German Bundestag Pressures Health Department for Cannabis Reform

In a rapid turn of events, the German Bundestag’s budget committee has placed pressure on the German Minister of Health, Karl Lauterbach, to present a bill for recreational cannabis reform this year for passage by the end of 2022. 

If he fails, he will lose part of his ministerial budget.

The committee, now in negotiations over all parts of the government’s annual spend, decided to temporarily suspend public relations funds for the Department of Health if the recreational cannabis bill is not passed this year. Lauterbach had just announced his intention to introduce such a bill by summer rather than autumn. It is unclear which decision actually came first, but at this point, it is obvious that the Traffic Light Coalition has decided to prioritize a truly burning issue.

Regardless, this is a major move both nationally and globally when it comes to the legalization of cannabis. It is almost unprecedented as a pressure tactic in German politics (which are genteel by U.S. standards). Furthermore, despite all the bureaucratic delay on just about everything here, it is also very clear that when they want to, the German government can move quite quickly.

The American Congress (particularly the Senate side of the Hill) should take note.

It is not like holding major issues hostage over budget agreements is an unknown tactic in Washington. It’s just nobody has been desperate enough, or incentivized enough, to use it for cannabis reform before.

The Germans are Coming

The amount of excitement on the German side of the discussion is absolutely building, daily. Deals are being made, even in the preliminary handshake form and plans are going ahead for all kinds of projects.

The fact that recreational reform is now essentially on the legislative docket begins to also firm up realistic estimates of market start. It is unlikely that anyone will allow the market to begin before the last two quarters of 2023. More likely, market start will be scheduled for the first or second quarter of 2024. Decriminalization, however, may happen a bit faster than this.

There are, of course, many considerations to all of this—not the least of which is administration and paperwork creation (hopefully this time via efficient, non-crashing digitized processes) for getting a move on.

The fact that this is coming now is also very interesting, considering that digitalization of German healthcare is also one of the issues Lauterbach has also been tasked to advance. This alone is an onerous discussion for a system which still routinely utilizes fax machines. Using cannabis as a way to speed up the digitalization of the healthcare system that touches it is a smart move. Even smarter if, again as part of this package of reforms, it relieves a burden on insurance companies on the reimbursement front.

German healthcare is going through a massive budget crisis right now. Recreational cannabis reform would certainly begin to ease a bottleneck of issues. Starting with tax income. Of course, as many in the Bundestag know, the continued criminalization of people known as legitimate cannabis patients who the system cannot process and treat fast enough is also an increasingly lightning rod kind of issue. Waiting times for a new appointment for either a neurologist or orthopaedist are at minimum, three to five months, even in large cities like Frankfurt right now. Whether such doctors decide to prescribe cannabis, or the patient’s insurer will cover it, are two different questions.

Recreational cannabis reform will go a long way to relieving some of the pressure, bureaucratically, politically, and administratively. Not to mention financially.

The Significance

The fact that Germany seems to be fast-tracking cannabis reform, and further under such circumstances will hopefully be a wake-up call to the rest of the world. Starting of course, with the United States.

Beyond this the impact will be felt almost instantly across Europe. Of course, there will be more conservative states which slow down reform. Newly re-elected Emmanuel Macron swore that he would not legalize recreational use while in office. Then again, the savvy French leader is a politician who recognizes which way the wind is blowing. And on this one, it has a nice, European-wide unifying effect.

Portugal, Luxembourg, and potentially Spain may also move quickly now to start to create export crops and products for a very lucrative and hungry market. Greece is having a field day.

What will be allowed to travel where is going to be an interesting discussion, as will the ability of what grade of cannabis will be allowed to cross borders. The first recreational market may in fact happen with German grown cannabis first. That would set up the current medical cultivation bid holders with a huge (and unfair) advantage. It would also potentially give Cansativa an unbelievably unfair edge (if not addressed pronto)—namely they currently hold the monopoly distribution position, granted by BfArM, for all German cannabis of medical grade at least, grown in Germany.

That is going to have to be addressed, pronto. Otherwise, there will be marches in the streets. Given the pressure and thus speed Lauterbach is now under (and given who has the lion’s share of access to his ears on this issue) it is very likely that a lot of issues (and people) will be thrown under the bus for the benefit of the rich, white, men’s club now attempting to exert their brand of control over the conversation even now.

The other discussion that is also coming fast is home grow. 

No matter the particulars (for example, keeping all foreign GACP high THC cannabis out of Germany for a certain period of time), or what is likely to unfold, reform is clearly coming, and fast, to Germany.

