How Germany Is Changing the Economics of Cannabis Expansion

Burn After Reading The 30-second intel for operators and investors ⏱ 0:30

Canadian cannabis exports to Germany rose 77.3% by weight in January–September 2026, while their average declared value fell 17.8%, from C$3.26 to C$2.68 per gram, as Canadian production and inventories also grew.

• Operators: Germany is a growing outlet for existing cultivation, but export prices are falling. Carrying costs, shipping, certifications and EU-GMP supply, which Organigram says remains tight, shape margins as much as volume does.
• Investors: Organigram's C$561 million Aurora deal and Curaleaf's competing offer bet on German access. Falling export values and a possible private-prescription crackdown make the returns on that access harder to extrapolate from sales alone.
• Do now: Rework your German margin model using lower per-gram prices, inventory carrying costs and certification and shipping expenses, then test it against the proposed mail-order and physician-contact restrictions.

Short on time? You’re done. Want the numbers?Keep reading ↓

Germany’s medical cannabis expansion is helping reorganize the business well beyond its borders. Take two apparently contrasting facts: imports nearly tripled in 2025, while flower in a major private-prescription network now sells for less than €4 a gram on average. More cannabis is finding buyers, demand is through the roof… and yet prices keep falling.

My way of addressing this paradox is to look past Germany. Looking at Germany alone leaves an important part of that development out of the picture, because much of the production supplying this expansion was established elsewhere, under quite different expectations about where it would eventually be sold.

Original IgniteIt calculations from Statistics Canada’s trade files show how far upstream the change now reaches. Canadian cannabis exports to Germany increased 77.3% by weight in January–September 2026 from the same months a year earlier. Their average declared value fell 17.8%, from C$3.26 to C$2.68 per gram, before the product reached a German pharmacy.

My initial suspicion was that accumulated Canadian stock was finally finding somewhere to go. The records support part of that argument, although they complicate the idea of a stockpile simply draining away: Canadian production rose 51.7% in 2025, and year-end unpackaged inventories grew another 58.9% (!). So, indeed, Germany was buying much more from an industry that was also producing and accumulating much more. Existing cultivation, available inventories, and the limited number of legal export destinations all belong in the explanation. The age of the batches actually shipped remains unknown.

This mixed economic picture has consequences for the companies buying their way into Europe. And there’s been plenty of heat around how to arrive better armed on the Old Continent. On November 3, Organigram Global (NASDAQ: OGI; TSX: OGI) announced a board-backed agreement to acquire Aurora Cannabis (NASDAQ: ACB; TSX: ACB), valuing its equity at approximately C$561 million. Curaleaf Holdings (TSX: CURA; OTCQX: CURLF), which has pursued Aurora since August, said its competing offer remained outstanding.

Although both bidders already own German distribution, buying Aurora would give either of them more qualified production and an established medical business to feed into that network, with more of the margin between cultivation and the patient remaining inside the combined company.

Germany’s Medical Cannabis Boom Meets Canada’s Oversupply

Germany made that route easier to use when its April 2024 reform removed medical cannabis from narcotics controls. Physicians and pharmacies retained their roles, but the special narcotics prescription was no longer required.

So there’s much more road ahead, as the country still has no nationwide commercial adult-use retail system. Still, the medical opening was considerable enough.

Imports reached 205.1 tonnes in 2025 in BfArM’s revised quarterly series.

Bloomwell’s third-quarter 2026 report put the average flower price in its network at €3.77 per gram, alongside approximately 50% more dispensed volume than in the previous quarter (those figures concern self-paying patients at participating pharmacies).

They give us a view of a growing, increasingly competitive channel, rather than a national average covering every prescription.

Now put Canada beside it.

Adding the monthly figures in Health Canada’s original dataset gives 3,405 tonnes of unpackaged dried-cannabis production in 2025, up from 2,245 tonnes in 2024. Unpackaged inventories rose from 1,081 tonnes to 1,717 tonnes over the same year.

They were still at 1,657 tonnes in June 2026. But the potential capacity is a different question: an official assessment put it above 5,000 tonnes annually in December 2022, when actual production was approximately 2,000 tonnes.

So those historical figures help us establish that substantial cultivation capacity was already there before Germany changed its rules.

Source: IgniteIt calculations from Health Canada’s monthly reporting, downloaded November 6, 2026. Production is an annual flow; inventories are December balances. Both cover unpackaged dried material, including trim and milled cannabis.

Germany recorded 93 tonnes of medical and medical-scientific flower arriving from Canada in 2025, way up from 33.2 tonnes in 2024. That supplied 46.3% of the 201.1-tonne total in BfArM’s less recently revised country series. Those 93 tonnes were equivalent to only 2.7% of Canada’s broad dried-cannabis production. The categories differ, so this measures relative scale, not the share of pharmaceutical export capacity Germany used. Even so, a relatively small destination besides Canada’s production base was obtaining almost half of its imported medical flower from Canadian suppliers.

This is where Javier Hasse’s recent piece on Europe’s limited market size helps explain the overall picture. He reported investor Aaron Edelheit’s estimate that Europe’s entire legal cannabis market was smaller than Missouri’s, suggesting that its appeal lies more in future regulatory changes and profit potential than in its current size. But Germany’s importance to Canadian producers tells a different story. Even a relatively small market can provide a valuable outlet for existing production, particularly when legal export destinations are limited and Canadian inventories have exceeded one million kilograms at every year-end from 2020 through 2025.

