The European cannabis market is a much different beast than what has evolved across the pond in North America. If North America is about wild market predictions, high-risk investments, and murky regulation, Europe is the exact opposite.
The European markets are slow to launch, measured in their approach, and highly regulated. Germany, which RYAH reported on in 2019, remains the largest market on the continent but has continued its incredibly cautious approach since its inception in 2017.
Because Germany is the continent’s biggest and most promising market, it’s worth closer inspection. There have been small but significant changes to the medical cannabis space in the country over the last year. With several wholesalers and importers operating in the space, the many layers of regulation are better understood than before.
From the patient perspective to the import requirements, each level of medical cannabis distribution in the country is key to grasping the needs of the market. Once other European countries come online to launch their own national programs, the German medical cannabis model is likely to become the European standard. What works for Germany is expected to work elsewhere. Breaking into the German market could be a predictor of greater European success.
On the patient end of the equation, Germany treats cannabis as it treats other prescriptions. For the German patient, there are only slight differences between pharmaceuticals and cannabis when it comes to point of prescription and purchase.Unlike in the United States and Canada, the system funnels all patients through a prescribing physician and then a pharmacy. There is no secondary ‘cannabis doctor,’ no dispensary, and no budtender.
In another stark contrast to the US system, statutory health insurers in Germany must cover the cost of medical cannabis prescriptions so long as they meet specific criteria. Coverage kicks in as long as the patient is seriously ill and has exhausted all other treatments, and if cannabis is likely to treat the condition (or alleviate the symptoms) effectively.
Should the patient’s condition fall outside these parameters, or they are working through a private insurance company, the patient may also pay out of pocket under a private prescription. Patients still require a prescription and will still access the product through a pharmacy.
A medical cannabis prescription in Germany is for an exact product, down to the strain. In 2020, the range of cannabis products has grown substantially since the launch of the program in 2017. According to “Medical Cannabis in Europe: the Markets & Opportunities” an updated report by Marijuana Business Daily, there are now more than 30 strains available, plus THC- and CBD-isolated cannabinoid extracts, several full-spectrum extracts, plus a handful of finished pharmaceuticals (Sativex, as an example). Pharmacists are not allowed to adjust the prescription to new strains or products without a reissue of the original order.
Under this system, cannabis is treated, essentially, like any other medication. Access is restricted and all funneled through official channels. Physicians prescribe only when deemed absolutely necessary. But, as we argued in the 2019 analysis, this system is naturally safer for the patient treating a chronic condition. Patients receive accurate information from well-trained healthcare professionals, and the product is clean, regulated, and consistent.
The German market still relies entirely on cannabis imports to supply its program. With the first harvest of german products predicted for later in 2020, today the majority of medical cannabis comes from the Netherlands and Canada.
Cracking into the German market has proven challenging for many international sellers. Only a few, like Aurora in Canada and Demecan in the Netherlands, have thus far successfully entered into Germany.
Wholesalers seeking to export into Germany must first come from countries that abide by the 1961 Single Convention on Narcotic Drugs. Second, the wholesalers must observe both the Good Agricultural and Collection Practices (GACP) and Good Manufacturing Practice (GMP) quality standards. Third, international cannabis producers must meet the protocols of the German Pharmacopoeia (DAB) Monograph and the European Pharmacopoeia, both of which cover potency and contaminates.
One of the biggest changes to the German market last year was the new requirement that all imports be irradiated, a common practice for other consumable crops, which uses ionizing radiation to kill microbial or other living contaminates. This new requirement temporarily halted imports from some producers as they scrambled to receive their AMRadV license. To date, all wholesalers have now received this license and have resumed imports to Germany.
On top of the requirements for producers, cultivators must also work with an approved importer. Reports indicate that the number of importers has skyrocketed over the last year. Licensed cannabis importers in Germany must seek the standard scope of licenses as a traditional importer but also obtain a pharmaceutical wholesaler license (regional level) and a license for detailing with the narcotics (federal level). With the increasing number of approved wholesalers, at least this regulatory hurdle seems to have gotten easier.
Germany is the largest market in Europe, making up more than 75 percent of the continent’s sector. Many other countries in Europe remain stalled or non-existent, so Germany continues to serve as a crucial entry point.
With the multi-layered and lengthy licensing process, the German market naturally restricts the playing field to those adhering to strict GMP protocols. In North American, even legal producers are well behind the eightball on achieving GMP certification. If brands, products, and technologies can successfully make it in Germany, likely they will find success elsewhere as the other markets evolve.
With this in mind, RYAH announced a multi-country strategic distribution arrangement with Northern Green Canada in April 2020. Northern Green is the first private, licensed producer of cannabis in Canada to achieve EU GMP certification. This is a highly complementary partnership combining plant-based medicine and RYAH Dry-Herb Inhaler and data analytics platform in German-speaking countries. Sofiya Kleshchuk, Client Relations at Ryah Medtech, confirms, “Germany is a major market that has a lot of impact in the region, and we think RYAH is a great fit for its model and priorities.”
The RYAH clinical grade dry-herb Inhaler is ideal for a pharmaceutical approach to medical cannabis. Kleshchuk explains, that “Distributing sealed disposable cartridges through pharmacies looks like a perfect solution for the concept of treating cannabis like any other medication, while dose and temperature control that RYAH provides is essential for the patient’s safety and comfort.” Importantly, she details how “Germany favors medicating with dry herb, and that’s exactly where our strengths are. Entering German market is a huge milestone for RYAH.”
As many analysts expect other countries in the EU to adopt the German model in the years to come, lessons learned in Germany will become exponentially more valuable as the EU medical cannabis market grows.
The German model is a markedly different approach to the American or even the Canadian medical cannabis programs. Importantly, it is the first successful national program to treat cannabis on the same level as other pharmaceuticals. For medical cannabis-focused companies, seeking to set themselves apart from the murky recreational-medicinal markets, Germany is a critical first step. Their approach has always put patients’ safety first and market concerns second.