Tag: Germany

With the world in lockdown and the race for “The Vaccine” if not “The Cure” what does this bode for cannabis pricing and availability in Europe, and specifically Germany?

For now, pharmacies are absolutely in lockdown, preventive medicine mode.

But there is hope on the horizon. A new tender bid for a domestic distributor for cannabis grown in Germany has now been issued by BfArM (the German FDA). To be considered, applications must be filed electronically by April 28.

This distribution contract will run from September 2020 for several years (until 2025).

BfArM will still technically “own” the cannabis, although distributors must pick up the product at the three locations in Germany where this is grown and deliver it to pharmacies as well as store it if necessary.

The winning distributor, who must have experience in narcotics distribution, although not necessarily cannabis, will be required to have experience, insurance, and the ability to prove their track record with good distribution practices. 

The agency believes that the floss will be bundled in 50-gram containers, which the distributor will then deliver to the pharmacies.

What Will Happen To Pricing?

BfArM has set pricing at €2.3 euros a gram. With a mark-up for administrative management costs at BFArM, plus a distributor mark-up, the total price to pharmacies is expected to beat the current price they are paying (about €10 per gram). By law, pharmacies are required to mark up everything by statute, although what this overhead will be is in discussion between insurers and pharmacies right now.

The good news, however, is that for the first time since the cultivation bid was offered, pharmacies will be able to sell the drug at a price considerably less than the current prices. And this is good for everyone.

What About Imports?

There is a lot of discussion about the pricing of imports right now. Clearly, the price to beat is German domestically produced cannabis. However, everyone also knows there is not enough being grown in the country. How much insurers (to start with) will be tolerant of large deviations from the price of domestically produced cannabis is unknown. However, this development alone begins to shed light on a price band for imports that is clearly developing.

Be sure to attend the International Cannabis Business Conference in Berlin this summer for more developments on the German cannabis market.

According to the latest figures from the statutory health insurers, there are now five different kinds of cannabinoids being dispensed and covered in Germany.

What are the trends, and where is this going in 2020?

Unprocessed Flower Is Still A Big Deal – The dispensation of unprocessed flower has steadily increased at German pharmacies for the last year. Between January and December, insurers increased their payments from €3.7 million euros to €5.5 million euros, an increase of just over 48%. That is good news for the raw flower market.

Cannabinoid Preparations Are Also Increasing – Cannabinoid preparations, which have now been reclassified into three different categories (cannabinoid preparations, flower used in preparations and full-spectrum extracts) have also increased from €2.9 million at the beginning of the year to €5.6 at the end of 2019 (a 93% increase).

Pharmaceutical Cannabinoids Hold Steady – Interestingly, finished pharmaceutical products increased the least in the last year (from €1.4 million at the beginning of January to €1.8 million by December). This is only a 28% increase, suggesting that patients are requesting, and insurers are covering, floss and floss based preparations at the pharmacy.

Trends For 2020

Overall reimbursements for cannabis as medicine are also increasing. In sum €123 million worth of cannabis was reimbursed in 2019, an uptick of 67% over the €74 million worth of cannabinoids that was reimbursed in 2018. 

That said, overall prescriptions did not increase in the same proportion – namely there was a 44% increase in the number of prescriptions processed year over year between 2018 and 2019 (267,348 over 185,370). This appears to indicate that doctors are writing prescriptions for larger quantities of cannabis, not necessarily that there are more patients.

All of this data is also based only on statutory health insurers (public healthcare). Data from private insurers is still not included.

The other issue in the room and in a big way, is that many early adopter patients have given up on legitimate prescriptions due to the hassle, if not fights with their insurers. This population, which is also largely untracked for obvious reasons, is either growing their own again, or obtaining it from the black market. In many parts of Europe, however, due to border closures caused by the Covid-19 epidemic, the difficulty of obtaining the drug in the first place may yet encourage many patients to go back into the legal system again or to look again, for a prescribing doctor.

