Conor O’Brien – Analyst
February 16th, 2020
Imports of medical cannabis flower into Germany hit record highs in Q4 of 2020, closing the year with a 37% year-on-year growth according to data from the Federal Institute for Drugs and Medical Devices (BfArM). However, the year-on-year growth in imports is clearly beginning to settle.
Germany imported 3,264 kilograms of medical cannabis flower in Q4 of 2020, the largest amount for any quarter to date, bringing the yearly total to 9,249 kilograms. The amount of medical cannabis imports to Germany has been growing rapidly, at over 100% growth year on year for 2018 and 2019 but reduced to 37% for 2020 at year’s end.
Import levels are subject to fluctuations, and not all imported product is consumed by German patients in a given quarter. Therefore imports should be taken together with other metrics such as reimbursement data as a gauge of the size and activity of the total market. As we reported in December, Q3 saw a stagnation in growth of reimbursed medical cannabis.
In the past, the demand for medical cannabis flower in Germany has been met primarily by imports of cannabis from Canada and the Netherlands. However, this is beginning to change. As we reported last week, the exports of cannabis in the Netherlands decreased for the first time, by 5% year on year to 3,380 kilograms for the year. This was likely replaced by supply from Uruguay, Spain, Australia and Israel, who all began exporting commercially to Germany in 2020, with Portugal having joined the ranks in 2019.
In the near future, we expect to see the balance of supply shift away from the Netherlands and Canada, to include imports from countries with potentially lower production costs such as Uruguay and Portugal. In addition, the first medical cannabis products cultivated and manufactured domestically in Germany are expected to hit the market by March this year. Domestic cultivators will supply Germany with at least 2,600 kilograms of medical cannabis per year, though these quantities could be exceeded.
As cannabis supply into Germany increases, so too does the competition for producers and wholesalers. The best response to this competition will likely involve tactical use of sales resources as well as marketing of increasingly popular extract and isolate products.
Prohibition Partners will be diving deeper into these issues and the wider supply chain of Europe in their upcoming 6th edition of the European Cannabis Report.
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