Getting a Gauge on Germany’s Latest Engagement with Legal Cannabis

germany cannabis flower

By Oliver Bennett, Special Contributor to New Frontier Data

One of the signal events of the cannabis industry’s calendar – the International Cannabis Business Conference – is due to take place in Berlin, over 25-27 August. As well as the business-to-business activity, it will include a one-day Global Investment Forum, surely aiming to set a tone for the post-pandemic economic recovery.

The venue is apposite, as all eyes will be on the German capital and Germany itself. For cannabis is bullish in Europe’s largest market – particularly in the country’s medical cannabis sector. The 90,000-130,000 medical cannabis patients have hitherto relied on imports: Germany legalized the drug for medical use in 2017, and last year imported a record 9,249 kilograms, but access was still limited. Now the country’s patients are poised to breathe easier.

Recently, medical cannabis produced by Germany’s Aphria (incorporating Tilray, since their recent merger) was harvested  in its 6,000 sq.-meters facility near Hamburg, for products now starting to make their way into German pharmacies for pain, spasticity, or anorexia sufferers – the first German-grown cannabis to do so. Imports will stay, but Germany’s long-desired will to self-produce is now bearing fruit. It is late – under the 2017 cannabis legalization strategy, homegrown medical cannabis was expected by the end of 2020, and was subject to pandemic-induced delays. Yet, it is happening, and causing a wave of interest within the industry.

The development is significant because Germany is expected to be the world’s most valuable medical cannabis market, and some hope for a knock-on effect for its recreational markets, given that Switzerland and Luxembourg – both bordering Germany – are pressing ahead with trials. At the medical level, the Aphria harvest is also changing minds, as the company has been lobbying German doctors on the benefits of prescribing medical cannabis; in Germany, pharmaceutical companies rely on representatives to educate doctors, and health insurance generally covers the costs of medical cannabis. With an expected million-plus German patients gaining access to cannabis by 2024, with a medical cannabis market expected to be worth around €7.7 billion by 2028, one can see why Germany is considered such a prize.

Much in Germany depends on the state, in the form of the Federal Institute of Drug and Medical Devices (BfArM). After a tender process, two other cultivators were chosen with Aphria in 2019 to produce medical cannabis domestically, including Aurora and (German company) Demecan, with a price set €4.30 per gram. Aurora has yet to establish a site; meanwhile Demecan (in both Berlin and Dresden) is set to begin production yet this year. Another state organisation, the Cannabis Agency (Cannabisagentur), founded in 2017 by BfArM, is responsible for overseeing production, marketing, quality control, and distribution of medical cannabis. The state agencies have a tight hold on the market and medical cannabis still comes under strict drug laws overseen by BfArM.

From those three cultivators, a volume of 10.4 tonnes of cannabis has been expected in four years, but the contracts have allowed the competitors to increase their domestic production by 10%. According to Denise Faltischek, Tilray’s chief strategy officer and head of international, the achievement relied on the “trust and cooperation of the Federal Institute for Drugs and Medical Devices (BfArM) and the Germany Cannabis Agency.”

Of course, others want in on the German medical cannabis market. The recent news that Kanabo had acquired Materia to create Europe’s largest cannabis company, specified immediate access to German pharmacies, showing the dominance of the country. Israel-based Panaxia just announced that it will market medical cannabis products alongside German oncology company AxioNovo, building on Panaxia’s use in Israel for oncology patients. The first sales are due shortly, subject to regulatory approval.

As elsewhere, some would apply societal brakes on cannabis. Medical stigmatization deters patients from accessing medical cannabis, which is why Cannovum – an importer and manufacturer of medical cannabis – aims to supply patients with organic and sustainable medical cannabis. The first German medical cannabis business to be listed on the German stock exchange, Cannovum features 30-year-old CEO Pia Marten (the youngest female to head a listed company) and  has created its own medical advisory board to promote and increase the numbers of doctors trained in medical cannabis.

Cautionary voices have also been raised. Retail prices are expected to lower, and threats from countries with lower labour costs (e.g., Portugal) have led to suggestions that German companies should fix on processed cannabis products. Imports will obviously continue: VIVO, for example, has announced that the import of Canadian grown dried flower medical cannabis from VIVO’s Ontario site will feed Germany’s market. Meanwhile, the buzz around Germany’s cannabis potential cannot be quelled.

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