Be sure to attend the International Cannabis Business Conference in Berlin this summer to understand the latest trends on the ground in the largest cannabis importing market.

There has been a growing awareness, including among policymakers, that something is not working with the current German cannabis laws and that starts with understanding who is doing what. With a lack of clarity around all private patients, the numbers being reported are those who have made it through the “statutory” health system to approvals. This kind of insurance covers the vast amount of Germans (90%).

However private patients are in another kettle of fish. They may have an easier time finding doctors willing to prescribe, but the prices they face at the pharmacy are eye-watering. This is one of the biggest problems the German government itself now faces. Estimating the amount needed accurately, while trying to get a grip on what is legit and what is not coming in over the border.

With a relaxation of CBD rules now in the offing, this puts another wrinkle into the game. Drug interdiction in such an environment – and determining which is legit and which is not – is becoming even more of a losing game. Does any policeman want to arrest a patient for CBD flower?

Upping Domestic Production

The country is now in the grips of an extended leadership discussion that has been going on for several years. Issues across the map, including cannabis reform, are catching the traditional party unawares. There are many reasons that Germans want to see cannabis cultivation expanded here – including of course capitalizing on a national theme – namely exports. But there are many other compelling reasons slowing the industry down. Acceptance is one thing. Finding a way to bring this unwieldy, strange plant, into regulated rules is another.

That said, with a clarification on at least CBD, there is another subtext in the room. If hemp as a plant is not “novel,” much less cannabinoids extracted from the same, what does this mean about the THC discussion? Especially as medicine and already in the room?

These are all issues now on the table as the country faces the reality that medical cannabis works, and for a range of conditions. But who should get priority? Who should pay for it? And is there actually enough certified product to even go around now?

All of these questions from a policy perspective are in the air right now, as Germany again faces a leadership challenge within the CDU, and political alliances are again shifting. Cannabis and legalization policies are very much in the front and center of German life. And likely to be so for the foreseeable future.

Be sure to attend the International Cannabis Business Conference in Berlin – now moved to new summer dates for the latest and greatest updates on an industry that is finally starting to come into its own.

With the news that the German government has woken up to biology and declared that CBD is not necessarily a novel food (big victory for the European Industrial Hemp Association if not a high five of success), the market is certainly changing.

If 2018 was the year of the CBD cannabuzz and last year the Anti Hempire Strikes Back (all over Europe), this new decision by the German government will finally begin to clarify things.

In reality, this discussion is about two issues – the source of the plant and how cannabinoids are extracted. If the plant genus is from Europe and regulated extraction processes are followed (as in EU Bio), the entire conversation shifts.

However what it also does, as is clearly the case, is beginning to open the decks for investment capital now hungrily looking again at cannabis options (see the big raise this week in the UK). With the British about to go the same route as the Germans, this means, for the first time, there will be a regulated path for CBD products across the continent. Expect other governments to follow suit.

What Does This Mean For The German Hemp Industry?

This is unbelievably good news for a German-based hemp market that has struggled for respect. First, the medical market blew it away with all the attention and the money. Then governments stepped in. With the dust clearing on the ground on the CBD discussion at least when it comes to novel food, the next step will be what regulatory mandate does this industry fall under?

And there the path is very clear. 

As a result, German hemp farmers will finally be allowed to go into more or less unrestricted business, although don’t expect fast steps. With the German Federal Office of Consumer Protection and Food Safety (BVL) facing off vs the Federal Ministry of Food and Agriculture (BMEL) don’t expect overnight change. There are lots of big discussions right now about disagreeing German departments when it comes to cannabis. Welcome to the club.

However, in the shorter term, this is good news overall for the industry. There are many hurdles to overcome yet, but in sum? The clouds appear to be clearing a bit on the cannabis storm auf Deutschland.

Make sure you book your tickets for the now rescheduled summer International Cannabis Business Conference! Hemp and CBD policies, as well as regulatory oversight of the industry, is a big topic this year.

