Germany’s Cannabis Market Struggles to Meet Medical Demands In 2018
When medical cannabis was legalized within the last year of 2017 in Germany, the demand exploded. Doctors prescribed large amounts and pharmacies ran out of stock. The prices rose which made insurance companies stricter in their payments. It was expected that the situation will gradually stabilize and prices will fall in 2018. However, the current reality is very different.
The demand for cannabis is still on the rise for this new year of 2018. Despite Germany’s soaring cannabis imports. There are 20,000 pharmacies throughout the country who are having a hard time getting their hands on medicinal cannabis. The price for five grams (0.18 ounce) of medical cannabis starts from $125. Many insurance companies approve only two-thirds of coverage applications according to a news report from Marijuana Business Daily. Moreover, patients are led to consider acquiring cannabis from the black market, because Germany's prices are too expensive to purchase.
Germany Needs to Import Huge Volumes of Medical Cannabis for The Next 5 Years
Germany plans to start cultivation at home in 2019 as they plan to grow 6.6 tons between 2019 and 2022. However, this isn’t sufficient enough to meet all the demand. In addition, acquiring licenses can take longer than expected, due to the bureaucratic complications. This can make companies fail to achieve the targeted production numbers.
Currently, medical cannabis is imported from Canada and the Netherlands. Recently, Australian companies were given a chance to join the competition as well. It’s safe to say that international producers can look forward to expanding their exports toward Germany within the next 5 years.
According to Deutsche Welle (DW) Cannamedical, one of the leading importers of cannabis in Germany, plans to import 22 tons of medical cannabis for 30,000 patients in 2018. Several factors contribute to the supply shortage in Germany.
Germany Is a Huge Market
Germany is the largest country in EU. It has a thriving economy with a population of 82 million. The median age in the country is about 50, higher than the world average. Higher median age means more patients are suffering from illnesses that require the use of medical cannabis. Local production that is still in its infancy cannot meet such a demand.
In 2017, the market value of medical cannabis in Germany was estimated to be €10,2b ($12.7 billion). The number will be higher in 2018.
Furthermore, recreational consumption is illegal for now, because punishment has become increasingly lenient as attitudes toward cannabis are shifting. Last year 83,000 Germans signed the petition for the legalization of cannabis for recreational use. Already 13.3% of young adults between the ages 18-34 illegally use cannabis for recreational purposes.
German Patients Cannot Grow Cannabis for Personal Consumption
Back in 2012, Michael F., who was suffering from multiple sclerosis, started growing his own cannabis at home. Germany’s Federal Institute for Drugs and Medical Devices (BfArM) sent him a cease and desist order. They ended up in court. And the court decided in Michael’s favor.
After the decision, the German government sought the legalization of medical cannabis. But not for the sake of letting Michael or other patients grow their own plant. On the contrary, the move was meant to give the government complete power over cultivation and distribution. German laws don’t allow growing cannabis at home.
Therefore, even though medical cannabis is legal, patients have no right to produce it for their personal consumption. In such an environment where local production hasn’t been set up yet, export is the only viable and legal option of getting cannabis.
Strict Regulations Don’t Let Prices Drop
Another last factor is the hardships Germany companies have to face if they want to start growing cannabis. Last year, BfArM set up cannabis department in its Federal Opium Agency. BfArM doesn’t cultivate cannabis, but it makes tenders for companies interested in setting up production facilities.
Although the regulations are very strict, the Federal Opium Agency only licenses companies that have already cultivated cannabis in the past. This is an impossible requirement to meet with German companies as cannabis production used to be illegal in the country. This paradoxical German bureaucratic creation is another reason why Germany cannot meet demand via local production.
Therefore, at the moment it’s up to exporters in Canada and Netherlands to meet the demand in Germany. In short, the largest market for medical cannabis in Europe is having trouble in Germany. However, only time can tell us how Germany’s cannabis market will evolve for the year 2018 and beyond.
Hopefully Germany will have Medical Cannabis soon. Interesting read.