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Country Overview
When outsiders think of Europe they do not immediately focus on Germany, it is often overlooked from the rest of the EU. They immediately focus on its best known characteristics such as beer, dirndls and famous schnitzels or their negative characteristics such as their disastrous past events. In reality, Germany is the most notable due to its intense and successful reconstruction and recovery after both world wars.
Germany is a country that has gone through turmoil in the past but it has proven itself to be one of the most successful countries in Europe. It is highly developed and has the largest national economy in Europe and fourth best in the world. With a very open minded chancellor, Angela Merkel has changed the politics of Germany and the way it is perceived. Merkel follows humanism and internationalism tenets and it has reflected on the german people. Germany has followed a conservative spectrum for decades and in just recent years it has quickly changed. Politics and the way citizens perceive notions has taken a more hospitable and generous approach.
The U.S. is a traditional close ally to Germany due to the support of the states with not only Germany’s but Europe’s reconstruction after WWII. The good relations between these two countries has allowed for Germany to become the largest trading partner for the U.S. in Europe. Relations improved once President Obama became president in 2009, Merkel and Obama worked harmoniously to solve issues and became really good friends. Just two years ago Germany was the U.S. closest ally and now relations between the two countries has strained. President Trump has caused tension between both countries due to his constant attacks over trade and NATO disputes against Germany. Although there has been higher tariffs imposed on some products by the U.S., this has not slowed down trade traffic between both countries. Germany is still open to international trade and foreign direct investment that will help drive the economy.
Culture
Germany’s culture has been shaped by historical and intellectual events that occured in the past and it is widely known as the “land of poets and philosophers” (German Culture, 2019). They are home to philosophers such as Immanuel Kant and well-known physicist Albert Einstein. Other famous names include some of the best composers for classical music such as, Bach, Beethoven, Handel and Schumann. The official religion is similar to the states, with it being a Christian dominant country.
Their culture compared to the U.S. is much more calmer and not as diverse. Germans are very reserved and like their peace and quiet. To keep the quiet, German cities implement “quiet hours” meaning cars are not able to drive past a certain speed limit and folks going out must be quiet to not disturb the peace. Americans are known for the complete opposite, they are known for being loud and obnoxious. Germans are very direct and like to follow the rules. Cycling culture is very big and cyclist have the right of way when on the sidewalk, which is not common in the states. There are many differences in the restaurant/dining industry, roads, the way people drive and just daily life compared to in the U.S (German-Way, 2019).
In the business environment, it is a bit similar but the main difference the way they present ideas and/or solutions. Americans tend to be more straightforward and impatient and want to get their point across as quickly as possible. Germans like to take the time to analyze all information provided and take their time to make important decisions (German-Way, 2019). Business etiquette and the way to act with potential business partners is relatively the same for both countries.
They have a population of approximately 82 million people and their official language is German. Majority of Germany are fluent in english due to the fact that it is required to be taught at elementary schools, so there won’t be a language barrier when visiting. Its culture is also heavily founded on the love for beer and baked goods. Germany has the third largest beer consumption per capita in the world and they have a widely popular festival that is dedicated to drinking and celebrating beer (German Culture, 2019). They are also known for having 300 different varieties of baked bread and having an immense amount of bakeries to choose from.
The education system in Germany is well developed due to the government’s focus on internalization and improving their reputation for higher education. Internalization was a strategic objective that was implemented after statistics showed that Germany had the second oldest population after Japan and was estimated that the population will see a major decline in the following decades (World Education News and Reviews, 2019). Internalization will help with these issues by improving higher education and helping stimulate immigration by attracting more international students.
The literacy rate in German is 99%. Primary and secondary education is very important in Germany. They offer dual programs and preparatory classes for higher education. The Federal Ministry of Education in Berlin provide the framework for all education levels by managing funding, financial aid and entry requirements for professions (WENR, 2019).
Leadership
Germany is a democratic country and a parliamentary republic, which power is vested to the chancellor that is appointed by the president. The current president of Germany is Frank-Walter Steinmeier and his major roles is to appoint the federal chancellor and the chancellor cabinet and federal judges and signing all federal legislation and treaties. The appointed chancellor, which is Angela Merkel, runs the government and initiates government policy. The chancellor has extensive autonomy and powerful initiatives when dealing with issues. Germany has two chambers, the Bundestag and the Bundesrat. The Bundestag is made up off 600 members and it exercises the majority of power. It is where all legislations are created. The bundesrat is the upper chamber consisting of 69 members and they focus on state legislations (Brittanicca, 2019).
Hemp in Germany
Hemp is a cannabis plant that is useful for many things. Hemp produces Cannabidiol, also known as CBD, and it is used for healing and medical purposes. The CBD oil, which is made by the hemp leaves, flowers and stalks, does not have any psychoactive effects it’s more of an anxiety reliever. It is the same with hemp oil, this oil is gathered from the seeds of hemp and it is also used as a stress reliever. Both oils contain low levels of THC, which is the main psychoactive component in cannabis (Rivard, 2018).
Hemp was used for decades in Germany before it was banned in 1930, when an anti-marijuana campaign led in the U.S. became very popular. This campaign caused for other countries to follow in the U.S. footsteps. The ban was later lifted in 1995 after the hemp industry saw a massive growth. Since then Germany has allowed businesses to acquire licenses to sell and produce CBD. The hemp industry is increasing and becoming more and more popular since medical marijuana was legalized in 2018. The market for hemp products is still pretty new even if it has been legalized for many years now.