The Canadian customs records now let us examine the value of those shipments.

Canadian Cannabis Exports Rise While Prices Fall

They show 72,259 kilograms sent to Germany for C$235.6 million in January–September 2025, against 128,136 kilograms for C$343.5 million in the same months of 2026.

Dividing each period’s value by its weight produces the C$3.26-to-C$2.68 decline. Converting each month at Bank of Canada exchange rates gives a 19.8% fall in euros, from approximately €2.08 to €1.67 per gram.

Currency movements do not explain away the decline. Changes in what was shipped may explain some of it.

Source: IgniteIt calculations from Statistics Canada’s monthly customs files, HS 12119010, and Bank of Canada monthly exchange rates. The customs category is broader than BfArM’s dried medical flower. Values exclude international freight and insurance and are not adjusted for quality or product mix.

Why Growing Cannabis Demand Does Not Guarantee Higher Prices

The economic connection runs through the alternatives available to the producer. Once cultivation has been built and cannabis harvested, the owner faces a different decision from the investor who originally financed the facility. Holding saleable stock ties up capital, costs money, and exposes the product to deterioration or expiry.

Where alternative buyers are limited, a lower offer may be preferable to another month of storage, even if the sale does little to recover the original investment. Available cultivation capacity allows deliveries to expand further without first building another facility. If enough eligible suppliers compete for those orders, prices can decline while patient demand continues growing.

And inventories need not fall for this to happen. They can keep rising whenever production exceeds sales and other outflows, which is consistent with the Canadian figures.

Canada’s Cannabis Act review panel explicitly linked excess production to lower wholesale prices. In Germany, Grünhorn described oversupply, aggressive pharmacy pricing and expiry risks in July 2025. The latter is a commercial participant’s account.

Together with the export calculations, it gives the supply argument considerably more substance. Nevertheless, Organigram’s Max Schwartz described how flower can change during weeks in transit, complicating the task of supplying European markets consistently.

He also said EU-GMP-compliant supply remained tight. Maybe abundant national biomass and a shortage of particular qualified products can coexist.

Organigram, Aurora and Curaleaf: The Economics of European Cannabis M&A

Organigram bought an established German commercial position through Sanity Group, whose reported revenue grew from €19 million in 2024 to €60 million in 2025.

Aurora would add an estimated annual capacity of 43,500 kilograms across four Canadian cultivation facilities, according to its June annual information form. Their certifications differ; that total should not be read as 43,500 kilograms of interchangeable EU-GMP flower. Aurora also has German manufacturing and British distribution, and in October completed a Leuna expansion expected to more than double annual flower output.

Curaleaf could put those assets to work through a comparable network. It completed the buyout of Four 20 Pharma in April, bringing full ownership of German distribution alongside cultivation in Portugal and Canada. Its third-quarter international revenue reached approximately US$59 million, up 28%.

The two bidders are trying to make their existing networks more productive by adding supply, manufacturing and customers that fit them.

There is a counterintuitive result in Germany that deserves attention here.

Cantourage (Frankfurt: HIGH) reduced second-quarter revenue from €27.9 million to €21.8 million between 2025 and 2026, while EBITDA rose 45% to €2.9 million. Management deliberately cut lower-margin German trading, emphasized premium products and expanded in Britain and Poland.

German sales more than halved. Part of the available growth was apparently less valuable to Cantourage than the business it chose to retain.

Organigram’s proposed Aurora transaction includes a concurrent £100 million investment from British American Tobacco (NYSE: BTI; LSE: BATS), and management projects more than C$50 million in annual synergies. In his interview with IgniteIt after the announcement, CEO James Yamanaka connected the combination to supply certainty and producing where costs are most favorable.

Germany’s Cannabis Growth Raises New Questions About Profitability

Cheaper flower makes those savings more consequential. It also raises the question of how much of them will remain with the combined company once its competitors respond. As I argued in my earlier column on Aurora’s valuation, the usefulness of those assets depends on the market they can serve. Germany improves that prospect, and the fall in export values changes the return that a buyer can reasonably expect from it.

Germany’s political decisions can change the calculation again. Statutory insurance stopped covering flower in late July, a channel Organigram said represented only about 1% of Sanity’s revenue.

Private prescriptions are much more important to that business.

The government’s proposal to require personal physician contact and restrict mail order therefore reaches closer to its commercial foundations. Those restrictions were absent from the consolidated law checked November 7; if adopted, they would make access less convenient just as suppliers are investing to deliver more.

Overall, Germany is making some of Canada’s accumulated investment more useful, while exposing it to another round of competition over price.

The export figures show a destination taking larger shipments at lower average declared values, and the inventory figures show that this has not exhausted the material accumulating behind it.

Buying access to German pharmacies can improve the return on existing cultivation.

How much a buyer should pay for that access depends on the margins left after cheaper flower, inventory carrying costs, and the practical expense of shipping and certifications. Germany’s rapid growth has made those assets worth contesting; it has also made their future earnings harder to extrapolate from sales alone. These questions will also be central to discussions at IgniteIt’s Cannabis Capital & Policy Summit in Washington, D.C., on November 18.