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The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.
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The landscape for cannabis legalization in Europe and the EU has not quite reached the same level of legitimacy and tolerance that it has in the United States. Recreational use is still illegal in all 27 member states of the European Union (EU) and within Europe, and while the majority do allow medical use, the laws vary from hyper-restrictive regulations permitting only the use of cannabinoid-based drugs (but not the plant itself) to the far more relaxed regulations allowing any doctor to prescribe medical cannabis for any indication.
With such a varied legal landscape, there’s still a lot of work that needs to be done to legitimize medical cannabis in Europe to the extent that it has been legitimized in the United States. Comparing Germany and the United Kingdom (UK) reveals the impact various regulations have on the cannabis market, patients’ quality of care and access, and what kind of approach a company in the space needs to become a dominant player in the European market.
Germany: the Largest, Most Mature Medical Cannabis Market
Medical cannabis has been legal in Germany since 2017 and German laws allow any doctor, including someone’s general practitioner, to prescribe it without needing a special license. It can be prescribed to treat any condition and in any form — from cannabinoid-based drugs to extracts or the dried flowers themselves. Patients who are prescribed cannabis can have the costs of the medication covered by their national health insurance.
In such an open, nonrestrictive market, it’s perhaps no surprise that the market for medical cannabis has grown substantially in the few short years since legalization. To date, somewhere between 60,000 and 128,000 patients in Germany are being treated with medical cannabis, and many of them are getting reimbursed for the cost of treatment by their insurance. For comparison, the next-largest market is the Netherlands with an estimated 9,000 patients receiving cannabis-based treatments.
The United Kingdom: a Young, Restrictive Market
While medical cannabis is legal in the UK, the landscape contrasts sharply with Germany. Only specialists can prescribe medical cannabis and the National Health Service (NHS) will not reimburse patients for the cost if they are prescribed so all cannabis-based treatments must be paid for out of pocket.
With only a few medical professionals allowed to prescribe and no NHS assistance with the cost of care, the impact of restrictive policies can be seen in the numbers. Just 3,000 patients in the UK are currently receiving medical cannabis, despite the country’s population of 67 million being only slightly smaller than Germany’s 83 million.
What These Different Regulatory Landscapes Mean for Cannabis Companies
To succeed in Europe’s uneven medical cannabis market, a company needs to put just as much effort into education and outreach to help build momentum toward less restrictive medical cannabis laws as it does into building up a cost-effective yet flexible business model.
That’s precisely what Khiron Life Sciences Corp. (OTCQB: KHRNF), a vertically integrated cannabis company, is doing with its unique strategy tailored to address those challenges and position itself as a dominant player in the burgeoning European medical cannabis market.
Khiron successfully entered the UK cannabis market in June 2020 and has expanded its portfolio to two cannabis flower products and is the exclusive LatAm supplier and founding member of Project Twenty 21. Khiron and Project Twenty21 address barriers with a subsidized pricing model and supporting initiatives to change regulations. Khiron additionally received accreditation for UK Medical Cannabis Education for its innovative education program Khiron Academy.
Khiron also entered the German market in March 2021 and has already expanded the portfolio to two Cannabis flower products and is uniquely positioned to bring actual clinical expertise and real-world data from the wholly-owned Zerenia clinics/LatAm/UK to German prescribers.
Germany is essentially the most mature cannabis market in Europe, with about 60,000 to 128,000 patients, and a very open medical cannabis law was passed in March 2017. The process of expansion may just be getting started for Khiron as it can continue to leverage connections and experience across the EU.
Khiron manages the entire process from seed to sale: cultivating quality cannabis, processing it into a range of medicinally valuable products, and connecting with patients directly through its network of medical clinics.
By handling as much of the cultivation, distribution, and sales processes as possible, Khiron has more control over operational costs and can more readily pivot as needed to meet the differing requirements of medical cannabis legislation in the various countries where it operates.
Its network of medical clinics also contributes to Khiron’s patient-centric approach. Rather than simple dispensaries, Khiron’s clinics are full-service medical clinics, offering physiotherapy, mental health treatment, and minor procedures along with other core health services. This gives Khiron an edge over many competitors that simply fill medical cannabis prescriptions and create an opportunity for patient outreach and education about the benefits of medical cannabis.
In Europe, Khiron is also deploying a robust education and outreach strategy. Its Khiron Academy, which just received accreditation this year in the UK as a continuing professional development program, trains medical professionals in the applications of cannabis-based treatments. The program not only raises awareness and knowledge about medical cannabis but helps destigmatize it.
In another effort to raise awareness and work toward legitimacy in Europe, Khiron has joined Project Twenty21. The project is a large, long-term study with the goal of gathering enough evidence on the medical merits of cannabis to encourage the National Health Service (NHS), the UK’s public health insurance system, to include coverage for cannabis treatments. Khiron is the exclusive Latin American supplier for Project Twenty21 and currently offers a subsidized pricing model for patients in the program to help address barriers to access in the more restrictive UK market.
The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.
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