In the vibrant landscape of Germany's evolving medical cannabis scene, many players have entered the ring over the last half-decade, all vying to cater to the medical consumer seeking relief. Amid the buzz surrounding the development of local and international companies serving patients prescribed cannabis for critical health conditions, an intriguing tale unfolds—one of challenges, hopes, and the persistent pursuit of a new path.
As the German government recently nodded to draft legislation to legalize certain recreational cannabis use, a more profound narrative remains overshadowed—the wellbeing of nearly 200 companies locked in fierce competition for the attention of the medical consumer..
However, beneath the surface, a stark reality looms. A glimpse into this sector unveils a disconcerting prognosis: 80% of startups are projected to falter in their endeavors. The stakes are high, and the landscape challenging, encapsulating an industry striving to blaze a trail while navigating complex terrain.
Peering through the lens of those entrenched in the sector, a sentiment resonates—shared by Stephen Murphy, co-founder and CEO of Prohibition Partners, a trailblazing B2B cannabis media, data, and technology consortium. He encapsulates the prevailing challenge with these words: "Businesses are trying to create something that has never been done before with both feet tied while trying to climb up a hill. It is exceptionally difficult. And as for first-time founders, it is even harder."
One of the central challenges lies in securing a prescription for medical cannabis. Since 2017, German doctors have had the authority to prescribe cannabis to patients. Yet, the road to obtaining this prescription is far from straightforward. Typically, patients grappling with long-term chronic pain resistant to conventional pharmaceuticals like opioids become eligible for such prescriptions.
Dr. Alessandro Rossoni, co-founder and Managing Director of Nimbus Health sheds light on this process, emphasizing, "Effectively, money is generated for the industry when a doctor writes down your product on a patient's prescription. So if you have a strong brand and a good product, but for some reason, you cannot reach the point of prescription, then you're not selling anything."
The landscape is nuanced, divided between medical cannabis coverage by public health insurance companies and private self-pay patients. However, the path to prescription is not without hurdles. It is often easier for doctors to opt for opioids or other pain medication over cannabis. The process involves a time-consuming application for prescription payment by the public health insurer, with one in three applications facing rejection.
Unveiling a glimpse into the reality faced by medical cannabis seekers, a survey by the Cannabis Self Help Network in Germany reveals that a significant number are unable to find doctors willing to prescribe, others face challenges in securing coverage by health insurance, while some experience commitments from insurers but encounter difficulty finding cooperating doctors.
Amid these challenges, a lesser-known aspect surfaces—the prevalence of private clinic users. In a landscape where medical cannabis users often navigate intricate paths, it's not uncommon for individuals to turn to private clinics for consultations and prescriptions, marking a testament to the complexity of the prescription process.
As the sector grapples with its own dynamics, a question looms—how did the landscape evolve to this point? A historical dive reveals the influx of significant funding in 2017 following legalization, primarily fueled by well-funded Canadian companies. This marked the inception of the cannabis funding spree, later followed by waves of growth in 2019 and 2020, albeit at a pace slower than anticipated.
A renewed focus on cannabis legislation by the new government in November 2021 ushered in a fresh wave of funding, rejuvenating the investment landscape. However, the sector's reliance on single legislative pivots has proven precarious, leading to funding uncertainties as the landscape's contours shifted.
As the promise of widespread recreational use fizzled, companies originally poised to capture this market are now maneuvering to adapt to the challenging and competitive medical cannabis arena. These startups grapple with adversity in this journey, offering a glimpse into the trials and triumphs shaping Germany's medical cannabis journey—a journey marked by uncertainty, resilience, and a relentless pursuit of progress.