How it will be appropriated, tweaked, and amended is anyone’s guess. But the levers are now clearly moving, with a very incentivizing twist, to make Germany, the largest economy in Europe, into one of the most important cannabis markets in the world.

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Should German Cannabis Legalization Include Social Equity Set-Asides?

There is a great deal of excitement in the air aus Deutschland after the German newspaper Handelsblatt reported last week that the Minister of Health, Karl Lauterbach, wants to prioritize recreational cannabis reform as early as this summer. This after repeated rumors earlier in the year that legalization was in a legislative slow lane—after COVID, the Ukraine, and whatever other crisis was more compelling politically.

According to Lauterbach, not only has he changed his views about reform in the last year, but beyond this, he believes that the status quo actually does more harm than a properly regulated, legal market.

The question now becomes how this might be achieved—especially in a country where both the initial cultivation allotments as well as the monopoly distribution license for the same were allocated in ways that were highly discriminatory, if not problematic beyond this for other reasons.

Completely Resetting a New Normal

There are a lot of debates, and plenty of ideas, now swirling about the “best” form of reform. This includes how to allow dispensaries to operate and what form they might take. But one that has not been mentioned (so far at least) is the idea of social equity set-asides. And for whom.

In the United States, in part to compensate for decades of Drug War-instigated racial targeting and increased percentages of arrests and prosecutions for people of color, the idea of set-asides for these communities within the cannabis industry has been a part of the debate for most of this decade. It is slowly becoming a reality as more and more states sign up for reform. Here is the basic premise behind such considerations: People and groups who were unfairly and unduly targeted and punished by Prohibition should get a real opportunity to only reset their lives, but further, be given early support within this new legal industry to do that successfully.

In Germany, the dynamics are not quite the same. However there clearly are groups who have been disadvantaged for decades and might benefit from set-asides, affirmative action, special funding pools, and targeted hiring as the new industry becomes legit.

Here are a few of them:

German Jews (and their descendants)

Until 2020, most Jews who managed to escape the country during the Third Reich (and their descendants) were shamefully prevented from re-obtaining German citizenship by a variety of just post-Nazi-era Administrative Court decisions. These legal precedents barred most survivors from returning to the country at all—and discouraged their children from doing so as well. Beyond this, reparations were a pittance compared to what was actually lost. It was also Jews who pioneered early research into the plant in the 1930s as both they and cannabis were being banned from public and scientific life.

After a far-reaching immigration lawsuit decided by the Supreme Court (2BvR 2628/18) and the actions of the Bundestag last year to amend the Citizenship Act accordingly, that path to reclaiming citizenship is now open for the first time since the end of WWII. New cultivation, distribution, research and even set-asides for shop licensing across the country would certainly signal that the German government is finally beginning to accept longer term responsibility for rehoming this population and further giving them an immediate integration opportunity plus financial and other help to get a start in a lucrative new industry in their long-lost Heimat (homeland).

Other Ethnic Minorities

Germany is not the United States, but there is racism of the “other” kind here, and there is certainly a correlation, if even less studied, between arrests for drug crimes and the color of one’s skin as well as ethnic background. Certainly, upon legalization, such individuals should automatically have their records expunged, if not given special consideration for at least basic employment in the industry. This might include set-aside considerations for cultivation, distribution, B2C selling licenses, and even government funding.

Women

While there certainly are a handful of well-paid and senior women in the German and European industry, so far, the German government as well as the cannabiz has ignored the topic of gender equity almost completely despite the legislative mandate now in place for the country’s largest companies to at least create boards that are gender representative. This is especially true for migrant and ethnically diverse women and those older than 40. The vast majority of start-ups that have received funding, as well as all of the largest companies in the industry which have won special distribution and cultivation licenses all belong to white men of either Canadian or German birth. Further, those individuals are drawn from the upper classes and the elite.

The Long Term Unemployed

This is an exciting new industry. As recreational cannabis shops open in towns around the country, set-asides specifically dispersed via the Job Centers (where most foreigners and ethnic minorities also end up) could make sure that the most disadvantaged have a shot at employment, maybe even if “just” self-employment as an employer, and a new kind of training to get them off the dole and back into the workforce.

Cannabis Patients

Many cannabis patients have both drug arrests on their records, and of course, are generally poorer than the rest of the population due to having a disability and being discriminated or left out of employment opportunities as a result. Many patients want to try their hand at legal cultivation, and/or be part of non-profit distribution and sales efforts even if they don’t have dreams of going public with the German cannabis equivalent of Aldi or Lidl (not to mention BMW).

Legalization and Setting Standards in a World of GMP and ISO

This kind of deliberate diversity gets lip service in Europe generally and Germany most certainly. So far, there have been no concrete plans to address it within the legalizing industry. This was true of the public bids for cultivation and distribution. It also appears to be the case in early reports about how recreational dispensaries will be set up.

