On October 26, DW reported that Angela Merkel’s party may be contemplating a move to legalize cannabis in Germany. On October 25, the CDU’s (Christian Democratic Union) interior policy spokesperson, Marian Wendt, highlighted the possibility of legalizing adult-use cannabis in Germany. However, he also expressed the need to control the production and distribution of marijuana. Wendt also highlighted that police and judiciary-related resources would be saved that would otherwise control the black market cannabis trade.
According to DW, these statements may be a sign of a significant shift in CDU’s conservative approach toward cannabis legalization. In an interview with the German Editorial Network, Federal Drug Commissioner Daniela Ludwig explained the importance of not relying only on ideology for deciding the cannabis legalization issue.
Instead, she explained the importance of opting for a collaborative, liberal, and health-oriented approach to solving this problem. Ludwig, who started serving in this position in mid-September, also plans to study cannabis legalization in Portugal.
The medical marijuana market in Germany
According to Reports and Data, the size of the global medical marijuana market was $11.7 billion in 2018. The research agency expects the market to grow at a CAGR (compound average growth rate) of 26.4% from 2018 to 2026. The market could be worth $148.35 billion in 2026.
Reports and Data estimated Europe’s share to be 28% of the global medical marijuana market in 2026. The research agency also expects Germany to emerge as the largest cannabis market in Europe.
Prohibition Partners has estimated the size of the German medical marijuana market to be 73.7 million euros in 2018. The research agency projected the market to grow to 7.7 billion euros by 2028.
Brightfield Group expects the size of the German cannabis market to reach $73 million in 2018. The consulting firm expects the market to grow to $2.7 billion by 2023. Brightfield Group also expects German CBD sales to grow from $38 million in 2018 to $605 million in 2023.
Snapshot since medical marijuana legalization
Medical marijuana has been legal in Germany since March 10, 2017. According to ABDA (Federal Union of German Associations of Pharmacists) and DHV (German Cannabis Association), as reported by The Local, medical practitioners wrote around 142,000 prescriptions in Germany in 2018.
In “The Germany Cannabis Report: Key Insights,” Prohibition Partners estimated the number of prescriptions processed in 2017 and 2018 to be 27,000 and 95,000, respectively. The report also estimates that by the end of 2018, 60,000 had registered in Germany for medical marijuana purposes.
According to DHV, there were 50,000–60,000 medical marijuana patients covered by health insurance by March 2019. This number has already tripled compared to that in the first 10 months of medical marijuana legalization in Germany.
Prohibition Partners estimated the size of the legal cannabis market in Germany to reach 16.2 billion euros by 2028. However, this assumes the legalization of recreational marijuana use in the country.
Canopy Growth is a leading player in the German cannabis market
Canopy Growth (CGC) has opted for the inorganic route to penetrate the German cannabis market. In November 2016, Canopy Growth announced that it had entered an agreement to acquire MedCann, a Germany-based cannabis importer and distributor. At that time, Germany’s cannabis industry depended solely on imports. Canopy Growth became the first legal North American supply source for medical cannabis in Germany. Currently, Germany is Canopy Growth’s second-largest market.
In December 2018, Canopy Growth acquired a leading vaporizer company, Storz & Bickel, for a total consideration of 145 million euros. Headquartered in Germany, Storz & Bickel strengthened Canopy Growth’s capabilities to design and manufacture medically approved vaporizers.
In May 2019, Canopy Growth acquired Germany’s leading cannabinoid-based pharmaceuticals company, C3. The deal was concluded for a consideration of 225.9 million euros. The acquisition helped Canopy Growth secure the first medically approved cannabinoid product marketed in Germany, Dronabinol.
Plus, this deal enhanced Canopy Growth’s sales and marketing capabilities and intellectual property. It also benefited Canopy Growth by adding pharmaceutical-grade API (active pharmaceutical ingredient) capabilities for medical marijuana.
Aphria in the German cannabis market
Prominent Canadian cannabis players Aphria (APHA), Aurora Cannabis (ACB), Cronos Group (CRON), and Tilray have also recognized the growth potential in the German cannabis market. These companies are primarily following the acquisition route for penetrating the German market. In its research report, Prohibition Partners also highlighted Bedrocan, Cannamedical Pharma, and Wayland as prominent players in Germany’s legal cannabis market.
In January 2019, Aphria acquired CC Pharma, a German pharmaceutical and medical marijuana distributor. The deal was valued at a cash consideration of 18.92 million euros and additional contingent consideration up to 23.5 million euros. This acquisition allowed Aphria to secure access to more than 13,000 pharmacies in Germany.
In April 2019, the German Federal Institute for Drugs and Medical Devices also selected Aphria to receive a cultivation license to produce medical cannabis in Germany.
In April 2019, the German Federal Institute for Drugs and Medical Devices also selected Aurora Cannabis for the domestic production and distribution of medical marijuana. The company secured a license for five of the 13 lots offered in the German cannabis production tender.
Aurora Cannabis’ license allows the company to produce medical marijuana for four years. According to the press release, the company would supply a minimum of 4,000 kg of medical marijuana in this timeframe.
Cronos Group and Tilray in the German cannabis market
In October 2017, Cronos Group announced a strategic distribution partnership with G. Pohl-Boskamp, an international pharmaceutical manufacturer and supplier. The deal provided Cronos with access to more than 12,000 pharmacies in Germany for over five years. According to the press release, Cronos Group would supply Peace Naturals cannabis products for distribution to G. Pohl-Boskamp.
Tilray announced an agreement with Cannamedical Pharma GmbH for the first export shipment of medical cannabis worth $3.3 million in August 2019. According to this agreement, the company would start supplying Germany with medical marijuana from its EU campus in Portugal. In October 2017, Tilray emerged as the first Canadian-licensed producer to import cannabis extract products in Germany.
Please check out 420 Investor Daily for more marijuana-related news and updates.