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German cannabis cultivation licences awarded to Aphria, Aurora and Demecan

German cannabis cultivation licences awarded to Aphria, Aurora and Demecan
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Germany’s health regulator, the Federal Institute for Drugs and Medical Products (BfArM), informed the 79 applicants of the outcome on Wednesday.

Canadian companies, Aurora and Aphria, which includes Nuuvera, and the German company Demecan, a joint venture with Wayland Group, will be allowed to grow a combined total of 10,400kg of medical cannabis over the next four years.

Of the 13 lots available in the process, Aphria received five, according to Hendrik Knopp, Managing Director of Aphria Deutschland. Aurora also received five and Demecan received the remaining three lots. Each lot allows the holder to grow 200kg per year.

German company, Lexamed, which successfully sued BfArM last year, was not successful.

Research by Prohibition Partners estimates the German medicinal market is currently worth about €133m and is set to be worth more than €1bn by 2020 when the first large-scale harvest is expected to take place.

Supply Concerns for German Cannabis Cultivation

Experts said there was little surprise in the three winning names, as they had the experience and facilities to match the high expectations of Germany’s regulators.

Supply Concerns for German Cannabis Cultivation

Recapping Germany’s tendering process

Germany legalised medical cannabis in March 2017, but rising patient numbers, which have grown from an initial 1,000 to over 40,000 today, have helped create the third largest medical cannabis market in the world.

To supply the rising patient demand, a tender process for domestic growers was drawn up by BfArM. However, to qualify for approval, German firms had to meet a number of qualifications, one of which was the experience of growing cannabis. As no one was allowed to grow cannabis in Germany prior to the law change, no firms could legally progress to the next stage of the tender process.

Domestic growers sued BfArM forcing them to redraft the rules in order to allow local firms to acquire a reference from outside growers, who would then transfer their experience to a German applicant.

A limited number of applicants made it through the second tender, the majority of which ran out of time due to the complexities of the process. Their only option was to sue BfArM again, and one applicant was backed by a Dusseldorf court in March 2018, who agreed the regulator had made a mistake in not extending the timeline. As a result, BfArM halted the tender process entirely and started over.

Following the court ruling in March 2018, the second round of the tendering process to ascertain who could cultivate cannabis in Germany was initiated and became a single step instead of two.

Imports likely to continue to rival German cannabis cultivation

Imports into Germany will continue even after domestically produced cannabis becomes available. However, this has never been a cheap or straightforward process.

The bulk of the imported medical cannabis comes from Canada and the Netherlands, which are currently the only countries legally approved in Germany to import.

What happens now?

There is a ten-day standstill period before any contracts are signed, during which time unsuccessful applicants can challenge the decision.

The regulator has not made any announcement, which is unusual for a public tendering process in Germany, said Peter Homberg, partner and head of Dentons European Cannabis Practice in Berlin. Will this indicate further twists in what has been a convoluted process? No one is sure.

For more on Germany and the regulatory landscape inside the burgeoning European cannabis market, download The European Cannabis Report: 5th Edition for free now.

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