Prohibition Partners predicts the German Medical Marijuana market will be worth €7.7 billion by 2028. Find out why Deutschland could be a pillar in the global medical marijuana market.
Historically, (that is, over the past few years), the conversation about cannabis legislation has centered predominantly around North America, and more specifically around the U.S. and Canada.
To date, the United States has legalized medical marijuana in 33 states, and Canada has legalized it federally along with recreational cannabis sales and consumption. With a combined population of roughly 365 million people, it's only natural that people keep a close eye on the U.S. and Canada as a litmus test for what cannabis legalization will look like.
However, as the dust settles from the Green Rush, and people are able to more soberly examine the marijuana industry at large, many more players are looking poised to make a splash in the medical marijuana space. In particular, one often-overlooked country when it comes to medical cannabis is Germany.
Germany is famous for many things, including bread, beers, and Berlin just to name a few, though it may soon also be famous for cannabis.
Germany's Medical Marijuana Market
When it comes to drugs and drug use, Germany has always been ahead of the curve. In as early as 1994, Germany's Federal Court ruled that the consumption of a small amount of any drug would effectively be decriminalized, in that police wouldn't prosecute offenders unless there was an instance of public consumption or use in front of minors.
Around that time, the cannabis medicine Dronabinol was rescheduled from annex I to annex II of the Narcotics Law which helped to remove barriers to research, eventually resulting in the product becoming available by prescription.
Though it wasn't until May 4th in 2016 that Germany more comprehensively approved the use of cannabis for seriously ill patients who have consulted with a doctor and "have no therapeutic alternative."
Once the legislation was approved, by 2017 the seriously ill could obtain cannabis with a doctor's prescription.
But why does Germany hold so much potential when it comes to pot?
Well, first and foremost, Germany has the largest economy in Europe, with a population more than twice the size of Canada's. Then, factor in that over 90% of the German population is covered by healthcare, and you've got the perfect breeding ground for a robust medical marijuana industry.
As of June 2019, over 60,000 people were registered as users of medical cannabis in Germany, with a total of 95,000 prescriptions being made. Additionally, thanks to the prevalence of health insurance in the country, 60% of medical cannabis prescriptions were reimbursed by insurance companies, reducing the financial burden for those seeking out cannabis medicines.
These reimbursements also serve as an indicator for the growth in the sector, as Marijuana Business Daily reported that the second quarter of 2019 saw quarter-over-quarter and year-over-year growth in reimbursement figures of 20% and 74%, respectively.
In total, cannabis reimbursements in the third quarter of 2019 were roughly 62% higher than the same period in 2018, with the year's reimbursements estimated to be over 120 million euros.
Similarly, the demand for cannabis imports has more than doubled, from three metric tonnes in 2018 to over 6.7 tonnes in 2019.
Evidently, Germany is experiencing strong growth in its medicinal cannabis sector and has the potential to grow even further in the coming years. The medical marijuana market in Germany is definitely one to keep an eye on.
Could This ASX-Listed Pot Stock Dominate The German Market?
As far as cannabis companies involved in the German market go, there's one ASX-listed cannabis company that may be sitting in the perfect position to capitalize on the German medical marijuana market. That company is none other than Althea Group Holdings (ASX:AGH)
As we covered in our recent Quarterly review for ASX-listed pot stocks, as well as in our recent interview with Althea's CEO, Josh Fegan, Althea is seeing strong growth in its monthly prescription numbers as well as in the number of healthcare professionals prescribing their cannabinoid medicines.
With a proven track record and over $15 million in the bank, Althea is in a strong position for its upcoming entrance to the German market.
The ASX-listed medicinal cannabis company recently announced the signing of a three-year supply and distribution agreement with wholesaler Nimbus Health. Nimbus currently has a market share of roughly 25% of the German medicinal cannabis market, and the agreement will see that Nimbus sells and distributes Althea's products throughout Germany in the latter half of the year.
As part of the agreement, Althea will receive payment for products supplied to Nimbus, in addition to 50% of the net profit on sales.
Additionally, in order to help accelerate the sales of Althea's products through Nimbus, the ASX-listed pharmaceutical company will also be creating a German version of its online app 'Concierge,' which will help remove informational barriers for both patients and healthcare professionals alike.
Soon, we may see Althea ride the wave of growth experienced by Germany and embed itself as a key cannabis player within Europe, in addition to the traction the company is seeing in Australia and more recently in Canada with the company's peak processing facility.
To learn more about Althea, visit the company HQ here.
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