The reason why the market has been growing so rapidly is due to hemps versatile usage. Hemp can be used to make self care products, durable fabrics, food, construction materials, plastic composites, it has properties that can clean the soil and more. It can be grown as a renewable resource to be used to make thousands of products. Growing hemp does not require much maintenance, they do not need as much water compared to other crops and no pesticides. A con to growing industrial hemp is that the plant grows vigorously and it is very unpredictable on how fast and how large it will grow. The estimated harvest time is 4 months. With industrial hemp producers focus on the stalk and leaves of the cannabis plant so the pulling process must be very careful.
The demand for hemp and medical marijuana has increased 43% in 2018 after the legalization in 2017 (Dobush, 2019). Germany does not keep track on how much is being sold so it is hard for companies to analyze the market. German authorities do not publish any data on how much cannabis is being sold how many people have purchased it. According to the National Association of Statutory Health Insurance, publishes data on insurance reimbursement on medical cannabis and they reported about 100 kg of cannabis was being reimbursed per month. Out of all reimbursements cannabis made up 43% and it totaled 13.3 million euros (NASHI, 2019).
As sales increase the demand will too. Currently Germany’s hemp exporters are Canada and The Netherlands. The Netherlands just doubled their exports of hemp from 700 kg to 1500 kg. As demand increases Germany will be looking for more suppliers to be able to meet demand. The domestic market of hemp is blazing and more companies are seeing great potential in the market. German has been struggling to meet demand ever since medical marijuana were legalized. Although hemp has been legalized since the late 1990’s the trend of medical marijuana has boosted the production of hemp products in Germany.
Rules/Tariffs
Hemp cannot simply be sold as plants to the customers its a result of a recent amendment to the country’s Narcotics Act. According to the act, a person can only handle unprocessed hemp if it serves “exclusively for commercial or scientific purposes, which exclude an abusive or intoxicating purpose. Authorities are only allowing customers with a business license to trade hemp to pick and purchase. The European Industrial Hemp Association (EIHA) supports the development of a harmonized legislation in this field, to make sure that consumers are protected, to sustain the industry’s current double-digit growth rate, to attract new investors and to boost product development. The legislation should avoid any restrictions for CBD and clarify that extracts and preparations from industrial hemp are not narcotics in the EU.
Trends
Some trends that will influence the hemp industry are the self-care and beauty trends, eco-friendly living and construction on homes. In beauty, Germans follow a “less is more” approach and tend to use less make-up and focus on skin health. With the acids in hemp oil, such as linoleic and oleic, help fight wrinkles and it is used as an anti-aging oil (Healthline, 2019). Hemp oil also has nourishing vitamins and moisturizing qualities which moisturizes and soothes inflammation. Hemp oil is great for improving the health of your skin and as this trend of using less make-up and focusing on skin care becomes more popular the demand for these oils will increase.
Germany is known for being a country that has focused on climate change and have a set system on how to become more eco-friendly. They have taken action on scientist warnings on how we have to decrease our dependence from fossil fuels. Germany has inforced many policies on eliminating waste and decrease the usage of fossil fuels, such as The Cogeneration Act and the Renewable Energy Act. They are also very strict about recycling and plastic usage. Something good about hemp can be made into biodegradable plastic that can be used in packaging and other usages. The German government is already very strict on all these issues so introducing these products will help solve some issues.
Target Market
Hemp is used for many different reasons; durable textiles, healing creams and oils for muscle pains and also be used to moisturize and anti-aging cream. The target market in Germany will be vary depending on the product. For its oils and creams, the product will be targeted towards women and people who need medical attention. High anti-aging creams are already very popular among women. As industrial hemp producers, we will focus on what is in high demand in Germany, which are oils and creams. These creams can be used for medical relief and also as beauty products. Our targeted market for this product will be for women and people who are seeking these products for medical relief
Economics
If industrial hemp is to have a future in Germany or other Western countries, hemp-based product lines will have to be established on a relevant scale within the next five years. The emerging German hemp industry is now faced with the question which of the numerous potential products will have a realistic chance of successful introduction into German economy under technical, economic, and environmental criteria. This question has now been answered by the ‘Hemp Product Line Project’ (HPLP). At least 11 product lines based on hemp fibers, hurd, seeds/oil and cannabinoids are suitable for establishing the foundation of a sustainable German hemp industry by the year 2000. Investments and marketing activities should focus on their implementation.
Germany’s GDP.
As of 2016 Germany’s GDP accounted for over $3.652 Trillion. The gross domestic product (GDP) or value of all final goods and services produced within a nation in a given year. A nation’s GDP at official exchange rates (OER) is the home-currency-denominated annual GDP figure divided by the bilateral average US exchange rate with that country in that year. The measure is simple to compute and gives a precise measure of the value of output. Many economists prefer this measure when gauging the economic power an economy maintains vis-Ã -vis its neighbors, judging that an exchange rate captures the purchasing power a nation enjoys in the international marketplace. Official exchange rates, however, can be artificially fixed and/or subject to manipulation – resulting in claims of the country having an under- or over-valued currency – and are not necessarily the equivalent of a market-determined exchange rate. Moreover, even if the official exchange rate is market-determined, market exchange rates are frequently established by a relatively small set of goods and services (the ones the country trades) and may not capture the value of the larger set of goods the country produces. Furthermore, OER-converted GDP is not well suited to comparing domestic GDP over time,
