In its latest industry report, Marijuana Business Daily revealed several intriguing features about the fast-growing European cannabis market. But many of the findings are not new. Instead, they indicate the continuation and deepening of trends from 2019. The most striking of which has been German dominance in the medical marijuana space. Not only has Germany enjoyed further growth of its medical cannabis sector, but it is doing so faster than any other EU country.
What’s more, many German doctors who are prescribing cannabis to patients are doing so with the help of insurance providers.
The rest of the union, however, posted little growth. The sum of this analysis indicates that Germany has either cracked the cannabis code or that other nations have simply failed to take the plant seriously enough to implement amenable regulations.
Germany as a gateway country for cannabis
Germany was, far and away, the greatest beneficiary of last year’s cannabis boom.
Demand met thoughtful regulatory adjustments, and medical professionals were confident to prescribe medicinal products. Rarely is this the case in other countries.
In the UK, though soon-to-be an independent nation, medical professionals are also legally allowed to prescribe cannabis, but very few are doing so. Experts have cited a lack of education as the main culprit. And even once patients are qualified, the cost of medicating can be prohibitively high. Rarely are these costs covered by Britain’s National Health Service (NHS).
Though such ventures can always be improved upon, no matter the country, it appears that Germany has the least amount of work to do on this front.
Source: Marijuana Business Daily
Since medical cannabis became legal in 2017, Bavaria, a southern region in Germany, led the country in the number of reimbursement applications for medical patients. This means that there are more patients willing to explore cannabis, more medical professionals willing to prescribe the medication, and a wider acceptance from insurers to help cover costs.
As a side note, Bavaria enjoys this lead due to forward-thinking research projects in the 1990s. Dr. Ursula Marschall, the chief medical officer of the insurance provider, Barmer, told Health Europe in March that:
‘There are so many cannabis regulations in Bavaria because there was a research focus at the University of Munich in the mid-1990s. The doctors are accordingly experienced in formulating the applications.’
Dr. Marschall also indicated that the number of applications had steadily been increasing since the change in laws. Approval ratings, which indicate how many doctors are offering patients access to cannabis, are also increasing.
This analysis gives a brief glimpse into how citizens are able to enjoy relatively efficient access to critical medicines. Health insurers, doctors and patients are aware of the potential for cannabis. Though this process could be drastically improved, it is one of the major reasons why Germany stands head and shoulders above other European countries when it comes to cannabis.
These prescriptions are dominated by dried flower, too.
Source: Marijuana Business Daily
Despite the country’s dominance in terms of distribution, adoption and medical acceptance, Germany continues to rely heavily on Canada, Portugal and the Netherlands for its cannabis supply. According to the report:
‘Roughly 6,500 kilograms (14,330 pounds) of flower were imported to be dispensed to patients in pharmacies, more than double the 3,000 kilograms imported in 2018.’
These importers will continue to enjoy their position in the market as German growers won’t expect their harvest to mature until the final months of 2020.
Even then, the local supply likely won’t sustain demand. Following the legalisation of medical cannabis in Germany in 2017, the country has seen a healthy uptick in new patients. This trend continued and pushed the government into growing locally to help maintain this trend. Three growers emerged from a tender process, in which Aphria, Aurora, and Demecan were licensed to grow 2,600 kilograms of medical-grade cannabis flower from 2020 to 2024.
In the case that this demand overtakes current suppliers, however, there is little that can be done outside of waiting. This is due to the impact of the coronavirus.
Before a company can import cannabis to any European country, it must first become EU-GMP certified. To earn this coveted certification and begin servicing the European economy, government officials must first inspect and audit facilities. This means that in-person visits are crucial. In times of COVID-19, however, this is nearly impossible.
The report states:
‘As a result, the companies whose facilities weren’t audited before the pandemic faced a challenging situation when this report was published, with the chances of getting EU inspectors to travel overseas slim. This means, for now, that the handful of EU-GMP-certified companies supplying Germany with medical cannabis from Canada and from inside the EU are likely to continue enjoying an effective oligopoly.’
This certification is the first major hurdle before entering the German market. After that, things don’t get much easier for aspiring entrepreneurs.
Becoming a German cannabis wholesaler
Though the German landscape offers the most optimistic vision for cannabis entrepreneurs, there are still only a limited number of business models. The primary opportunities lie in either wholesale or distribution.
Unfortunately, the former is saturated with over 50 existing players, and Germany is only looking for one single cannabis distributor.
The process of becoming a cannabis wholesaler in Germany is straightforward. It consists of applying for a licence at nearly every tier of government. This licensing process looks different based on the region too. Thus, this path is riddled with various regulatory hurdles.
For the persistent, however, it may be advantageous.
The next opportunity is still up for grabs. Becoming Germany’s sole cannabis distributor, a key link between pharmacies and growers will be given to a company with relevant history dealing in narcotics.
According to the German cannabis agency, BfArM, the winner of the application will move local cannabis around the country for the next five years. The application deadline has been extended to May 28, 2020, due to the coronavirus disruptions.
Although there are many bottlenecks throughout the burgeoning German cannabis space, there are just as many regulatory hurdles too. But for patient entrepreneurs, the cannabis sector in Germany is opening up slowly but surely. Once domestic growers have been established and a supply chain has been established, there will be more room for invention. The limits of such creativity can be understood as the difference between the Canadian and European markets.
In North America, citizens enjoy a wide variety of strains, mediums of ingestion, locations, and even suffer from a highly-saturated market. Conversely, leaders of cannabis in the EU are still struggling with education, distribution and getting the medical community up to speed. These obstacles are not for members of the business community to solve, however.
The regulatory tides of change move much slower than those of the startup world. Perhaps the best plan is for budding cannabis entrepreneurs in Europe to find a steady, no-fly zone such as the world of cannabidiol (CBD).
Related: CBD is Still a Novel Food in Germany
There is still much work to be done in this field, and authorities appear more flexible to experiment with the non-psychoactive component of cannabis.