Here is how it could quickly change: GMP and ISO are quality and procedural standards that already guide the set up of the industry. If both were amended in practice to shoot for diverse workforces (that also included older employees), that would be a good start. After all, is a lab or distributor or dispensary really compliant in best practices if most, if not all of its owners, founders and senior employees are white, male, and under a certain age?

In a country where gender diversity, including on boards, is now the law, it will be intriguing to see how much diversity (and well beyond just gender) will be deliberately created for the industry—and how soon. Otherwise, no matter how exciting the incoming revolution, it will, per the status quo, look extremely male, pale, and elite here too.

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The Fight Over CBD Oil Continues in Germany

If anyone thought that the road to cannabis reform was going to be easy, a decision last week in Cologne, Germany has just confirmed the fact that this is going to be a prolonged battle, fought all the way with regressive skirmishes and undoubtedly, setbacks.

Here is the latest example. Shockingly, the Administrative Court in Cologne has just ruled that the legal classification of CBD drops (i.e. good old CBD extract) are medical products. As such, they must be approved by the Federal Institute for Drugs and Medical Devices (BfArM)—Germany’s version of the American Food and Drug Administration (or FDA).

The court’s logic on this ruling is that the nutritional value of CBD is still an unknown. Further as outlined in the legal decision, the plaintiff company could not prove that there were comparable products on the market or that CBD might be used as a part of a diet rather than medical regime. The plaintiff’s suggestion that hemp tea might serve as one example was dismissed as the court maintained that cannabis tea is subject to narcotics law—thanks to the indecisive ruling on this in 2021.

The timing of this case, not to mention the finding of the court is also telling. It could potentially throw the entire German CBD business back to the dark ages—even though this is just a state-level, not a federal ruling. Walk into every health food store, not to mention the growing number of CBD specialty shops in Germany, and it is possible to find CBD oil, of various concentrations, on the shelves.

According to Kai-Friedrich Niermann, a leading cannabis attorney in Germany, “The ruling of the Cologne Administrative Court poses a significant risk to the CBD market in Germany if further authorities and courts refer to BfArM and the ruling.”

The case, which was brought by a company with two different CBD oils on offer, was filed against the 2019 BfArM finding that such products “should be” medicinal products because CBD has a “pharmacological effect.”

This is of course, in contradiction to the 2020 ruling of the European Court of Justice that CBD is not a narcotic.

The company now must file an application to appeal the verdict.

The Fight for Cannabis Reform in Germany’s Largest State

This case is a bellwether legal showdown. It clearly shows how schizophrenic the laws around both CBD and cannabis are in Germany right now, not to mention how political cannabis reform—even of the CBD variety—is.  North Rhein-Westphalia, in which Cologne sits, is Germany’s most populous state. It is also the seat of the HQ of BfArM.

What this decision does, in effect, is uphold BfArM’s 2019 decision about CBD, which also occurred before the EU level decision at the Court of Justice. But it also does more than this. According to Niermann, “BfArM and the Cologne Administrative Court contradict the established case law of the European Court of Justice, which requires a significance threshold for the distinction between foodstuffs and medicinal products with regard to the pharmacological effect.”

Further, the case smacks of political interference at a time when the federal government is delaying full recreational reform. All the court has done is merely confirmed the opinion of BfArM.

However, there is a silver lining.

According to Niermann, “The decision is also likely to be difficult to reconcile with other European law. The ongoing applications to the European Commission for approval of various CBD ingredients as novel foods show that the Commission and member states have a problem with the novelty of the ingredients, but not with the pharmacological effect. At minimum, the principle of free movement of goods should then once again ensure the marketability of CBD in Germany, at least for foreign EU products.”

The Backlash Against Legalization in Germany

While any patient will tell you that CBD can have medicinal effects, the problem now before the legal system in Germany (and unlikely to magically just disappear upon the advent of THC legalization), is what cannabinoids actually are. The fight over CBD of course is what will continue to prompt such cases—for now. Look for even more convoluted decisions after “federal legalization” that includes THC.

This is, of course, because cannabis of both the CBD and THC kind can be used both “medically”—namely via prescription of a doctor—and non-medically. In the case of CBD, this means that over the counter products will now fall under the rubric of the medicines agency until this new ruling is challenged.

It also seems to indicate that unless there is a federal decision about cannabis as a plant, as well as its best-known extracts, these issues will show up repeatedly, in court.

The unhappy producer is currently facing 100,000 euros in fines. However, they will undoubtedly appeal. If there was ever a legal “straw man” to be knocked down, the precedent set in this case is certainly one of them.

