A German court slammed the brakes on the country’s plan to grant contracts to cultivate medical marijuana, giving international exporters an even bigger head start over domestic production as the country struggles to meet MMJ demand.
A representative for the Higher Regional Court of Dusseldorf told Marijuana Business Daily that the Federal Institute for Drugs and Medical Devices (BfArM) is not allowed to appeal the decision.
BfArM had been expected to issue the country’s first cultivation permits for 2,000 kilograms of medical marijuana as early as next week.
Foreign companies, mostly Canadian, positioning themselves as exporters to Germany are the clear winners of this decision, according to executives and analysts.
Canadian companies are already the leading suppliers in the German market, having shipped 183.37 liters of medical cannabis oil and 520.85 kilograms of dried MMJ to Germany in 2017, according to data shared with MJBizDaily by Health Canada.
“It just gives us more time to continue establishing ourselves as a leader in medical cannabis in Germany,” said Cronos CEO Mike Gorenstein.
Cronos is one of several Canadian companies exporting MMJ to Germany.
Deepak Anand, vice president of government relations for the consultancy Cannabis Compliance, doesn’t think Germany will have a domestic cultivation industry to meet demand any time soon.
“It’s taken Canada a greater part of 11 years to get to where we are in terms of our regulations,” Anand said.
“I am not saying it will take Germany that long, with Canadian expertise that time can be significantly shortened, but they still need to go back to the drawing board and develop a new regulatory framework or tender process that is going to stand up in a court of law.”
Last summer Germany started accepting applications for 10 contracts to cultivate a limited amount of medical cannabis.
To be successful, applicants were required to have experience producing high quantities of medical marijuana in a federally regulated market, which effectively eliminated all German companies in BfArM’s initial review.
“Some of the applicants who were not successful in the first round challenged the decision that they were not admitted to the second round of the tender process,” said Peter Homberg, partner and head of the German Life Sciences Practice at Dentons law firm.
In his view, the German agency now has two options:
- Resetting the existing procedure to square one. This would require at least six months.
- Terminating the existing tender and relaunching it with a single-stage under new, more inclusive, guidelines. This would allow the agency to receive bids by mid-May.
Most companies thought to be in the running for the contracts are either Canadian or owned by Canadians.
Other Canadian companies heavily involved in Germany include Spektrum Cannabis (owned by Canopy Growth), Cronos and Tilray.
Germany’s MMJ market at a glance
- The country currently has no domestic cannabis producers, leading it to rely on imports to meet demand.
- MMJ sales are conducted exclusively through pharmacies.
- The number of patients grew from 500 in early 2017 to more than 13,000 by the end of the year.
- MMJ is within reach of 70 million residents under Germany’s statutory health insurance system.
- Patients are free to shop around for a medical plan, some of which include MMJ coverage.
SOURCE: MJ BIZ DAILY