Germany: Competition for the award of cultivation licenses is restarted

The tender for the award of 10 licenses for the cultivation and production of medical cannabis in Germany will be restarted following a decision by the Court of Düsseldorf, which upheld the companies that complained requirements to compete. 

However, German patients are subject to constant disruptions in the supply of medical cannabis by pharmacies, due to the complications of importation by companies such as Pedanios, a subsidiary of Aurora Inc., which has an uncompetitive market, while cannabis cultivation on German soil does not see the light of day. 

In April 2017, the German Federal Agency for Medicines and Medicinal Products (BfArM) released an 18-page tender document with the requirements and technical specifications to be submitted for the production of medical cannabis on German soil and to which 118 companies applied. The project provided for the cultivation of up to 6.600 kilos of cannabis by 2022, but the court considered that the deadlines and deadlines of the tender procedure did not guarantee companies enough time to structure an application.

This decision also gave reason to one of the several complaints that German companies presented, regarding the rigidity of the schedule and the specific requirements - in which previous experience in the cultivation and production of cannabis was a preferential factor -, which favored foreign candidates from such as Canada or the Netherlands, where the medical cannabis framework already allows for the cultivation of medical cannabis.

change of rules
The 10 companies pre-selected for the competition will now have to wait for new rules, after the decision of the Court of Düsseldorf has given reason to the four complaints presented by German companies.

Weeks before the final decision, Judge Heinz-Peter Dicks had already made harsh criticisms of the contest, claiming that the deadline "should have been extended". Following the court ruling, the various candidate companies are considering significant delays in granting licenses and consequently in starting cannabis production on German soil.

Stand-by production favors importers
It is foreseeable that in the list of final candidates selected by the German Government there will be a strong presence of Canadian companies and subsidiaries, including Canopy Growth Corp., MedReleaf Corp., Aurora Cannabis Inc. and Aphria Inc. (through its recent acquisition Nuuvera Inc.). Direct or indirect holdings of other companies such as the Maricann Group Inc., Cronos Group Inc. or Tilray, which hold shares in the German market, and who are also present in the race. Remember that the Tilray CEO Brendan Kennedy has already been interviewed by Cannapress, at the WebSummit, in November last year.

Aphria CEO Vic Neufeld, quoted by the Financial Post, said his company was "disappointed at the delay", but that they will continue with the plan to build a cultivation facility in Germany. In the same article, MedReleaf CEO Neil Closner said: "We are obviously disappointed to hear of this delay, but we are simultaneously moving forward with our plans to start exporting cannabis to Germany in the near future."

On the other hand, spokespersons for Canopy and Aurora, which have already started transporting cannabis to Germany, through their respective subsidiaries, Spektrum Cannabis GmbH and Pedanios GmbH, were more optimistic. “The German market is establishing itself and, if this process takes 12 to 20 months, we will work taking into account that deadline”, said Jordan Sinclair, Communications Director at Canopy.

As for the Aurora company, CEO Terry Booth commented that this “is a strange situation”. THE Pedanios GmbH is a subsidiary of Aurora Inc., became the largest producer of legal cannabis in the world and it already imports cannabis grown outside of Germany: “This means that with a very limited number of competitors, we will be able to increase our shipments”. the corporate director says that “we don't want to feel triumphant in a situation where there were obviously some legal complications for the German government”, but in the short/medium term this situation leaves Aurora in a privileged position. We are talking about a market that could exceed 10 billion euros.

German Hemp Association criticizes
Georg Wurth, president of the German Hemp Association, has been critical of the award process from the start, warning of discrimination against German companies, due to “the criteria that are difficult to meet. The next tender procedure should therefore be fairer,” added Wurth.

The association points out that for patients who suffer from a lack of access to cannabis-derived products, due to the market's dependence on imports, the wait for cannabis made in Germany continues. “For companies, a success, for patients suffering from a shortage of supply, an avoidable extension of deadlines,” said Georg Wurth after the Düsseldorf Regional High Court to rule.
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Featured Photo: Tommy L. Gomez / Cannapress