By: Max Monahan-Ellison
AS hype and excitement builds around the potential for recreational cannabis legalization in some European countries, it’s an opportune time to share learnings from Canadian recreational legalization and argue that the medical market should remain a priority for companies.
When recreational cannabis was legalized in Canada, firms shifted substantial amounts of cash and higher-quality product away from the medical access stream to promote and supply recreational brands in an attempt to gain market share.
In the years that followed, there was limited investment in quality education, marketing, and research in medical cannabis. In a post-rec legalization market plagued by pressure for quick ROI, a medical brand strategy that requires patience, expertise, investment, and long-term vision was a challenge to sell into larger firms.
This is despite medical patients indicating far higher spending, less dependence on legacy/illicit markets, and a greater likelihood to stick with products that work and brands that they trust than rec users.
Little industry investment, and a lack of differentiation between recreational and medical brands and access programs coupled with a laser focus by the federal government on reducing misuse led to little growth in medical patient registrations.
Patient Numbers Stagnant Since 2018
Health Canada’s Canadian Cannabis Survey (CCS) reports around four to five million Canadians indicated using cannabis for medical purposes in the past year, but there are only around 400,000 medical registrations in the country, pretty much stagnant since 2018.
But in Europe it is an entirely different story. As hype builds around potential for recreational legalization in markets like Switzerland, the medical market is still a sustainable and massive opportunity for continued investment.
In the Canadian context, medical cannabis was first legalized through court challenges, not as a legislative priority. Unlike in Canada, I expect the European medical pathway will continue to evolve and expand as governments are looking to balance pressure for access with the rescheduling of certain cannabis products in international drug policy. What’s more, there are already key indicators of a more robust potential medical market in Europe.
For example, pharmacy dispensing lends legitimacy to medical cannabis to treatment naïve patients, as the pathway to access is similar to other medications.
Cost Is Barrier To Entry
While dispensing in the pharmacy is not widely available in Canada, multiple European markets involve pharmacies and pharmacists in their access programs (Germany, UK, Netherlands for example).
Most importantly, insurance coverage is far more plentiful in some European markets and a huge opportunity for medical brands.
Cost was one of the biggest barriers identified by Canadian patients in the 2020 Medical Cannabis Patient Survey, and the CCS estimates only around 6% of patients have full coverage in Canada. Meanwhile in Germany, estimates range but over half of patients have benefits coverage.
My advice to firms? Double down on medical in Europe. The market is still in its infancy, and to avoid the challenges we saw in the Canadian context and foster opportunities for growth, both R&D and lobbying dollars need to stay focused in this area.
Max Monahan-Ellison is a strategist specializing in health & emerging therapeutics, Co-founding Partner of medical cannabis and emerging therapeutics consulting firm, eCB Consulting Inc., and Board Chair of Medical Cannabis Canada, a patient support and advocacy non-profit.