Product supply interruptions hit German medical cannabis market, but government dismisses risk of shortages

Supply disruptions are rippling through Germany’s growing medical cannabis market, but the country’s federal government says there are no signs at the moment of widespread product shortages.

In response to a recent parliamentary inquiry, the government noted that pharmacies that sell medical cannabis have access to a variety of distributors beyond some companies whose products have been found to be in short supply or unavailable.

As Marijuana Business Daily reported at the end of November, Canadian firm Aurora Cannabis stopped selling medical marijuana products in Germany because the goods had undergone ionizing irradiation and had been distributed without the required permit.

More recently, medical cannabis products by rival Canadian producer Cronos Group went out of stock in the dozen German pharmacies surveyed by MJBizDaily.

Cronos spokeswoman Anna Shlimak declined to say whether the supply issue extended beyond those pharmacies.

She did note, however, that “across the sector, the cannabis industry faces a variety of challenges meeting consumer demand, and, as a company, we are working toward more consistent inventory and availability within the German medical market as well as the other markets we serve.”

Shlimak added that “all of our registrations and relevant authorizations are active and unchanged.”

Aurora product still unavailable

The German government’s statement was made to a member of the Left party (Die Linke) that had asked about the consequences of cannabis products recently becoming unavailable because of compliance issues.

In its reply, the German government said distributing medicines that have been treated with ionizing irradiation without the necessary permit “constitutes a violation of Section 7 (1) of the German Medicines Act, which is punishable by imprisonment for up to three years or a fine.”

According to the government’s response, no supply shortage is imminent because the Federal Institute for Drugs and Medical Devices (BfArM) “has issued numerous permits for the supply of cannabis products treated with ionizing radiation.”

That means pharmacies have access to several distributors from which they can choose to source cannabis products and that patients who until November had been buying Aurora products are now able to substitute those for others.

At the end of November, an Aurora spokesperson told MJBizDaily that the company expected to resume sales “very early in the new year.”

On Dec. 10, Aurora’s former Chief Corporate Officer Cam Battley said during MJBizDaily’s Investor Intelligence Conference in Las Vegas that approval was expected “to take about four weeks.”

As of Jan. 16, Aurora products were still unavailable.

Company spokeswoman Laura Gallant said Aurora “continues to expect to restart sales of our medical products early this year.”

Cronos supply

MJBizDaily periodically checks the availability of cannabis products in Germany by surveying pharmacies for which cannabis sales is a big part of their business.

Cronos products have been unavailable at least for the past week and a half in the dozen pharmacies surveyed.

These pharmacies said they do not have any Peace Naturals products (Cronos’ medical cannabis producer) in stock and said they are unsure when the products could become available again.

Cronos’ revenue for international flower for the quarter ended Sept. 30, 2019, was negative, but total international revenue for the same quarter was 682,000 Canadian dollars ($523,000).

Cronos’ Shlimak said the negative revenue “has to do with our distribution agreement with Pohl Boskamp – Cronos’ distribution partner in Germany – and how the royalties work and are paid from one quarter to the next.”

MJBizDaily estimates that total reimbursement of medical cannabis in Germany in 2019 surpassed 100 million euros ($111. 4 million), making it by far the largest medical marijuana market in Europe.

However, inconsistency of product availability is one of the main concerns of physicians and patients.

Cronos Group trades as CRON on the Toronto Stock Exchange and Nasdaq

Aurora’s shares trade as ACB on the New York Stock Exchange and Toronto Stock Exchange.

Alfredo Pascual can be reached at [email protected]
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