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The Fight Over Cannabis Flower as ‘Generic Medication’ in Germany

As German politicians continue to avoid the conversation about recreational cannabis reform, there is another major fight underway right now that could have wide-ranging impact on the medical market. If not solved, it could also force even more patients into sourcing flower illicitly, or even into the recreational market when it finally gets approved. Namely, the discussion about insurer discount purchase agreements, cannabis pricing in general, and the larger conversation about what cannabis flower actually is.

In a nutshell, could cannabis flower ever be broadly categorized as a “generic medication” for medical purposes and thus be bought and priced within the market accordingly?

It may sound like a hopelessly geeky question, but the inherent problems, as well as most of the proposed solutions so far, are going to shape the availability if not price of cannabis flower in the medical market. If not solved, it could also remove flower from the medical cannabis conversation forever — or severely limit it. Not to mention insurance reimbursements for the same.

Further, if it is not addressed, the only people who will benefit from the status quo are those on the industry side of this conversation who are now angling for recreational reform not to mention the protection of “branded” cultivars for medicinal and other uses.

Currently the only “generic” cannabinoid medicine in the market, and defined as such under the Narcotics Act, is dronabinol — a THC isolate then diluted with a non-active oil. The fact that this isolate is extracted from a wide range of cannabis flowers has remained outside the scope of the current debate precisely because it is an isolate containing only one cannabinoid.

The fact that patients prefer cannabis flower to dronabinol, of course, has not been considered by anyone with the power to make an impact on these conversations. Patient rights have been ignored so far — and the “non-generic flower” conversation also seems to be heading in this general direction.

Medical Cannabis Definitions and Pricing in Germany

Here is the easiest place to understand the problem. The classification of cannabis as a plant is still an unsolved and confusing issue under the law. The fact that this has not been solved is in part a political problem, but it is also a scientific one.

The German medical and legal system has tried to apply terms to the classification of flower as well as pricing post 2017, but these are clearly limited. These in turn can have devastating impacts. One of the most shameful so far, which has still not been addressed, is that while cannabis flower is not considered a finished “medicine,” patients can still be criminally charged under the Narcotics Act for growing their own because they are “abusing” and “illicitly accessing” what is deemed a “narcotic medicine” at least in this instance. The other problem of course, is that patients who cannot get insurer approval (or are privately insured) must pay about twice the price for cannabis that the insurers do at the pharmacy. This population is currently the 40% of publicly insured patients denied insurance reimbursement for cannabis and the privately insured. This is why so many patients are falling out of the legitimate market and back into the black one.

However, as far as it goes, here are the definitions which so far have been set down about the pricing and trade of cannabis within the medical supply chain. Cannabis grown in Germany under commercial cultivation license issued by BfArM (and there are three companies with such licences), must be sold as an unfinished medical preparation to the sole (monopoly) distributor, Cansativa, based in Frankfurt for 2.20 euros a gram. This in turn must be sold by Cansativa to either other pharmaceutically licensed distributors or pharmacies directly. Pharmacies are the sole legal point of sale to patients and must also sell cannabis flower at a certain price. This price has also been set by law, but only when the insurer reimburses.

This also means that, assuming distributors are able to obtain cannabis from other sources for the same price mandate set for German cultivated cannabis, they and the pharmacy must split about 5.5 euros per gram between them. However, this scenario is also not a given. Many cultivators and distributors have been selling above the reference price (including Bedrocan just across the border in Holland). This means that cannabis pharmacies and other distributors beyond Cansativa, must split a profit margin even smaller than this for cannabis reimbursed via German public health insurance (which is still by far the largest group of sales).

That said, this is a situation which is changing, meaning that GMP cannabis could be sold to licensed distributors within the market for less than 2.20 euros per gram if sourced outside of Germany. This would be very attractive to both insurers and, of course, patients, if they were included in this scheme. What this also means, which is why much of the German industry is up in arms about the idea of generic discounts, is that distributors who do manage to source legitimate medical cannabis outside of Germany will be able to profit more while selling cannabis for less than the limited number of companies (all German, white male owned and operated) who essentially control the majority of the market thanks to the German bid. No discounts needed.

However, the problem does not stop here.

What, Exactly, Is Medical Cannabis Defined as Under German Law?

There are several definitions of what cannabis is. The first is that all cannabis flower, technically, is still considered a “narcotic” even if it is sourced from hemp with a THC level under .02% This is gradually changing, including by legal challenge.

