Secondarily, the lead regulatory agency in that market, which is the TGA, has a market size projection based on the number of prescriptions and prescribers, and we’d be happy to provide that if anyone wants to take a look on it. That is public from the TGA. It looks like directionally that Australia is roughly, you know, around C$400 million and C$450 million a year and growing rapidly and what that percentage is, I wouldn’t say. And that is at or a little bit bigger than the Canadian medical system and is bigger than the German system. Now, just the other sort of points of how you triangulate that given the size of the German population, we believe that the percentage of adults in the German medical system is 0.1% and in Canada, it’s 1%.
Now, I don’t have those percentage usage numbers for Australia. But that, I think, directionally is a good way to get to how do you get the size of market?
Operator: Thank you. The next question is from Tamy Chen of BMO Capital Markets. Please go ahead.
Emily Larsen: Hi. Good evening. This is Emily for Tami. So just sticking with the German market, there seems to be some progress in the German parliament towards rec legalization. So how are you thinking about their medical program platform and the rec opportunity over there at this point?
Miguel Martin: Emily, thanks for the question. So, I would tell you, we have a quite a bit of infrastructure and people in the German market. As I mentioned, we have one of three production facilities. We have an office in Berlin. We have what we believe to be a really strong GRGA organization there. So our read on Germany we think is quite strong and we are optimistic about the plan legislation to de-schedule cannabis in Germany and that will have a significant impact on patients, clinicians, and importantly, pharmacies accessing medical cannabis. And we’ve seen significant changes in markets when that de-scheduling happens and you’ve seen that in other places. We’re monitoring it closely. There are some important votes coming up in the legislature in December and January.
And I think importantly, we believe this will expand the overall medical component of it. Now, as I mentioned, that 0.1% of the adult population in the system versus 1% of Canada, there’s a lot of upside. The other part that, maybe gets lost a little bit is, how difficult it is to be successful in Germany and how few companies are doing that. You have less than 10 companies in Germany that account for roughly 90% of medical sales. If you were to look at Canada, say just rec as an example, you’d have to get probably the 90 companies to get to the same percentage. Now, as it pertains to your question on rec, we believe this is further off and I know there was a lot of optimism about what that may look like, but the reality is that that has to work through the EU system and that’s going to take a little bit longer.
There’s been some discussion about initial steps about social clubs, homegrowing, possession limits that would sort of expand it. But I would tell you that it’s our belief that most of the progress that you’ll see in Germany will be on the medical side. The other part of Germany is it has a lot of influence on Poland, which is very quickly becoming a significant market on that. We’re comforted by the fact that, while not every country is going to have the same regulations, there is a coalescing around commonalities in testing, labeling, manufacturing standards. And as I mentioned before, on the medical side, there’s been no prohibition of importing EU GMP products out of Canada as an example. I know you can have EU GMP in other countries, but that creates a lot of efficiencies and really makes the list of winners in a market like Germany be a short one.
We won’t be the only one, but we’ll definitely be one of them.
Operator: Thank you, sir. [Operator Instructions] Our next question is from Eric Livshits of ATB Capital Markets. Please go ahead.
Eric Livshits: Hi. This is Eric Livshits for Frederico Gomes. So I’m just wondering, you’ve seen quite a nice improvement in gross margins this quarter. Is that largely a function of just the higher medical mix or are there kind of other efficiencies at play here? Thank you.
