In the Cannabis industry, Canadian companies have artfully crafted a medicinal cannabis framework that, while not yet a masterpiece, is inspiring many other countries, including Germany’s medicinal cannabis market.

In its struggle to find an appeasing solution to regulatory dilemmas, Germany is looking to Canada to supply and instruct its budding medicinal market.

The progression of Germany’s medicinal cannabis market

Germany has been slow to adopt its medicinal framework, opting to observe worldly advancement on the subject, which has left many doors open for foreign countries to aid its progress. In the past, Germany has demonstrated a fairly lenient policy to possession of cannabis in small amounts, and under German law the consumption of substances is not necessarily illegal. Dating back to 2008, a select group of patients in Germany were treated with medicinal cannabis for illness and the country would go about attempting to construct a regulatory framework over the next decade.

Recent years have seen the most progress as in January 2017, Germany legalized cannabis for medicinal purposes under regulations from its Federal Institute for Drugs and Medical Devices (also known as BfArM). Patients who applied for specific exemptions under the BfArM restrictions could be granted access to cannabis for medicinal purposes if they demonstrated significant suffering from certain diseases like multiple sclerosis, cancer or chronic pain.

These restrictions eased in 2017 when BfArM permitted patients access to cannabis from a pharmacy pending a doctor’s approval. Demand continued to grow and when supply shortages arose, BfArM proposed a tender process for the procurement of cannabis in which companies could put forth bids to sell cannabis plants to BfArM who would then sell them to pharmacies.

The tender process was stalled in Germany regional court in March 2018 as the Dusseldorf region argued the timeline given to German companies was too short to sensibly supply local product. As a result, market opportunities arose for cannabis exports from foreign countries and Canada quickly seized the favorable opening to become a dominate player in the supply chain.

The tender process is currently in the process of being entirely redefined as government officials try to work out a fair agreement to local suppliers. While it will only be a matter of time before that tender process is reestablished, Canadian suppliers are ideally placed to capitalize on Germany’s medicinal cannabis market.

The perception of medicinal cannabis in Germany

As restrictions on patient access to medicinal cannabis ease and accounts of positive health improvements on patients using cannabis for illness become more visible publically, the general outlook on cannabis is shifting. In the media and across public information platforms, cannabis is becoming more commonly labelled as a medication. The more cannabis is paired with pain relief providers and healthcare approved sanctions, the more stigma is being transformed from substance to treatment.

“Attitudes in Germany for medicinal cannabis are slowly changing based on anecdotal information that is reported in the media, where children’s lives are changed and the face of cannabis isn’t people looking to get high, but people looking for relief from chronic malaise,” said Ben Ward, CEO of Wayland Group (CSE:WAYL,FWB:75M,OTCQB:MRRCF), the only licensed producer in the world with a facility in Germany.

The costs of dried cannabis flower and cannabis extracts are covered by health insurance for patients who have no other treatment options. To date, only 62 percent of patients have qualified for full health insurance reimbursement.

This weakness in the system shows the need for a framework and it also proves that patients are wanting cannabis approved in a way that grants them easier access. This is within a growing patient population which now hosts over 16,000 people, up from approximately 800 in January 2017. The rhetoric in Germany is the same as it is in Canada – cannabis is helping those with debilitating illnesses to lead a more bearable, functional lifestyle.

Germany’s medicinal cannabis market size

According to Statistics Canada, Canadian licensed producers (LPs) exported a total of 520.855 kilograms of dried cannabis and 183 liters of cannabis oil to Germany for medicinal purposes in 2017.

While significant, the level of imports from Canada still faced shortages, which indicates demand is outweighing supply and many Canadian companies already have pieces on the chess board.

Of the 10 licenses applicable for distribution capabilities to BfArM, several are already being sought by large-scale Canadian companies. Alongside Wayland Group, Canopy Growth, Aurora Cannabis (TSX:ACB,OTCQB:ACBFF) and Aphria (TSX:APH,OTCMKTS:APHQF) are among the top contenders shortlisted for licenses.

In addition, Tilray (NASDAQ:TLRY) and Cronos Group (NASDAQ:CRON,TSXV:CRON) are known to be exporting cannabis to Germany and may also be up for license consideration. These companies have already placed a foot firmly in Germany’s medicinal cannabis market and as demand grows, Canadian facilities are growing, advancing and enhancing capabilities each day.

Why entering the European market is the right move

The Western European nation’s large aging population is covered by socialized medical insurance, pushing Germany’s medicinal cannabis market to values as high as €10.2 billion per year. The numbers and demand are there, but the German medicinal cannabis market has experienced a plethora of challenges which, coincidentally, have placed Canada on the ideal side of circumstance.

Canadian companies can benefit from being established in European markets due to the system in Germany being flawed and while the tender process remains on hold, supply demand grows and a gap widens.

Additionally, the Canadian system of regulating, producing and distributing medicinal cannabis is wholly operational and inarguably fine-tuned. Germany trusts Canadian product to be thoroughly tested through quality-control measures that have been curated for years and are now operating with pristine precision.

Utilizing skills in an underdeveloped market and growing Canadian business with a like-minded system will only further widen Canada’s worldwide market presence and reputation. Furthermore, having a hand in European markets will help Canadian companies learn how the medicinal cannabis framework is accepted or rejected in other countries and then apply that knowledge to an expanding international strategy.

“The advantage of working in both North America and the European Markets is access to a greater population base of individuals enabling Canadian companies to grow our business with a similar understanding of medicine and business culture, with of course some nuances. Diversification to multiple sites also allows for centers of excellence to be established in different segments of the value chain,” said Ward.

Increased focus on different segments of the supply chain have allowed Wayland Group to build out quality control centers and cultivation centers of excellence, to reach all Canadian operations. Having developed a strong presence in both Canada and Germany, Wayland Group is primed to educate and mass produce high quality product approved by both the European medicines agency in Germany and good manufacturing practices enforced by Canada. As of September 2018, Wayland Group has made their first shipment of Mariplant CBD capsules to German pharmacies in Munich and Cologne.

Looking forward

In short, Canadian licensed producers are prepared. Canadian companies are leading the medicinal cannabis space and the country’s generous experience in the field means Canadians have the knowledge and skill set to operate in a foreign market and still be able to thrive. Getting ahead of the game in Germany’s medicinal cannabis market will only promise further success — worldwide growth in cannabis is calling and Canada has crafted its masterpiece and is ready to share it with the world. The time to inspire is now.

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