Only three producers in Germany have official government authorization to cultivate cannabis. The Federal Institute for Drugs and Medical Devices (BfArM) launched a procurement process in 2019, which these businesses used to obtain their licences. Of the three, Aurora runs its cannabis farm in Leuna, Saxony-Anhalt, which is located just outside of Saxony. Tilray, the third licensed producer, is situated in Neumünster, Schleswig-Holstein, and has started shipping cannabis in the interim. It is noteworthy that Tilray and Aurora are both Canadian-owned businesses. On the other hand, Demecan is a noteworthy German startup in the cannabis farming sector. It is a small but respected company responsible for meeting the country’s expanding need for this healing herb.
However, as LVZ reports, Von der Groeben is not at all happy, though. He said, “The new law needs to stop discriminating against German producers,” expressing his dissatisfaction. Its adoption would be highly damaging to Germany’s medical cannabis industry.” He notes,
“Amid all the enthusiasm surrounding the legalisation of recreational cannabis, the proposed law, unfortunately, fails to address crucial issues in the regulation of medical cannabis.”
He goes so far as to say that it poses a serious threat to regional suppliers.
Germany: CanG and effects for medical cannabis producers
As we know, adults will be able to possess up to 25 grams of cannabis and cultivate up to three plants for personal use under the proposed law. Additionally, it makes space for associations dedicated to non-commercial cannabis growing.
However, the strict laws governing medical cannabis remain the same. Medical cannabis producers are limited within both the amount and the price. A federal agency is responsible for overseeing these restrictions.
That is why the transition isn’t without implications for medical cannabis companies. The emergence of legal recreational cannabis may influence consumer preferences. It may potentially lead some medical cannabis users with prescriptions to opt for recreational use if more accessible and cost-effective. Consequently, medical cannabis businesses may experience a decline in their customer base.
Recreational cannabis legalisation can also trigger changes in pricing, reimbursement procedures, and insurance coverage. Ultimately it can affect the profitability of medical cannabis producers.
How to find a balance?
In certain regions, medical cannabis businesses may meet regulatory advantages, such as reduced taxes, more lenient advertising regulations, or unique licensing requirements. Leveraging these advantages, medical cannabis businesses can maintain their competitiveness and cater to patients who prefer the healthcare-oriented approach they provide.
The government should see the potential of the medical cannabis market. The increasing affordability of medical cannabis has prompted a change in patients’ behaviour, with many transitioning from illegal to legal medical cannabis markets. This trend is expected to persist as legal alternatives become increasingly appealing, thanks to their lower prices and enhanced safety. To keep the quality at the same level, the German government should adjust expected recreational cannabis regulations to the medical market as well.