Medical Cannabis in Germany
The legalization of cannabis has been a long-debated topic in Germany and, with the new government, will be implemented in the near future. In 2017, the German Government allowed the use of the active ingredient THC for medical reasons – when prescribed by a doctor – with the cost being reimbursed by the patient’s health insurance. Since then, the German market has become a hotspot for the Cannabis industry. The Bundesinstitut für Arzneimittel und Medizinprodukte (legal manufacturer and contracting entity for medical cannabis in Germany) has awarded an exclusive logistics partner status to the company Cansativa and there are three firms authorized as contract manufacturers / cultivators:
- DEMECAN – the only German company that cultivates, processes, and stores medical cannabis for distribution to pharmacies. In January 2022, DEMECAN received §13 AMG (German Medicines Act) and GMP (Good Manufacturing Practice) certification and will deliver the first “Made in Germany” product in Q1 2022.
- Tilray (Tilray and Aphria Inc.) – In July 2021, the company harvested the first crop of medical cannabis for distribution to pharmacies in Germany. After the legalization of medical cannabis, the company expects a revenue of US$ 1 billion in Europe.
- Aurora Cannabis Inc. – The company is also expanding in the Netherlands, and recently acquired Growery B.V., which has a licence for cannabis production in the Netherlands.
It is evident that the companies who have access to the controlled supply chain and can first enter the market once legalization is approved, will take the biggest share of the pie. Legalization will make Germany the largest market in the world for the sale of recreational cannabis, and the rest of the European countries are likely to follow the trend.
The business is attracting attention and there is a continuous rise in export and distribution partnerships among the few major companies. Cansativa, which is the authorized medical cannabis distributor in Germany, is expanding its business and has received a funding of US$ 15 million in February 2022, led by venture capital company Casa Verde, a firm of rap legend Snoop Dogg. Cansativa is intending to build a B2B platform for value chain management, offering solutions from import to distribution with access to thousands of pharmacies across Germany to its customers.
According to a study conducted in 2021 by the German Hemp Association (Der Deutsche Hanfverband) and the Düsseldorf Institute for Competition Economics (DICE), the legalization of cannabis would generate more than € 4.7 billion per year through additional tax revenue and social security contributions as well as savings in law enforcement and the judiciary, along with creating up to 27,000 legal jobs in the cannabis industry.
The legalization of cannabis will also relieve the police and consumers of more than 100,000 criminal cases per year.
Possible revenue streams after cannabis legalization
Although the decision comes with its own situational challenges from a legal as well as consumer perspective, the businesses appear to be ready to ride this new “green wave”.
Quellen:
- Der Deutsche Hanfverband (DHV)