Certified EU GMP cannabis flower, of whatever THC and CBD concentration, is also not considered a finished medical product, which is why pharmacists are such an important link in the chain now. They must “prepare” the flower they receive from distributors, even though in this case, all that means is that they repackage it. This also means currently cannabis flower cannot legally be considered a “generic medication.”

This being Germany where there is a law for everything, this definition also affects cannabis pricing in the medical market. Most importantly, it means that producers and manufacturers who are otherwise allowed to create discounts for generic medications may not technically be able to discount the same when sold in bulk to insurers in the future.

The only thing, as a result that the current regulations (and definitions) have created is a clear business case for the three German cultivators and the sole, monopoly distribution contract pegged to the same.

The Other Big Wrinkle

The insurers know that the days of limiting cannabis patients based on specious claims, including deliberately using old studies negating the medical efficacy of cannabis, are limited. They also do not like paying even 8 euros a gram for the patients they do qualify.

Thus, as of last fall, several distributors announced that they had entered into “discount agreements” with insurers for cannabis flower. This means that, just like wheelchairs and other prescription drugs that are deemed “generic,” insurers can further limit what kinds of cannabis doctors are able to prescribe, and further that patients are able to obtain for a monthly co-pay of 10 euros.

While this solves the price pressures for distributors who are able to sell in bulk to insurers as well as the insurers themselves, it still creates major problems. This includes the fact that a patient who is insured with an insurer who has contracted for certain kinds of cannabis, will only be able to receive a very small range of cannabis flowers. It also removes the prescription rights of doctors almost completely.

This development also still leaves self-payers completely out of the conversation. If flower were, finally, categorized, as a medicine in and of itself, it could legitimately be classified as a “generic,” and further, patients who are also self-payers could legitimately benefit from lower prices too. This development might also create, for the first time, a separate medical price for all flower which is lower than the coming recreational market (much like is done in US states like Massachusetts).

However, what this would also do is create even more of an opening for home grow, which so far, is a dirty word within the German industry itself, if not the government.

However here is what would be great about this kind of development. While there are differences between cultivars, and sativa and indica hybrids impact both recreational and medical users differently, along with the terpenes in the mix, it could be possible to create “bands” for certain kinds of flower that fall generally within a certain range of cannabinoid and terpene concentrations. That is in fact what has been established in Germany so far (at least for THC and CBD concentrations in flower), even though self-payers are still on the hook for brand name prices, no matter what they buy.

However, this development has also been criticized, mostly by the industry setting itself up to sell distinctly branded flower if not extracts. Money and mo’ money is the name of the game, even in a solely medical market.

Who Wins and Who Loses?

The status quo right now is clearly untenable. However much of this has been caused by an unwillingness of those in power to address the genuine issues. This is also however, going to be a hotly fought issue by producers — all of whom want to make money by providing “unique” strains to the medical market.

However, until some big and rather basic questions are answered, including scientific evidence which has so far, shamefully, not even been sought much less planned for, the entire idea of discounted bulk sales of cannabis flower to the insurers much less self-payers, is very much in limbo.

And in the meantime, the industry is trying to sell as much cannabis as it can, at whatever price while trying to stay afloat.

It goes without saying, of course, that there are many patients suffering as a result.

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European Commission Makes Two Big Steps on CBD Reform Front

Not all is doom and gloom on the cannabis front in Europe, no matter the frustrating red tape, delays, and inevitable lawsuits.

Indeed, this week the European Commission released news of two important developments that will certainly move the industry forward regionally. This is true even if further legal action is required in specific jurisdictions. With reform at an EU level, this creates the opportunity for policy and regulatory changes in individual countries like never before. One very good example of this is the Kanavape case in France, which was raised to an EU-level legal challenge, and which, in turn, spawned a similar lawsuit in Germany to allow imported hemp products.

The first announcement is absolutely going to impact hemp production. The second is going to move the needle on setting EU-wide standards on the cultivation front.

No matter how long and torturous the wait has been, including thanks to COVID delays, there is indeed light at the end of this canna-tunnel that ain’t just another train.

Validation of 5 Novel Food Applications

At least five companies in the EU have just received news that their Novel Food CBD cases have reached the final stages of the Novel Food process. These companies are located in the Czech Republic, Slovenia, Switzerland, France, and a British company. 

Novel Food regulation is much misunderstood outside of Europe — and even within its borders there is plenty of confusion. Essentially, this regulation states that if a plant has not been in wide circulation and widely consumed since 1997, it must go through a separate compliance process. When this is applied to cannabis it broadly means three things — the source of the seed, its cultivation, and how it is extracted.

The fact, however, that five of these applications have reached the final level of EU-wide approvals is good news for the entire industry. The entire conversation has been delayed for the last two years thanks not only to COVID, but also to EU-level discussions, as well as international ones on how to proceed with the entire legalization of cannabis.

