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Following Five Years of Medical Cannabis, Germany is Poised to be the Adult-Use Capital of Europe | Cannabis Business Executive – Cannabis and Marijuana industry news

By Niklas Kouparanis On March 10, 2022, Germany celebrated the fifth anniversary of medical cannabis legalization. It has been an eventful five years with plenty of challenges and limitations to navigate, overcome and learn from. During the five-year run, Germany’s medical cannabis market has experienced falling prices, consolidation and a supply that has at times…
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By Niklas Kouparanis

On March 10, 2022, Germany celebrated the fifth anniversary of medical cannabis legalization. It has been an eventful five years with plenty of challenges and limitations to navigate, overcome and learn from. During the five-year run, Germany’s medical cannabis market has experienced falling prices, consolidation and a supply that has at times failed to meet the population’s growing demand within the first two years of its rollout. However, many are optimistic that the planned legalization of adult-use cannabis in Germany will be the cure-all and bring new growth and investment opportunities to the market.

With Germany poised to be the largest adult-use cannabis market globally and the adult-use market likely to come online by 2024, it’s crucial that the updated program be set up for success. That means relying on the expertise of the select leading companies that have efficiently navigated through and scaled their businesses in the current challenging market.  With the global cannabis market predicted to reach more than $61 Billion USD in 2026, according to BDSA’s Briefing on Legal Cannabis Forecast, now is the time for Germany to create the most progressive adult-use program to date and finally take the reigns of the global market, out of the grip of the U.S. and Canada.

Early Highs and Woes of Germany’s Medical-Only Market

Experience in the medical market has shown that cannabis legalization is neither a piece of cake nor a “picnic,” as referred to by the new drug commissioner of Germany. When medical cannabis was legalized in Germany back in 2017, eligible chronic disease patients were given access to cannabis to meet their medical needs. But over the years, both patients and businesses had to face serious challenges when it came to the access and supply of medical cannabis.

One of the challenges has been that many physicians continue to be hesitant to prescribe the plant to meet their patients’ medical needs. In addition, patients and doctors are required to complete complex paperwork for permission to receive medical cannabis and get insurance coverage for the prescription.

Another issue that came with the medical cannabis program’s rollout was that there has been a limited cannabis supply that has not always matched the increased numbers of patients. In the beginning like other European markets, Germany was importing its supply from only the Netherlands and Canada. Due to foreign export regulations – these facilities needed to meet the stringent regulations of both European GMP (Good Manufacturing Practices) and GACP (Good Agricultural and Collection Practices) – costs for medical cannabis were higher and consistent supply was harder to come by during the first two years of Germany’s medical cannabis market.

Hard Lessons Lead to An Optimistic Future

However, the struggles of the early market seem to be dissipating with time. To increase patient access to medical cannabis, companies such as Algea Care have started to offer cannabis treatment visits through telemedicine. In the past 18 months, Alega Care treated 6,000 patients and has become the leading European telemedicine company for medical cannabis.

It’s not only patient access that has improved – today, about 100 wholesalers in Germany supply around 160 different varieties of medical cannabis. Price margins continue to tumble, allowing businesses to supply an affordable and more consistent stream of cannabis treatment for medical patients and keeping sellers on the illicit market at bay. The companies that have been able to secure affordable, high-quality products that are in line with Germany’s strict pharmaceutical requirements and can access a large number of patients are the ones that will come out on top after the market consolidation, while the businesses that fail to meet these needs will start to vanish.

In addition, the German cannabis companies that continue to survive and thrive often live by the motto “too big to fail.” They progress through consolidation phases and use their expertise to meet the needs of the market, ultimately showing that legal cannabis in Europe can be an accessible, affordable and highly lucrative player in the global market.

Setting Germany Up for Adult-Use Market Success

What will truly set the German, and European market as a whole, apart from its North American counterparts is the fact that cannabis can be imported and processed according to pharmaceutical standards. With the U.S. market growth stifled among siloed states’ varying regulations on both medical-only and recreational cannabis markets as well as restrictions on both state-to-state and international trade, Germanyhas the potential to serve as the vital linchpin to opening up cannabis trade globally upon legalization of adult-use – allowing for international investments, business growth and tourism ventures to thrive.

Germany’s government has already outlined the objectives of adult-use cannabis. These objectives will include legal cannabis sales outlets, which might also include pharmacies, to ensure the protection of minors as well as product safety for consumers and sales metrics. Product safety and quality, affordability and access will be just as key in unlocking the true potential of the adult-use market, as it has proved to do in the medicinal market. These are necessities not only to grow the German industry into the hub of the global market but to also sideline products being sold on the illicit market, both foreign and domestic.

Henceforth, Germany has the potential to be the world leader of adult-use cannabis and shift the market to be global, with companies conducting business across continents. However, it is of utmost importance that we apply the hard lessons learned during the adaption of the medical market to our transition into an adult-use market and avoid making the same mistakes. Product quality and safety, affordability and access will be the pillars to building a successful market and it is crucial for German leaders to shape the framework to foster these conditions for and with local licensed cannabusinesses. With these key practices in place, Germany is poised to be a pivotal leader in the global cannabis industry.

 

The post Following Five Years of Medical Cannabis, Germany is Poised to be the Adult-Use Capital of Europe appeared first on Cannabis Business Executive – Cannabis and Marijuana industry news.

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