A byline by Michael Sassano
After touring Germany, it is clear to me that the German medical cannabis industry is now trending solidly upwards, potentially to a one billion euro market by the middle of 2025. After all, the Germans agree with the United States Department of Health and Human Services report deeming cannabis safe and a safer alternative to many existing pharmaceuticals.
The growth of the German medical cannabis market is poised to be highly profitable for the country. One billion euros of sales with a taxable 19% VAT would produce an additional 190 million euros in taxes, not to mention the additional jobs the medical cannabis market would create. There isn’t a politician in the European Union who can ignore the positive impact of these taxes and increased citizen safety through regulation. In fact, most lawmakers are pushing ahead toward more access in their own countries. Big pharma distributors and telemedicine providers are paying attention to those numbers, too.
German Cannabis Laws: The Good, the Bad, and the Ugly
As the German medical cannabis market matures, we must continue to evaluate the policies in place to monitor future progress.
“The Ugly”
Cannabis products continue to carry unreasonably high prices, mainly brought on by an archaic rule that compound pharmacies can and must charge a 90% premium to purchased products.
The required premium also confuses the most efficient, appropriate way to register and dispense products. German pharmaceutical distribution revolves around finished dosage forms, and many are not equipped for the magisterial processes.
“The Bad”
The extension of magistral rules hampers efficiencies and prevents producers, cultivators, distributors, and everyone else accessing the medical cannabis system from operating properly. Luckily, cannabis entrepreneurs have developed their own internal systems to address this shortcoming; some are even developing their own enterprise resource planning (ERP) systems.
“The Good”
On the positive side, there is so much demand for medical cannabis that providers are forging new relations and creating new systems to address the market profitably.
While some older models struggle to keep up with demand, newer, more cost-effective models are grabbing market share. For example, older established companies growing 2x are seeing younger, more efficient models grow at 3x as they can address demand faster and more economically.
Big Telemedicine Enters the German Medical Cannabis Market
Big Pharma and Big Telemedicine are entering the German market. These groups have been efficiently delivering products from point A to point Z. They are loaded with cash and professional staff and have been operating profitably for decades.
The reality is that cannabis entrepreneurs will be massively outgunned in cannabis distribution as these big pharma players get their models set up and operating. There will be serious pressure on margins going forward. Since growers are already squeezed to the bottom and are fighting back with the increased demand, Big Pharma companies will likely start tapping new networkers as older distribution models grapple with what to do and how to compete.
The State of Cannabis Clinics in Germany
Cannabis clinics are popping up in Germany faster than ever before. However, massive pharma teleclinics are also entering the market and adding cannabis as an additional point of sale. Entrepreneurial cannabis clinics with the limited scope inherent to the cannabis industry simply don’t have the capital to compete with Big Pharma clinics in technology, doctor pulls, and origination — and especially in terms of marketing budgets, as some pharma groups are spending one million euros a month in advertising.
What is Next for German Medical Cannabis?
It is very clear that all cannabis entrepreneurs will experience a massive growth spurt in 2025 — and while most estimates are more conservative than this author’s — I believe Germany will balloon to one billion euros by late 2025, two billion euros by 2026, and four billion euros by 2028. This rising tide will float all boats and draw incredible investment capital.
However, in the background, Big Pharma teleclinics and distributors will put pressure on entrepreneurial models. The biggest pharmacies concentrating on cannabis will continue to hold an edge under magistral preparation compound pharmacy laws, as they will be able to service the volume players and the smaller players that cannot package efficiently. ERP systems to improve efficiency and platforms that correlate pharmacy inventories will become an integral part of the infrastructure.
Medical Cannabis in the EU
2025 already looks bright for German medical cannabis, and the race is on. Legacy entrepreneurial companies and Big Pharma platforms will be forces to reckon with as they are already ramping up market efforts.
As these numbers and players become more significant, each EU country is watching and pushing for changes, as well. Some newer countries will jump ahead of Germany’s infrastructures as the path to medical cannabis has already been defined for pharmaceutical players. More strict medical countries with limited indications like MS, epilepsy, and Stage 3 cancer will relax their restrictions and add more indications like pain, sleep, anxiety and stress-related issues. Additionally, the pharma players will be there from day one, potentially making the entrepreneur distributor and clinic models a thing of the past.
The success of Germany’s medical cannabis sector is a test case for the EU, spotlighting the economic impact and healthcare potential of cannabis legalization across Europe. With significant growth on the horizon, Germany’s medical cannabis industry is rapidly becoming a model for Europe, and the competition between innovative entrepreneurs and established pharma giants will shape its future.
About the author
Michael Sassano, Founder, CEO, and Chairman of the Board for SOMAÍ Pharmaceuticals, a European pharmaceutical and biotech company centered on manufacturing in Lisbon, Portugal, and globally distributing EU GMP-certified cannabinoid-containing pharmaceuticals.
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