EC Panel to Vote on THC Levels in Food

Perhaps the two-year delay on all things cannabis, even hemp related, is beginning to break through the legal and regulatory logjam at the EC. Maybe it is the end of COVID, or an understanding, even at this nosebleed level, that reform is not going to go away.

Regardless, the EC’s Standing Committee on Plants, Animals, Food and Feed is again scheduled to vote on a proposal that would raise the level of acceptable THC in marketable hemp foods in Europe. This is after having delayed the decision twice now.

Under the proposal, which will be considered next Monday, February 28, the level for hempseed derived oil will be set at 7.5 mg/kg while dry hemp foods like dehulled hemp seeds, flour, and protein powder will be limited to 3 mg/kg. Hemp seeds contain almost zero THC, but trace amounts are present in the hulls.

Toward a Consolidated, Common Sense Policy on the EU Front?

It is far too early to celebrate on any front, despite the fact that this month has seen the regulatory advance of two big issues of the hemp discussion at a regional level. However, perhaps it is not too optimistic to hope that the achingly slow advance is now coming to an end. Beyond this, the temperature toward cannabis reform generally has moved forward in the meantime, and in fairly large and meaningful ways.

These are, in fact, large decisions and steps to accomplish. For that reason, there is cause to cheer, even though the details are still often lost in the weeds.

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Setbacks In Germany Due to Delays on Forward Reform

There was much excitement in Germany last September in the German cannabis industry, in particular, when the new “Traffic Light Coalition” announced that they would finally tackle the particulars of full recreational cannabis legalization.

As spring begins to think about arriving, however, excitement has begun to fade in Germany with the repeated statements from government officials of late that there were more pressing priorities (from COVID to presumably the Russian-Ukraine crisis). 

In the meantime, the significant problems on the ground for both the industry and patients continue.

This is why, according to Kai-Friedrich Niermann, an industry specialist lawyer now pursuing a legal case against the German government on behalf of his clients to clarify rules on the importing of hemp: “The case for full and final reform is made every day, right now. In the courts, at the regulatory agencies, in the marketplace. There are many issues that will only be addressed by normalization of this market.”

Industry Setbacks

No matter that Cansativa in Frankfurt, the firm that won the BfArM issued (monopoly) contract to distribute German grown medical cannabis is suddenly proclaiming their excitement about the advent of the recreational market (particularly after their recent cash injection from Snoop Dogg) the reality is that recreational pot is still a few miles away yet. Beyond this, the medical industry is suffering from several big issues, starting with the expense of cannabinoid treatments, not to mention the government and health insurers’ reluctance to pay for them. 

In a case decided in Karlsruhe on Monday that is no doubt going to generate challenges rather than set case law, the Social Court ruled, unconvincingly and actually just repeating the 2017 statute, that patients may only receive such medicines in exceptional cases and under strict conditions. This is also discounting the fact that presumably the justices know how much danger and risk still exists for doctors.

Ärzte, as they are called in Germany, face footing the bill for the drug they prescribe to their patients in a situation of non-coverage by the insurers and government agency behind them. One presumes that any doctor taking that risk would be well-versed in the “last option” discussion already.

The plaintiff filed suit against the Medizinische Dienst Krankensicherung or MDK (the state-by-state arm of the public/private coalition that ultimately decides on medical cannabis approvals) and the patient’s health insurance company after he was denied compensation for an oral cannabis spray. 

The doctor wrote that his 27-year-old patient suffered from chronic pain syndrome (the most common reason medical cannabis is prescribed and approved in Germany). He also wrote that the patient could not alleviate the pain in his back and legs with other treatments. This is supposedly the test that is used in such cases, at least according to the 2017 law.

However, the court ruled that other treatments should also be tried.

The response from the cannabis industry here has been swift. “There are several things that need a dire update,” said Lisa Haag. Haag is a Berlin-based consultant, patient advocate, and CEO of of MJUniverse GmbH, which organizes educational events around cannabis and helps pharmaceutical companies understand the plant better. 

“These are awfully high if not contradictory barriers,” said Haag. “Why can’t the other suggested treatments happen in combo with cannabis? Beyond this, the direction is contradictory. As suggested by the court, they make you stop cannabis treatment. This is ridiculous. The expensive bureaucratic processes are still prohibiting access.” 

Haag also noted that this is just one court ruling, and others have put emphasis on the therapy responsibility of the doctor. It is widely expected that the patient will appeal to the tongue-twisting Landessozialgericht in Baden-Wurttemberg.

