The German government has just announced that it will buy at least 650 kilograms (1,433 pounds) of GMP certified, medical cannabis flower from “domestic producers” who won the tender lots. This means, in other words, that of the three Canadian companies who won the bid (Aurora, Aphria and Wayland/ICC/Demecan), the only domestic production that currently takes place is via the ICC facility in Eastern Germany.

This means that at least the short term winner, certainly on the price front, is ICC and Demecan.

Why?

It is the only one of the three that has certified production facilities in place. The other two producers, Aphria and Aurora, must import from somewhere else. 

However, this announcement makes things even more strategically interesting, as Aurora announced a much lower price to the Italian government – canceled bid nonetheless (that was for medical-grade CBD).

That alone undermines the price now set out by the German government – of €2.30 euros a gram wholesale – as the one to beat in Europe.

This also means that enterprising producers elsewhere now have a reference price to beat (and many of them can). Even with the price of transportation, this price is a calling card for those of Portuguese, Spanish, Greek and Polish extraction who have either entered or about to enter the game.

It also puts the decision to delay the export of North Macedonian flower in an even more interesting new light. No matter when the country decides to export, it has a world of opportunities on its immediate, European, if not German, doorstep.

With this number on the table, enterprising distributors now also have not only benchmarks for the first time, but an insight into the market that so far has only been acquired before by personal interviews of insiders on the ground.

Bottom line? The market is opening for low cost, imported flowers, and oil that can beat that price.

Combined with a reduction in the required mark-up imposed by German pharmacies this means that the retail cost of cannabis in Germany is in line for another fairly dramatic correction at point of sale, and while it may not quite yet beat the unregulated market, this means that cannabis priced certainly under €15 a gram will be available soon.

It also means that the high cost put on bringing in a new premium-priced product is finally beginning to normalize (although expect to see additional drops in price as rules continue to change around Europe). If nothing else, both Italian and Polish crops will further undermine the German reference price, to say nothing of the winds now blowing if not growing in Portugal, Spain, Greece, and other lower labour climes throughout Europe.

However, no matter the ultimate winners in the market from the business side, it also means that patients are beginning to have alternatives to either out-of-sight priced product only affordable with insurance coverage or the black market.