Decrease in export sales of Dutch hemp

Despite the fact that in the future the overall market for medical cannabis in Europe will grow significantly, however, in the foreseeable future, the trend of increased competition from a variety of suppliers will be a determining factor. This will ensure a more stable supply of patients, but will affect a number of operators whose production costs of growing and processing products will not meet market criteria.

For the first time in ten years, total sales of medical cannabis from the Netherlands declined year-over-year (2019 to 2020). Despite the fact that sales of the plant with therapeutic properties in the domestic market increased by 13%, its export sales decreased by 5% compared to the same period in 2019.

Dutch medical cannabis sales

One of the likely reasons for the slowdown in growth is that in 2020, competition arose primarily in the EU from several exporting countries. New suppliers from Australia, Spain, Israel, Uruguay and Portugal have entered the main Dutch medical cannabis market - Germany - during 2020. As competition grows to supply the European market, new exporting countries with lower production costs, such as Uruguay's Fotmer, are increasingly competing with Dutch hemp plants.

In addition to growing competition, the COVID-19 pandemic could threaten the supply chain of medical cannabis from the Netherlands. In particular, despite the fact that the CEO of Bedrocan in April 2020 claimed that the company's supply chain was not disrupted by the coronavirus, however, in the early summer of 2020, the supply of medical cannabis to German wholesalers was delayed. When shipments resumed in July, wholesalers were offered slightly smaller orders than in previous months.

Commentary of experts of the Association "Ukrainian technical hemp"

Over the past decade, the Netherlands has been the largest exporter of medical hemp flowers in the world. Among others, Dutch cannabis growers provide a large share of the largest European markets, in particular Germany (2500 kg / year) and Italy (700 kg / year). Sales of Dutch medical cannabis have grown steadily over the past five years at an average annual rate of 59%, driven primarily by increased international demand. In contrast, the overall market actually shrank 2% from 2019 to 2020.

Today, medical cannabis in the Netherlands is grown by the only Dutch company on the market, Bedrocan. Bedrocan sells the whole crop to the State Office of Medicinal Hemp for distribution both domestically and internationally. 

Despite the fact that in the future the overall market for medical cannabis in Europe will grow significantly, however, in the foreseeable future, the trend of increased competition from a variety of suppliers will be a determining factor. This will ensure a more stable supply of patients, but will affect a number of operators whose production costs of growing and processing products will not meet market criteria.