In addition to this decision on the medical discussion, there has been another setback for the industry—this time on the industrial hemp side. A German energy company, Leag, just announced this week that it was putting its two year experiment with hemp cultivation on open cast mining areas on hold. Leag was conducting the cultivation experiment to determine if new lines of business could be derived from cultivation of the plant, including products that might be made of industrial hemp.

The company also stated that it would revisit its decision if there was a “changed framework conditions or new developments that make the new line of business attractive and economically profitable again.”

“It is precisely these kinds of problems we report to the government, as it needs to know about them and begin to prioritize the passing of the law,” said Kai-Friedrich Niermann. “I won’t have as much litigation work of this kind, but for that I will not be sorry.”

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Doing It Doggy Style: Snoop Dogg’s “Next Episode” in Cannabis

There is no disputing that Snoop Dogg, one of the god (or dog) fathers of rap, continues to prove himself in the world of music while also making newsworthy waves in the cannabis industry—including overseas.

For those on the American side of the world, Snoop recently lit it up at the 56th Superbowl halftime show with an energetic performance.

Snoop Contributes to European Market

Beyond American borders, he is also making headlines. Namely, he also just invested $15 million into Frankfurt-based distributor Cansativa, which has the distinction of not only winning the monopoly contract from BfArM, the German FDA, to distribute all German grown medical cannabis nationally, but is now setting its sights on the nascent recreational market now being considered by German lawmakers.

This is not Snoop’s first foray into the international cannabis industry. Snoop also invested in Canopy Growth as the firm began to expand to Europe several years ago.

However, this is the largest check to date the rapper has written for a cannabis investment, via his VC firm, Casa Verde.

The Fight is on for the German Market

While Cansativa is obviously well-positioned in the German market, they are not the only distributor in the country. Indeed, over 100 cannabis specialty distribution licences have been granted by BfArM. That said, this B-series investment certainly positions Cansativa well against competitors (both present and future).

Their largest competitors so far include Sanity Group (based in Berlin) which has proved adept at attracting American capital, and further from well-known celebrities (like Will.I.Am). Beyond this, another Frankfurt distributor, Nimbus Health, was also just acquired for an undisclosed sum by Dr. Reddy’s—one of the largest generics pharmaceutical firms in the world, headquartered in India.

And this is far from the whole story. Over the last several years, there have been other well-publicized buyouts of start-up cannabis specialty distribution firms—and by big players. 

In 2017, Canopy Growth bought out MedCann, the first indie cannabis speciality distributor in the country, followed rapidly by Aurora’s buyout of Pedianos.

Other firms are also aiming for a serious piece of the market share—whether it is solely medical or a blend of both, as Cansativa has now alluded to, and many other firms have already set their sights on.

Defining a New Blended Market

One of the biggest challenges for every distributor in Germany right now is finding and keeping customers. This includes educating doctors about the different strains on the market, and convincing patients to ask for them. Beyond this, obtaining insurance approvals is a much-maligned process which can take up to a year to achieve.

With the coming recreational market, which many suspect will be steered, at least at first, into pharmacies and then specifically licensed B2C retail stores (not to mention online sales), there will be a less convoluted path to the market than currently exists.

Beyond this of course, every Canadian firm now operational in the market has been positioning themselves for recreational reform since 2017, although sometimes not so successfully. Canopy Growth, for example, just sold C3, the only domestic manufacturer of synthetic dronabinol (the generic THC isolate) for about CA $180 (US $140 million), down from the CA 342.9 million (US $269 million) they bought it for in 2019.

So has every German specialty distributor, whether they have admitted it or not, not to mention the many cultivators now springing up in EU countries like Portugal, Spain, Greece, and much further afield (see countries from Columbia to Southern Africa).

What Snoop’s new investment underscores is that the German market is continuing to establish important fundamentals as it slowly opens up to a fully legal recreational trade.

What Could the German Market Become?

Odds are that no matter the difficulties in getting it off the ground, the German recreational market will dominate the European conversation as it has so far on the medical side. With a relatively well-off population of 80 million people, Germans are both health-conscious and absolutely canna-curious right now. 

CBD products can be found in places like mainstream grocery stores, even as there have been some embarrassing police raids in the last 12 months, and even the issue of recreational hemp is not yet settled legally. Beyond this, it is becoming more mainstream for people to admit they are cannabis patients (or want to be). And of course, coming out of COVID, there is a sense of a need to try new things, reverse or undo policies that clearly are not working, and find new kinds of business opportunities.

For that reason, Snoop’s foray aus Deutschland is certainly well timed, no matter where this new play takes him.

