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The Battle For German Cannabis Market Share

Marguerite Arnold

November 27th, 2017

Policy

The German medical cannabis market has had its share of drama lately. Of the operatic variety. The ongoing mystery surrounding the country’s first domestic grow license has only deepened of late.

But one thing is clear. When the fat lady in the funny helmet stops singing at the end of even the first act, those who have understood and withstood the early hiccups will be in an unparalleled position to determine the shape of a global cannabis industry now establishing itself with authority.

There is no better sign of that than the recent news of the Aurora acquisition of Cronos Group. Why? Cronos has established brands in natural products in Canada that will be of great interest to a newly awakening German medical market. And Aurora has positioned itself smartly already on the distribution front with its May acquisition of German-based Pedianos. In the fall, the company received an import license from the German government to import from Canada.

Cannabis Normal? – Quick Market Update

All things being equal, there should be about a million German patients getting their medical cannabis thanks to the March change in the law. In reality, it has not quite worked out quite that way. Not yet, at least. Right now, people are in the streets marching for medical access. They are also going on hunger strikes for their right for insurance coverage of cannabinoid medications and suing insurers when turned down. The Teutonic battle for access is best encapsulated by the German saying Keine Pflanze ist illegal. No plant is illegal. This has become a movement of its own.

Beyond cannabis specifically, however, Germans like “natural” approaches to all things medicine. For those of North American extraction, it may sound a bit “crunchy” if not old-fashioned. But the fight about big food, big pharma and all that this entails, is about to get serious on the cannabis discussion. Germans are far more “green” as a society than is usually understood outside the country. Starting with foreign corporate boardrooms. The need for authenticity is high here.

That said, the natural and close-to-raw-bud packaged medical cannabis market is made for the German medical consumer, already hungry for more product if not variety than is currently available.

With the acquisition of this kind of branding, IP and expertise, Aurora is just reaffirming how serious it is about setting its sights firmly on a German invasion. That said, they are not the only ones on this lucrative market and with similar ideas.

Who Else Is In The “Alliance?”

It is the height of historical irony that the cannabis legalization map in Europe – from the grow perspective – looks a lot like the old “Axis” political alliance that formed just prior to WWII. Germany, Italy and Turkey have all instituted plans for domestic medical grow programs. The former “good guys” (Britain and France for starters) have prissily sat this one out so far, although Ireland has beat them to the punch. And in Germany alone, the medical access issue is rapidly becoming defined as a human rights issue. By Germans themselves.

Where “green” and “natural” tie into this, is a green marketer’s dream come true. Now “all” that is needed is product. And with the Cronos acquisition, it is clear where at least an early source of this will be coming from. However, Aurora is not the only Canadian LP with expertise and market presence on the ground here.

Canopy, notably under the brand of Spekrum Cannabis and Tilray, appear to have positioned themselves to cover a huge part of the traditional distribution market here too. The battle is on – with product now coming into the country. And set up to flow through mainstream, national channels.

A Game Of Cannabis Risk?

Europe itself is a strategic battle ground to begin with on the cannabis front right now. Eastern European countries are waking up to medical cannabis for two reasons. Bottom line, this drug will save money for public health systems struggling with a greying population. Second, legalizing medical use begins to put a framework in place for dealing, finally with an often violent black market, which has scary brand names of its own. Like the Mafia. And Isis. This is good motivation.

However for the most part, Eastern European countries are set on imports right now. Just legalizing Poland is also likely to import rather than cultivate domestically at least for the time being.

In the past months alone, Eastern Europe has begun to be invaded by Australian distributors in territory not first claimed by Canadian Tilray. Turkey is not currently involved in export of medical supplies, but the country has embarked on an internal grow program for medical research.

To the west, Portugal is the future home of Tilray’s first grow site outside of Canada. And Spain remains an interesting question mark from all things cannabis related. Including medical.

However it is clearly Germany that remains the prize all eyes are on.

Who will take home a cultivation license is still a factor in all of this, and there are growing indications that all of the Auslander (foreign) firms are about to get some home-grown commercial Deutsch competition.

However for the meantime, Aurora has clearly manoeuvred itself into a strategic global supply chain to meet early and exploding demand.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Marguerite Arnold

Marguerite Arnold is a veteran investigative and markets journalist, American expat and author. She has covered the cannabis industry from Germany for the last six years. Her book, Green: The First Year of Modern American Cannabis Reform about the American market in 2014 has just been republished as she is writing the sequel about Europe and the global revolution this year. Green II: Spreading Like Kudzu will be published in 2020. She is also a noted technologist and entrepreneur. Her blockchain-based digital prescription platform MedPayRx was just shortlisted by the German Ministry of Health as one of the "Top 20" use cases for blockchain in healthcare.

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