For lawmakers and potential cannabis industry regulators, knowing what current cannabis consumption rates are in a given country is important for various reasons. First and foremost, knowing current cannabis consumption rates provides insight into what a potential domestic market size could be. Germany is trending towards adult-use cannabis legalization, and one of the main estimates that needs to be pinned down is the potential size of Germany’s adult-use cannabis market. After all, how else can determinations be made for such things as the initial regulatory jobs and entity licenses needed? Newly released data from Germany’s Epidemiological Addiction Survey gives lawmakers, regulators, and cannabis observers something to work with.
According to the survey data, nearly ten percent (9.6%) of Germany’s population used at least one illegal substance in 2021, the most recent year for which data is available. The most popular substance according to the survey results was cannabis, with roughly 8.8% of Germany’s population reportedly having consumed cannabis at least once during the one-year timeframe. Men (10.7%) were more likely to report having consumed cannabis compared to women (6.8%). Of the population that reported having consumed cannabis, young adults (18-24 years old) were the largest group (22.8% of consumers), followed by 25-39 year olds (12.3% of consumers), and 40-59 year olds (4.6% of consumers).
A Domestic Supply For A Continental Demand
It is worth noting that just because some survey participants reported having consumed cannabis in the last year in Germany doesn’t mean that they are all frequent consumers and/or that they would automatically make all future adult-use cannabis purchases from regulated sources. One has to assume that a subset of the professed cannabis consumer group involved in the survey tried cannabis but did not purchase it themselves, and that another subset would continue to make purchases via unregulated sources if/when Germany launches a regulated adult-use industry.
With all of that being said, the domestic market in Germany will still be enormous given the size of the nation’s population, assuming that a relevant number of current unregulated adult-use cannabis purchasers migrate to the regulated market. If it were an apples-to-apples comparison people could look to Canada, compare their consumptions rates and survey data pertaining to legal cannabis purchases versus unregulated ones, and be well-suited to make a very educated guess as to what the size of Germany’s legal market could be.
However, it’s not an apples-to-apples comparison, but rather, an apples-to-bratwurst comparison due to Germany’s level of tourism and its geographical location on the European continent. Germany shares more borders than any other country in Europe, and it’s a safe bet that adults from surrounding nations will cross the border to partake in the new found freedoms once Germany’s regulated industry launches. How many is tough to say, although it’s guaranteed to be a significant amount of people.
Unfortunately for many of those cannabis tourists, the supply in Germany may not be able to meet the demand, at least not at first. Germany’s current legalization pursuits involve a model that is built entirely on domestic production due to various treaty provisions. I don’t know how much cannabis the European continent can consume, but with Germany likely to serve as a legal continental adult-use cannabis market oasis for some duration of time I have to assume that it will be off the charts.
Will Regulations Be Affected?
It will be interesting to see how both regulators and cannabis industry members navigate the adult-use domestic supply provision of Germany’s reported legalization model. Will regulators put stringent purchasing limits in place to help balance demand with supply? Even if they did, would it be effective? Will we witness a boom in the number of domestic cultivation licenses issued in Germany to boost supply? If so, will the licenses be limited to a handful of companies or be issued to a wide array of companies? These are just some of the lingering questions swirling out there.
Meanwhile, when legalization does arrive in Germany, it will reportedly allow adult households to cultivate up to 3 cannabis plants (per the current plan), which will affect domestic demand to some degree. How many people will choose to cultivate their own cannabis, and equally importantly, how many of them will actually succeed in doing so, is anyone’s guess. Whatever amount it ends up working out to, it will help on the domestic front.
Some people may falsely assume that Germany’s government could care less about supply shortages, however, the premise being pitched by Germany’s Health Minister to the European Union is largely that Germany’s legalization goal is to improve public health via the consumption of regulated products. That public health outcome will only become a reality if/when prices for regulated products are competitive with the unregulated market. Supply shortages would obviously guarantee that the unregulated market would continue to thrive in Germany, and that is the exact opposite of what lawmakers and regulators want.