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Defining Hemp Case Heads to Court in Germany

The entire cannabis conversation in Europe is still in very sticky legal territory, no matter the ongoing victories and the ones obviously on the way. This includes, at a regional, EU level, a definition of what CBD is (namely not a narcotic substance), but a concerted failure, so far, by legislatures and regulators to honor or accept that by codifying it into national law.

This is why, much like in other legalizing jurisdictions, so many of these reforms have come first via court challenge rather than legislative leadership—and further using any aspect of EU law to create that legal challenge—even if it seems counterintuitive.

In Germany right now, a ground-breaking and well overdue case is finally headed to court. At the heart of the same, much like the Kanavape case in France, is the final definition of what CBD and hemp is, how much (or little) THC is allowed, and the right to sell not only extracts but the flower itself.

There are several reasons for this—all legal window dressing at this point. It starts with a lingering resistance to reform in many European legislatures, as well as the now trotted-out excuse that cannabis reform, even of the CBD kind, depends on reforming federal narcotics acts.

In Germany, the conventional wisdom so far, on both the CBD and full reform question, has used this as the excuse for why this may not be done quickly. Yet Germany, with a now-established medical market, and, if the new government is to be believed, full recreational reform on the way, has even less excuse for not dealing definitively with the issue. 

On the CBD front, there is clearly no excuse anymore for embarrassing incidents like the police raiding mainstream grocery stores to retrieve items that may (or may not) contain CBD. This is true on a European level, as well as a sovereign one. After all, if France can do it, what is holding up the Germans?

That is, ultimately, the legal logic at the heart of a klage (lawsuit) now before the Higher Administrative Court of Lower Saxony.

According to Article 34 of the Treaty on the Functioning of the European Union (TFEU)—namely the principle of the free movements of goods, German companies are supposed to be allowed to sell CBD flowers and leaves (including in products like tea)—especially if they are imported. Domestically produced products are still in a bizarre grey area.

As a result, in fact of the decision in the Kanavape case in France, where the company imported CBD produced legally in another EU country, several German companies submitted such claims to the German Federal Office of Consumer Protection and Food Safety (BVL) in April 2021. 

These applications were duly rejected by the BVL. 

In response, the companies filed suit last summer at the Administrative Court of Braunschweig. The Administrative Court rejected both urgent applications right before Christmas, 2021. In the opinion of the Braunschwieg Court, the BVL was allowed to deny the applications on the grounds of supposed public interest and health protection.

Keep in mind this is hemp tea that is causing all the kerfuffle. However, the official argument is that THC could be extracted from such flowers (hemp levels in Europe are in the process of transitioning from an allowable 0.02 percent to 0.03 percent.

The companies have now appealed the decision. In their favour is a pre-existing opinion by the Committee of Experts at BfArM (the German FDA) which advises the federal government on amendments to the German Narcotics Act recommended in March 2021 that CBD was not intoxicating.

Beyond this, of course, as of last September, the entire conversation about cannabis and the reform of the Narcotics Act is now front and center nationally as the Coalition begins to try to decide how to implement full recreational reform.

Case Importance and Impact

According to Kai-Friedrich Niermann, the lawyer heading up the legal challenge, this case has as much potential to change the law in Germany as the Kanavape case did in France. The case focuses on the right to first import hemp and then sell it in Germany. 

“The pressure on the coalition to address these changes quickly will be maintained by these litigations. If no cannabis policy reform were to be advanced in Berlin by the new government, this case would have the potential to become Germany’s ‘Kanavape’ moment,” he said. 

“If the court grants the general injunction, at least foreign products from the above-mentioned countries can be freely traded in Germany. However, domestic products would continue to be discriminated against. It would be a small step towards the liberalization of commercial hemp.”

Niermann is being slightly modest. He knows that this case will enshrine a legal principle in stone that will be incorporated into the new law and the decision may be codified directly in the new pending legalization. 

Beyond this, however, it is a significant case in that other countries can also now file similar proceedings. Just as in France, similar proceedings can be launched by invoking the European free movement of goods. And for this very reason, the free movement of goods and trade, would become the engine of harmonization—starting with hemp and CBD products.

It may be a slow and ridiculously torturous path to walk. However, advocates on the ground are looking for every avenue they can to change the law—and this case certainly has not only legs, but the potential for lasting impact.

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German company CPharm confirms cannabis deal with Taliban

A German company has raised some eyebrows after confirming a cannabis agreement with the Taliban. The multi-million dollar deal was finalized late last year but it has just been announced. CPharm is a German cannabis company located in Australia. Last November, the company Chief Financial Officer, Tony Gabites publicly denied having ever connected with the […]

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Germany, Joe Rogan, Weed Taxes and Edible Train Tickets – Latest Updates from December 2021

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