Shakeups In The German Cannabis Market

81


As Germany begins to enter a summer where life seems ever more normal, there are fairly major shakeups underway in the German cannabis market. These are structural but will have a profound impact on the entire market going forward.

A Mass Of Distribution Licenses
It is an interesting metric to understand that before 2015, there were no specialty cannabis importer/distributors in Germany. As of July 2020, there are rumors that this number has now shot to close to 80 (either licensed or in the process to become licensed). That is a huge number. So was the last amazing number (40) as of the beginning of this year. Just the previous estimate would mean, literally, 1 specialty cannabis distributor for every 2 million Germans. That obviously is not sustainable. What it does indicate is the huge surge of interest in medical cannabis not to mention acceptance, as well as the amount of money actually now beginning to slosh around in the domestic market.

And that spells good news for both patients and insurers. The rest of the industry, however, will be under further pressure to reduce cultivation and operation costs to meet the challenge.How many of these distributors will survive is another question, particularly in an environment where the government is looking for just one to fulfil the needs of all of Germany’s pharmacies from what is grown domestically. This does not of course mean the end of specialty distribution. Indeed, far from it. There is not enough cannabis entering the market, presumably this fall, that is grown here to even come close to meeting demand.

No surprises here. This has been one of the enduring criticisms of the entire process, if not the bid itself since 2017.

However, one thing this does mean is that distribution fees, like pharmacy fees for processing the plant before them, are finally hitting a price adjustment phase.

This is also going to be good not only for patients, but also health insurers.

For all the standardization of the industry, including fees and mark-ups, one of the strangest things about the German cannabis market is how widely cannabis prices can differ even between pharmacies. This is as true of flower as it is of dronabinol.

The Wholesale Price Of Medical Cannabis Is Dropping
Again, no surprise here, the government will end up buying more cannabis than contracted for under the original bid. This was actually anticipated in the language of the contract that currently exists between the government and the three bid winners. Namely, an automatic 50% reduction in price is mandated for any cannabis sold beyond the 120% agreed upon qualities.

german flag
Photo: Ian McWilliams, Flickr

The growers domestically, in other words, who won the bid will be under a severe price restriction. This may have been the ultimate strategy of the government to begin with (namely to attract foreign capital and expertise but then begin to reign in the sky-high prices of medical cannabis so far.)

This means that the price of €2.30 a gram will undoubtedly fall. Where it will float is anyone’s guess, but right now it appears on course to hit about €1.87. Or about the same price that other governments across Europe (notably Italy) had previously negotiated with the big Canadian cannabis companies (notably on this one, Aurora’s military contract in Italy).

Implications For The Import Market
With domestic producers under the gun, this also means that all imports will begin to feel the price squeeze too. And that will also have a significant impact on point of sale cannabis prices.

And that spells good news for both patients and insurers. The rest of the industry, however, will be under further pressure to reduce cultivation and operation costs to meet the challenge.



Source link

22 COMMENTS

  1. There are some fascinating deadlines on this article however I don抰 know if I see all of them heart to heart. There is some validity however I’ll take hold opinion until I look into it further. Good article , thanks and we wish extra! Added to FeedBurner as effectively

  2. After research a couple of of the blog posts in your website now, and I really like your means of blogging. I bookmarked it to my bookmark web site listing and will likely be checking again soon. Pls take a look at my website online as effectively and let me know what you think.

  3. Once I initially commented I clicked the -Notify me when new comments are added- checkbox and now every time a remark is added I get four emails with the identical comment. Is there any method you possibly can remove me from that service? Thanks!

  4. Can I just say what a aid to search out someone who truly knows what theyre speaking about on the internet. You positively know easy methods to carry a problem to mild and make it important. More folks have to read this and perceive this aspect of the story. I cant consider youre no more common since you positively have the gift.

  5. A formidable share, I just given this onto a colleague who was doing a little bit analysis on this. And he actually purchased me breakfast as a result of I found it for him.. smile. So let me reword that: Thnx for the treat! But yeah Thnkx for spending the time to discuss this, I feel strongly about it and love reading extra on this topic. If potential, as you change into experience, would you thoughts updating your weblog with more details? It is highly helpful for me. Massive thumb up for this blog post!

  6. Oh my goodness! an incredible article dude. Thank you Nonetheless I am experiencing challenge with ur rss . Don抰 know why Unable to subscribe to it. Is there anybody getting equivalent rss downside? Anyone who knows kindly respond. Thnkx

  7. Aw, this was a really nice post. In concept I wish to put in writing like this additionally ?taking time and actual effort to make an excellent article?but what can I say?I procrastinate alot and on no account seem to get one thing done.

  8. Aw, this was a really nice post. In concept I would like to put in writing like this moreover ?taking time and actual effort to make a very good article?but what can I say?I procrastinate alot and by no means seem to get something done.

  9. That is the best blog for anybody who needs to seek out out about this topic. You understand so much its nearly hard to argue with you (not that I actually would need匟aHa). You positively put a brand new spin on a topic thats been written about for years. Nice stuff, simply great!

  10. I discovered your weblog site on google and examine just a few of your early posts. Proceed to keep up the superb operate. I simply further up your RSS feed to my MSN News Reader. Looking for ahead to studying more from you in a while!?

  11. I wish to express thanks to this writer for rescuing me from such a situation. Just after surfing around throughout the world wide web and obtaining proposals which are not powerful, I believed my life was over. Being alive without the presence of answers to the difficulties you have resolved as a result of your entire blog post is a critical case, as well as the kind which might have adversely damaged my entire career if I had not encountered your site. Your main understanding and kindness in playing with all the stuff was helpful. I am not sure what I would’ve done if I hadn’t come upon such a thing like this. I can at this moment look ahead to my future. Thanks a lot so much for the expert and sensible guide. I won’t be reluctant to endorse your web site to anyone who would like support on this matter.

  12. I actually wanted to send a small message so as to appreciate you for all the marvelous facts you are giving on this site. My considerable internet research has finally been compensated with useful details to talk about with my relatives. I would repeat that we website visitors are unequivocally endowed to exist in a useful place with so many wonderful professionals with very beneficial tips and hints. I feel extremely privileged to have come across the web site and look forward to so many more entertaining moments reading here. Thanks once again for everything.

  13. I wish to show appreciation to you for rescuing me from this type of trouble. Because of checking throughout the the web and meeting principles which were not powerful, I assumed my entire life was gone. Being alive without the presence of approaches to the problems you have solved through your main article content is a serious case, and ones which may have badly damaged my entire career if I hadn’t discovered your web site. Your good training and kindness in playing with a lot of things was crucial. I’m not sure what I would have done if I hadn’t come upon such a step like this. I am able to at this moment look ahead to my future. Thanks very much for your impressive and effective guide. I will not think twice to propose your web sites to any person who needs tips about this problem.

  14. Needed to post you the very small word to help say thanks as before for those striking basics you’ve featured at this time. It has been quite pretty generous with you in giving easily just what most of us would have made available as an ebook to help make some cash for themselves, chiefly given that you might well have tried it if you wanted. Those solutions also acted to become fantastic way to know that other people have similar passion much like mine to understand more and more in regard to this matter. I know there are many more fun opportunities in the future for people who examine your blog.

LEAVE A REPLY

Please enter your comment!
Please enter your name here