Last year, Germany’s medicinal marijuana market was worth US$73 million. By 2023, it will be valued at US $2.7 billion, according to estimates. And two Canadian companies will be supplying the bulk of the demand. Germany is currently the largest cannabis market in the European Union.
Last Friday, the German government awarded 13 licences to cultivate and wholesale medical cannabis, with 10 being evenly split between Edmonton-based Aurora Cannabis Inc . (TO:) (NYSE:) and Ontario-based Aphria Inc (TO:) (NYSE:). Five contracts is the legal maximum allowed by the German government guidelines. The three remaining contracts were issued to a Berlin-based producer, Denecan.
The contracts are expected to be finalized next week following a short appeal process that involves a ruling that is expected today. The contracts are valid for a four-year period and specify a minimum 4,000 kilograms be sold to the German government’s Institute for Drugs and Medical Devices, and supplied to wholesalers for distribution to pharmacies.
Aurora has been supplying medical-grade marijuana grown in Canada to Germany since 2017.
“Winning the tender reflects a natural evolution for Aurora, establishing a more prominent local footprint in this important international market with over 82 million people,” said Neil Belot, Aurora’s chief global business development officer.
The company plans to build a state-of-the-art indoor growing facility in Germany.
Aurora grows and selling cannabis in 24 countries across five continents. It is also involved in genetics research, hemp production and cannabis derivatives.
Shares of Aurora jumped 20 cents last Friday on the open to trade at $12.24 on the S&P/TSX Composite. They increased to $12.35 during the day before closing at 12.28. On Monday, the stocks opened down at $12.12 before dipping to a low of $11.52. This morning they were up more than 1 percent at $11.84 in early trading. Shares are up 64.38 compared to this time last year.
Shares of Aphria were up 1.44 percent early today, trading at $13.055. Shares are up 32.68 compared to this time last year.
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