For soccer fans, BVB Dortmund needs no introduction. In fact, it is the world-famous sports team that has kept this former Rühr Valley industrial powerhouse on the team as the region is slowly turned into an academic and research hub.

But the city has also had another reputation for some time – namely one where drugs and crime, particularly in a place near the north of town (Nordstadt or Borsigplatz) had blighted large areas of an otherwise quaint, reinventing German town.

That might be changing. There is a renewed focus this spring by several political parties to make medical marijuana an “issue.” Especially as there are now 100 legitimate patients, with a potential for 6,000 more. Both Die Linke and Pirate political parties have now taken up the challenge with local authorities, demanding both cultivation of medical cannabis within the city as well as the establishment of a local cannabis club for the distribution of the same.

Authorities seem mildly interested in the same – but it is clear that such proposals are increasing all over the country.

Dortmund, like many German rust belt towns, is going to be an interesting place to watch for cannabis activism going forward. Particularly as those proposals intersect with both economic redevelopment that is actively going on in such places, directed by the German government and academic, tech or insurance hotspots.

With similar campaigns also going on in nearby Bremen, as well as cities and towns across the country, look for this issue to become an ever more fervent one.

The topic of medical cannabis has caught fire in Germany and most people who are seriously in need know the current situation is unworkable for most parties.

As the first crops grown in Germany come to the market this year, look for more calls for local, German production, as opposed to that financed or grown by outsiders – and for everything to do with matters from quality to price.

As much as the government has tried to slow down the tide, the movement for increased access to the plant will not be stopped and is showing up in places where pain, of both a physical and economic kind, has been in the room for decades now.

That is a potent mix, and 2020 promises to be another potent year for the industry – and at all levels. 

Be sure to book your tickets now for the top cannabis industry festival in Europe this spring – the International Cannabis Business Conference in Barcelona, Berlin, and Bern!

The German government has just announced that it will buy at least 650 kilograms (1,433 pounds) of GMP certified, medical cannabis flower from “domestic producers” who won the tender lots. This means, in other words, that of the three Canadian companies who won the bid (Aurora, Aphria and Wayland/ICC/Demecan), the only domestic production that currently takes place is via the ICC facility in Eastern Germany.

This means that at least the short term winner, certainly on the price front, is ICC and Demecan.

Why?

It is the only one of the three that has certified production facilities in place. The other two producers, Aphria and Aurora, must import from somewhere else. 

However, this announcement makes things even more strategically interesting, as Aurora announced a much lower price to the Italian government – canceled bid nonetheless (that was for medical-grade CBD).

That alone undermines the price now set out by the German government – of €2.30 euros a gram wholesale – as the one to beat in Europe.

This also means that enterprising producers elsewhere now have a reference price to beat (and many of them can). Even with the price of transportation, this price is a calling card for those of Portuguese, Spanish, Greek and Polish extraction who have either entered or about to enter the game.

It also puts the decision to delay the export of North Macedonian flower in an even more interesting new light. No matter when the country decides to export, it has a world of opportunities on its immediate, European, if not German, doorstep.

With this number on the table, enterprising distributors now also have not only benchmarks for the first time, but an insight into the market that so far has only been acquired before by personal interviews of insiders on the ground.

Bottom line? The market is opening for low cost, imported flowers, and oil that can beat that price.

Combined with a reduction in the required mark-up imposed by German pharmacies this means that the retail cost of cannabis in Germany is in line for another fairly dramatic correction at point of sale, and while it may not quite yet beat the unregulated market, this means that cannabis priced certainly under €15 a gram will be available soon.

It also means that the high cost put on bringing in a new premium-priced product is finally beginning to normalize (although expect to see additional drops in price as rules continue to change around Europe). If nothing else, both Italian and Polish crops will further undermine the German reference price, to say nothing of the winds now blowing if not growing in Portugal, Spain, Greece, and other lower labour climes throughout Europe.

However, no matter the ultimate winners in the market from the business side, it also means that patients are beginning to have alternatives to either out-of-sight priced product only affordable with insurance coverage or the black market.