NEWS BRIEF

German entrepreneurs find revenue opportunities in private cannabis market

As public health-insurance payouts for medical cannabis in Germany stagnate, entrepreneurs are focusing instead on the private health-care sector, where medical consultations and marijuana is paid for directly by patients.

Although Germany is often touted as an attractive market because statutory health insurers are expected to cover the cost of medical marijuana, opportunities in the private market could be even more attractive for some companies.

Stefan Fritsch, founder of Grünhorn, a pharmacy in Leipzig that specializes in medical cannabis, believes the private market is growing strong.

He told Marijuana Business Daily that Grünhorn’s sales of medical cannabis to patients using private prescriptions had experienced double-digit monthly growth through all of 2020.

Algea Care, a German telemedicine company founded in June 2020, started prescribing cannabis to patients in September. By December, it had more than 500 active patients receiving cannabis prescriptions, co-CEOs Anna Kouparanis and Julian Wichmann told MJBizDaily.

“Supporting patients along every step and taking away tedious tasks from doctors ultimately resulted in drastically improved satisfaction for both patients and doctors,” Wichmann said.

Algea Care started in Frankfurt in September and, by the end of the year, had added physical locations for in-person consultations in Berlin and Cologne with “near-term plans of expanding to Hamburg and Stuttgart due to increasing demand,” Kouparanis said.

Assessing the size of Germany’s private market is complicated.

German authorities have failed to proactively disclose market data, unlike Canada and Denmark, which proactively release a bounty of data quarterly.

For 2019, MJBizDaily estimated that 40% of the flower sold was paid for by patients directly.

Approximately 10% of the German population has private health-care insurance, but the addressable market for cannabis companies looking to capitalize on private medical marijuana prescriptions goes beyond that population group.

The reason is that statutory health insurers – which insure the majority of the German population – reject a large number of applications for reimbursement. Some of these patients might choose to buy out of pocket in the private market.

There is also a segment of patients who do not even try to access insurance coverage because of the hurdles.

According to Kouparanis, “the increasing number of patients paying out of pocket could lead to further price compression because these patients are significantly more sensitive to costs.”

Alfredo Pascual can be reached at [email protected]

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