GERMANY is continuing to see cannabis companies from across the globe pile into its medical cannabis market in the hopes of securing their piece of the pie.
With limited domestic production capacity and by far the largest medical cannabis patient demographic in Europe, imports to the country have almost doubled every year since the inception of the market in 2017, according to the latest figures from Prohibition Partners European Cannabis Report: 7th Edition.
The promise of a potential adult-use market within the next few years has exacerbated the scramble for companies to establish a foothold in the medical market, enabling them to have a headstart when it eventually arrives.
Despite this rapid influx of investment and product, German medical cannabis telemedicine operator Nowomed says that supply has now outgrown demand, and product saturation is putting some doctors off prescribing.
The German Market
The German medical cannabis market is continuing to grow steadily, seeing a 43% increase in sales of cannabis to pharmacies last year.
According to data from cannabis-aerzte.de, there are now around 138 strains of medical cannabis available in the country, close to three times the amount available in 2019.
This dramatic influx of product was laid bare in September 2021, when the Health Ministry of Germany released data on the imports of medical cannabis per country.
The data showed that throughout the course of H1 2021, 18 countries are recorded as having exported medical cannabis to Germany.
Prohibition Partners Industry Analyst Conor O’Brien told BusinessCann: “Demand for medical cannabis in Germany is now being met with ample supply from cultivators in at least 18 different countries and this list is growing. If you go by flower strain names, there are over 100 available in Germany now.”
Exports to the country topped 20,566kg in total throughout 2021, including 5678kg in Q4, the highest quarter on record.
However, there is a growing discrepancy between the amount of cannabis that is imported, and the amount that makes it to pharmacy shelves.
Data released this year by the German Parliament shows that for 2021 just 9001kg made it to pharmacy shelves, less than half of the amount that was imported.
It is understood that a significant portion of the imported flower stock reaches its shelf life before it can be sold to pharmacies and make it into patients hands, while other stock is re-exported.
Florian Wesemann, Medical Director at young German medical cannabis ‘digital therapy platform’ Nowomed says that the level of supply has gotten ‘crazy’.
“Currently, there are so many new flowers and extracts coming every month, it’s crazy. I have way too many options, more options for prescriptions than I actually need.”
He explained that part of the issue was the lack of data accompanying many of these new products, due both to their short time on the market and often poor labelling.
“It’s very, very different what kind of information producers actually give about their produce. They have to give a THC and CBD amount, but what about the terpenes or secondary flower ingredients? Some of them have nice tables of information, some of them very limited information.”
Although many producers are reportedly visiting clinics in the region and ‘showing how their products work’, German doctors ‘take a long time to prescribe them’ due to this lack of data.
Impact on Industry
Despite being by far the largest medical cannabis market in Europe, Mr Wesemann suggested that it was still a ‘very, very small niche within the medicinal market’ relatively speaking.
He added that just ‘1% or 2% of German doctors’ currently prescribe cannabis.
A key part of this is reportedly undereducation, as cannabis is still not part of the mainstream medical curriculum, an issue Nowomed is trying to combat.
“They don’t have the information, especially for extracts where they need a titration plan for the patient. This is something that is not that easy to combine in your regular clinic because it just takes a lot of time.
“Even the doctors who are positive about cannabis treatments say ‘I don’t know how to prescribe this’ and send patients to Nowomed.”
According to Mr Wesemann, the overabundance of possible products to prescribe is adding to this issue, ‘confusing doctors on where to start’, particularly those working for public practices with less time to learn.
Mr O’Brien added that alongside imports, there was now ‘domestic supply from two or three government contractors currently being supplied to pharmacies at a very competitive €4.30 per gram’, applying major downward pressure on prices, which have historically stood at around €20 per gram.
“A direct benefit for patients is the increased number of strains of flower and oil available, meaning they can experiment with their doctors and find the optimal product for them.
“For operators in the sector, competition now will have a direct negative impact on margins due to decreasing prices.
“Producers and suppliers will have to invest time and effort to convince doctors, pharmacies and patients to choose their particular strains, a task made harder considering the legal limits on marketing cannabis in Germany.
“The data is clear that overall demand for medical cannabis is growing and the adult-use market is not so far away, this could justify the presence of a wide range of products being on the market even if they are not immediately profitable if operators are confident they can bide time and capture a portion of the market as it grows.”