Legalizing adult use in Germany will lead to “tourist demand”, especially from its nine neighboring countries. The criteria for what the legalization of adult use will entail has yet to be set, including whether visitors from other EU countries and other parts of the world will be able to purchase and use cannabis within the country. In addition, EU non-discrimination laws will make it difficult to prevent EU residents from buying cannabis even if they are not German citizens. However, if tourists can buy and use cannabis while visiting Germany, this will open up more opportunities for growth and expansion into the new market.

While the guidelines have yet to be announced, the overall demand for cannabis in Germany will inevitably increase. For example, even if tourists do not have permission to buy cannabis in Germany once they focus on adult cannabis use, economists must take into account that they will be able to purchase legal cannabis through local friends and acquaintances. Given this factor, the total market demand through tourism demand will increase at a constant rate of 10%, according to the famous economist Justus Haucap. This roughly corresponds to 10% of the tourism demand in Colorado (Source: Leeds School of Business and MPG Consulting, 2020).

According to the 2022 “European Cannabis Market Survey” conducted by Bloomwell Group, more than 66 percent of American cannabis users surveyed said they would “visit a cannabis dispensary or social consumption hall” in Germany. In addition, 44 percent said they would travel to Germany specifically for cannabis tourism. Fun fact, nearly 75 percent of survey respondents said pretzel, a Deutschland variety, is a “satisfying” food. There is a bonus for those who make the trip!

Other countries with adult markets have shown that the attractiveness of these industries to tourists also depends on the sales infrastructure. For example, here are some options that may be considered as part of the policies for the legalization of cannabis use in Germany in the future:

dispensaries

Cannabis dispensaries are the norm in adult use markets such as Colorado and California. These are local government regulated retail storefronts from which people can purchase cannabis flower and other types of cannabis products. Most of these dispensaries have starters – someone who can suggest recommendations to customers based on their needs and career desires – answer questions, handle products, and view the products being sold. Although consumers can purchase cannabis and cannabis products inside dispensaries, it has not been determined whether German law will allow personal consumption or smoking on the site.

Cafés / social consumption lounges

Amsterdam’s social consumption lounges known as “cafes” have gained international interest and popularity among travelers. In the Netherlands, although the production of cannabis is illegal, there is a “back door policy” that allows cafes to sell cannabis for personal consumption. Although selling cannabis is considered a criminal offense, the individual sale of small amounts of cannabis within these establishments is acceptable by local authorities.

While it has not been determined whether legalizing adult cannabis use in Germany would include general cannabis consumption policies, it is unlikely that these establishments will resemble Dutch coffee shops. Instead, they are likely to follow the model of social consumption lounges that are beginning to proliferate within the United States

Similar to a bar serving alcoholic beverages, social consumption lounges allow consumers at least 21 years of age to purchase and consume cannabis flowers, food and other products in a social gathering space. Social consumption lounges are gaining popularity in adult markets such as California and Alaska. A total of seven states have social consumption lounge policies in place, and New Jersey, New York, Pennsylvania and Illinois are moving ahead with plans to allow consumption lounges this year. Similar to dispensaries, these consumption parlors often have contributors who assist consumers through the buying process.

pharmacies

The current German medical marijuana market operates using pharmacies to distribute cannabis to patients. Through this process, pharmaceutical-quality medical cannabis is distributed to pharmacies on behalf of the German Cannabis Agency. By law, it is necessary to maintain a special relationship between the patient and the pharmacist who is the front line of patient care, ultimately allowing for the free flow of information, education, and individualized medical care.

With legalization of adult use likely to pay off in Germany sooner rather than later, the prospect of expanding cannabis and related product distribution, whether in the form of dispensaries, consumption parlors or pharmacies, has residents, business operators and investors mouth-watering and anxious. To take advantage of the potential of its expanding market. Business owners in the current medical-only market expect Germany to likely implement a dispensary model with educated or young salespeople, as well as potentially offering e-commerce as well. However, the government has not yet determined whether public and social consumption will be allowed.

With Germany at the heart of Europe, there is strong potential for tourism to grow and expand to an audience of travelers from the European Union and other international visitors. Making cannabis available to both local adult users and tourists alike is key to driving the profitability of the burgeoning market. For this reason, it is now time for German lawmakers to start outlining what legalization of cannabis use for adults would look like, taking into account the overall dowries to protect minors and product security, while also identifying how best to take advantage of the tourism aspects of a future market.

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