Alfredo Pascual is back for his fourth appearance on The Cannabis Conversation, a record for the podcast. His first episode was number 15, recorded in mid-2019 when the German market was just finding its footing after the 2017 law change. Since then he has appeared in 2020 and 2021, and on each occasion his measured, evidence-based analysis has proven more accurate than most of the louder voices in the room.
Originally from Uruguay, Alfredo moved to Germany in 2013 to complete a master’s degree in public policy. The timing proved fateful. Uruguay became the first country in the world to legalise cannabis on a national level in December of that year, and the policy debate found its way into his academic focus. He wrote his master’s thesis on drug policy, then knocked on the door of a Uruguayan cannabis company with European ambitions. That was 2016. The German medicinal market had fewer than a thousand patients at the time.
From there, Alfredo became a recognised voice of reason through his work at MJBiz Daily from 2018 to early 2021, covering the European cannabis industry during its most feverish years. He went on to work with Seed Innovations, a European cannabis investment company, making a meaningful investment in German operator Astra that was partially exited at a significant premium in 2023. He later completed his CFA programme and became a charter holder.
After a period focused on other industries and investments, the cannabis industry pulled him back. He is now fully re-engaged with the European market and brings to this conversation a depth of institutional knowledge that is genuinely rare.
In this episode, Nikita and Alfredo work through the current state of German cannabis regulation, the proposed law amendment from the health ministry, why the market is seeing a surge in mergers and acquisitions despite regulatory uncertainty, what the GKV reimbursement proposal means for flower, and how the major medical cannabis markets outside North America actually stack up in 2025 numbers.
Key Highlights and Insights
The Illicit Market Is Not Growing the Way the Data Suggests
Border seizures of illicit cannabis in Germany approximately doubled in 2025 compared to 2024, reaching an estimated 50 tons. The current government is presenting that as evidence that the market is out of control. Alfredo offers a more careful reading. More seizures do not necessarily mean more consumption. Police enforcement priorities and capabilities shift. More importantly, the routes through which illicit cannabis enters Germany appear to be changing, moving away from truck shipments from Spain toward air and sea freight from North America and Thailand. Those routes have a higher interception ratio, which mechanically produces more seizures without necessarily reflecting growth in overall illicit consumption. Wastewater analysis, which measures metabolites in the population’s urine on a consistent basis, is not showing increased cannabis consumption in Germany.
The M&A Wave: What Is Actually Driving It
The surge in mergers and acquisitions across the European cannabis market in 2026, most visibly the Organigram acquisition of Sanity Group which carries British American Tobacco exposure, is being driven by several overlapping factors. The import volume story for Germany is compelling and hard to ignore. The regulatory fears of the second half of 2025 have moderated. And deal momentum feeds on itself: once one significant transaction completes and generates attention, others accelerate to avoid being last.
Alfredo urges one important point of nuance. The headline acquisition prices being reported include substantial earnout components. The cash changing hands today is a fraction of the stated transaction value. That earnout structure reflects genuine enthusiasm for the opportunity alongside genuine acknowledgement of remaining risk. In contrast to 2018 and 2019, when all-cash transactions above 100 million euros occurred, that structure is simply not appearing in 2025 and 2026 deals.
The Government Is Introducing Friction Without Defining Success
One of Alfredo’s sharpest observations is about the absence of any defined outcome metric in the proposed law amendment. The previous government removed cannabis from the narcotics list without establishing a framework for measuring what an appropriate level of market growth would look like. The current government is responding to roughly 176% import growth (from 2024 to 2025) without separating how much of that reflects genuinely unmet medical need now being addressed versus how much reflects abuse of the system. No such study has been done. The government explicitly acknowledged in a parliamentary inquiry, prompted by questions from the Green Party, that it has no data on how many people the legal cannabis industry employs or what revenue it generates.
The result is a blunt instrument being applied to an unmeasured problem, with the patients who genuinely need access bearing the cost alongside those the government suspects are gaming the system.
The GKV Reimbursement Proposal
Among a package of 66 proposed measures to stabilise the German public health system’s finances is a proposal to remove reimbursement for medicinal cannabis flower. Extracts would remain reimbursable. Alfredo estimates the reimbursed flower market at approximately 130 million euros in 2025, out of a total reimbursed cannabis market of around 250 million euros and a total German flower market estimated at approximately 1 billion euros. If the proposal passes, the most likely outcome is a partial shift from reimbursed flower to reimbursed extract, a partial shift to out-of-pocket flower purchases at lower current prices, and a smaller portion potentially moving toward illicit supply. The impact on the overall market would likely be more moderate than the headline number suggests, though it is a further signal of the current government attacking the market from multiple angles simultaneously
European Market Sizes in 2025: A Simple Framework
Alfredo offers a straightforward rule of thumb for the major medical cannabis markets outside North America in 2025. Germany was approximately 1 billion euros for the flower market. Australia was roughly half that at around 500 million euros. The UK was approximately half of Australia at around 250 million euros. Poland came in below 100 million euros in revenue terms, though its volume recovery after the 2024 telemedicine ban was faster than most expected, returning to pre-ban monthly volumes within approximately one year. German operators are increasingly looking at Poland and the UK as the next markets of growth, partly because price compression in Germany has made those markets comparatively more attractive on margin.
Top Quotes from Nikita and Alfredo
“Just because you make it disappear from the legal market doesn't mean that it's going to disappear."
"And now, they're just making it easier for them again... it's almost like the illicit market has a lobby."
"Their solution is a hammer, introduce frictions in the medical system, kind of... force people to go back to the illicit market, which is a negative outcome for everyone other than the illicit market."
“I think there was also this preconception that as soon as recreational opens up, the medical market will fall. Whereas really when the partial legalization came, the one winning side of the industry was the medical cannabis market.
"If there was no priori analysis of what the right range should have been, then any development in the market can be interpreted in two opposite ways driven by politics rather than analysis."
"These big companies, they don't pave the road. They wait for the little guys to pave the road and then they buy the road."
"(In 2025 import numbers) I'm overly simplifying the three markets (analysis), but a simple way to remember: Germany was 1 billion, Australia half of that, and UK half of Australia in Euro equivalent."
"I think we're really seeing so much competition, price compression, especially in the German market that we're now also seeing German operators looking at Poland and the UK as the next market of growth."
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