North American players took notice. In June of this year, NASDAQ-listed cannabis producer Organigram Holdings invested in Berlin-based cannabis company Sanity Group with hopes of gaining a foothold in what it sees as a high-growth market.

With a distribution network of more than 2,000 pharmacies, Sanity claims a 10% market share of Germany’s legal cannabis market—which, unlike in some other countries, is purely a medical market. 

Despite earlier speculations, the coalition, including the Greens, has only partially legalized adult use or recreational cannabis in Germany. Personal possession and cultivation are subject to strict limits, and while social cannabis clubs are now legal, they face considerable hurdles, making for a minimal commercial opportunity.

Instead, the real game-changer in the landmark Cannabis Act (CanG) moved forward by German Health Minister Karl Lauterbach is the reclassification of medical cannabis as non-narcotic. This simplifies the process for Germans to obtain medicinal cannabis legally, but only with a prescription.

While this may be a disappointment to legalization advocates, this is particularly good news for Bloomwell Group, a German medical cannabis startup backed by global investors who had been observing legal developments closely.

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“We hoped that the legislation under CanG would be enacted under Lauterbach’s framework, as designed, given that the legislation was perfectly suited for Bloomwell’s business model” Will Muecke, Chief Investment Officer at Bloomwell backer Artemis Growth Partners told Fortune.

Bloomwell’s main business line is a direct-to-customer platform where customers can register and fill out a questionnaire about their needs and get a personal recommendation on flower strains that may better suit them and that they could get via a local pharmacy. 

As per the law, the next step involves a doctor who will review the questionnaire and recommendation before making a prescription, either via a teleconsultation or in person. The company has four physical locations in Germany, but few patients choose that option, Bloomwell CEO Niklas Kouparanis told Fortune. “It’s very e-commerce-like,” he said.

With more than 300,000 appointments to date, Bloomwell saw a surge in demand since April 1—it now handles 15 times more patients a month than in March of this year, Kouparanis said. 

According to Muecke, this was possible because the company had anticipated market growth and built the onboarding and marketplace technologies it knew it would need to serve this new wave of new patients.

While Bloomwell and its investors had placed the right bet, there was still a lot of timing uncertainty to deal with. For Artemis Growth Partners, this meant continuing to fund the business throughout the long delays awaiting CanG to pass, and it was prepared to do so again “should CanG be again delayed past April.”

In the end, it didn’t have to, and neither did the other investors that had taken part in the multi-million euro funding round raised by Bloomwell in February 2023. These included Measure 8 Venture Partners, whose Chief Investment Officer Skylar Parsons says her team “could not have written a better plot line for Bloomwell other than perhaps CanG arriving sooner.”

German medical cannabis startups, in particular, can be grateful that things played out differently than in North America, where the legal recreational intensifies competition in many regions. 

Despite more limited competition, treatment costs are still going down, with patients paying an average of half the price for medical cannabis prescriptions compared to the beginning of 2023, according to a study conducted by Bloomwell.

Easier access combined with lower costs could contribute to more mainstream adoption of medical cannabis, including for common issues such as migraines and sleep disorders. This leads specialized firm Prohibition Partners to predict that German medical cannabis sales could reach €420 million in 2024 and pass €1 billion by 2028.