Two Canadian Cannabis Rush To Cater To Germany’s $252 Billion Market
This week, two major MMJ producers signed on to provide Canadian weed to 20,200 pharmacies in Germany.
The companies, Tilray and Cronos Group, will provide millions of dollars worth of Canadian cannabis to Germany. The European nation currently has the largest legal cannabis market in the world, with over 80 million people and federal insurance coverage for the drug.
Cronos Supplies Leaf Products
Cronos, an Ontario-based company, inked a 5-year exclusive distribution agreement with Pohl-Boskamp where its global subsidiaries will provide an estimated 12,000 pharmacies throughout Germany with its Peace Naturals cannabis products. Through the agreement, Cronos can leverage the wide distribution network of Pol-Boskamp and enjoy unparalleled access to the German market. Cronos starts shipping the MMJ this quarter.
“We are ecstatic to partner with Pohl-Boskamp, an established and reputable pharmaceutical leader. This partnership allows us to leverage an existing industry leading pharmaceutical distribution channel to immediately create the world’s largest medical cannabis distribution platform,” says Mike Gorenstein, Cronos CEO.
“Pohl has been a reliable partner for pharmacies for many years. Now we are excited to have Cronos as a partner and supplier of cannabis for the German market. With our new partner we are confident that we will provide reliable distribution of cannabis for German patients,” says Pohl-Boskamp CEO Marianne Boskamp.
Tilray Provides Extracts
On the other hand, BC-based Tilray just entered into agreement with leading German pharmaceutical NOWEDA together with service provider Paelsel + Lorei. “As the world’s second largest pharmaceutical market with a population of more than 80 million people, Germany is an important market for Tilray products,” says Tilray CEO Brendan Kennedy. “This is another strategic milestone for our company as we aim to increase access to medical cannabis around the world. We are proud to be the first supplier to offer full-spectrum extracts to German patients throughout the country.”
NOWEDA, a large co-op with 21 branches, is owned by 9,000 pharmacists and has a massive network of 16,000 pharmacies. This will give Tilray access to around 70% of the pharmacy market in Germany.
Tilray will be supplying two kinds of cannabis oil to the German market; both of which are full-spectrum extracts containing THC and CBD. This is an important milestone for the German MMJ market as it marks the very first time full-spectrum medical cannabis will be available in the country.
The first shipment of 3,000 25-ml bottles will hit pharmacy shelves in Germany by next week. The second order which is twice as much as the first, is already being arranged to cater to what they expect to be a large demand.
Lucrative Market
Cronos and Tilray came in at a good time. Just earlier this year, Germany officially became the world’s largest federally legal MMJ market. In Germany, all citizens are required to have health coverage through the statutory health insurance (SHI) system, and many firms already include medical cannabis in their plans. All of the 70-million insured citizens can legally shop for an insurance plan that covers MMJ.
Add to that the fact that Germany is the 2nd biggest health insurance market in the world, worth $252 billion coupled with the fact that Germany won’t be able to grow enough cannabis to cover the needs of the people, and you’ve got the most lucrative MMJ market. An application process is currently open with the hopes of selecting 10 local licensed products tasked with growing 200 kg of cannabis from 2019 through 2022. Till then, Germany will be relying on imports and Canadian applications are growing. Other Canadian players in Germany include CanniMed, Harvest One Cannabis, and the Maricann Group.
Just last month, Alberta-based Aurora Cannabis shipped 50kg of MMJ to Pedanios in Berlin, a German subsidiary of the company that distributes to over 1,500 pharmacies across the nation. The shipment was needed to cover “a significant shortage of supply.”
“We’re cautiously optimistic about the potential size of the market,” Kennedy says. “In every country besides Canada, Tilray products are available in pharmacies. That shows the acceptance by doctors and pharmacists of those products as medicine globally.”
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