December 11th, 2020
Conor O’Brien
The National Association of Statutory Health Insurance Funds (GKV), whose members insure 90% of the German population have released the data on reimbursed medical cannabis usage in Germany for Q3 of 2020.
In a continuation of the trend seen over the first half of the year, the revenue growth of the industry from quarter to quarter has stalled. Part of this is undoubtedly due to the new price agreements between the German Pharmacists Association and the GKV which has contributed to a decreasing retail price for cannabis products.
Source: Prohibition Partners/GKV Gamsi
Q3 saw contractions in the flower product category and increases in the sales of full-spectrum extracts. Products prepared from flower at the pharmacy saw a 25% reduction in Q3 compared to the average of the first two quarters, with an 8% decrease in raw flowers.
Full-spectrum extracts on the other hand saw a 14% increase in sales for the same period. This trend mirrors the events in mature markets such as Canada, where an increasing shift from flower to oils is being witnessed. There may also be an influence of COVID-19 at play, where medical users of cannabis in the US for example, have shown a tendency to move from smoking to consuming oils or edibles as a precautionary measure.
Overall, the industry grew by ~15% year on year compared to Q3 of 2019. This is a strong sign that medical cannabis access is increasing, but on a more drawn out timescale than in the North American markets. The penetration of medical cannabis in Germany sits at around 0.15% where it is above 1% in the US, and as high as 8% in some states. Part of the stall in Q3 growth can also be attributed to a seasonal dip in sales also witnessed in 2019.
As Prohibition Partners previously reported, it is not a lack of patients in the country which holds back growth, but a lack of progress on the side of politicians and the health insurance sector. While medical cannabis is still novel for most physicians in Germany, the vast majority have been in favour of opening up medical access to the substance. The practices of insurance companies are likely to be holding back a portion of further growth.
Statutory health insurance companies reject 38% of the applications for reimbursement from patients, limiting doctors ability to prescribe to their patients. This could be solved in the future by making the legislation around insurance of medical cannabis less ambiguous and making insurance of prescribed cannabis mandatory for statutory insurers.
In spite of this new data, increasing sales are to be expected in the coming quarters and years. This comes in the context of an increasing trend towards liberalization of cannabis access globally.
Recently, we reported on the UN rescheduling of cannabis to a less dangerous category under the Single Convention of Narcotic Substances. This progress is mirrored in events such as the EU recognition that CBD is not a narcotic substance, and the progress toward full medical legalisation in Switzerland.
For a deep dive into understanding the German medical cannabis and CBD users, see Prohibition Partner’s report German: the CBD and Cannabis Consumer. For bespoke consumer data and strategic support, contact the Prohibition Partners consultancy team at info@prohibitionpartners.com.
