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German Court Stops Pending Cannabis Cultivation Bid On Technical Fault

By Marguerite Arnold
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In a move that seems to shed more doubt than certainty on domestic cannabis cultivation and the date that it will start auf Deutschland, the Higher Regional Court (or OLG) in Dusseldorf formally stopped the pending bid procedure for the first crop on March 28th. BfArM, the federal agency in charge of regulating all narcotic drugs, initiated that procurement bid. The tender bid was launched after the German Parliament and federal legislators changed the law last year to mandate that cannabis be available via prescription, and further that public health insurers were required to cover it.

That bid announcement was supposed to come as early as last September. Criticisms about the process and requirements began immediately thereafter. For starters, the bid’s requirements excluded all German-only respondents to the bid and left both Canadian and Israeli firms in the front positions to obtain these valuable licenses. However, there were other gripes, including the fact that the amount of cannabis requested (about 6.6 tonnes) was far too low to even begin to meet real demand. Namely, there are easily 1 million German patients who could qualify for the drug.

In the space of the last year, in fact, the number of “official” German cannabinoid patients has shot up from 1,000 to about 15,000. That said, the top three covering insurers also report a mere 64% approval rate. This means that there are more doctors writing prescriptions than insurers are covering.

That, at least for patients and their advocates is a bit of good news despite the blow that any delay in domestic production has created. Doctor resistance to prescribing cannabinoids even when there are no other alternatives has been used as an excuse in many media reports for the speed of market development. That clearly is not true. The attitude on the ground in Deutschland is rapidly changing.

That bid announcement was supposed to come as early as last September. At that point, however,the agency was then forced to extend the response date, which it did, but apparently not for long enough.

Throughout the fall, it was impossible to understand, from any direction, what was going on. Four lawsuits against the bid were launched around September, each with differing complaints that ranged from criticizing the agency for the lack of extension and response time to monopolistic business practices.

The OLG dismissed all but the criticism about the extension.what this decision has done most clearly is slowed down the production of domestically grown medical cannabinoids

The one clear thing to come out of Düsseldorf? BfArM has been banned from awarding its contract to anyone to produce medical cannabis in Germany starting in 2019. The first letters to bid finalists announcing the bid had been canceledbegan arriving the day after the court’s decision.

Reading Between the Lines

There have been rumors since last fall that the bid would end up in such waters. However,all the major producers widely suspected to have applied for the bid also began announcing themselves as finalists in press releases. For this reason, the official line from everyone that the bid was still, in fact, on track.

Nobody could understand why anyone would want or even be able to halt the production of direly needed, locally sourced, high-gradecannabis. That includes BfArM, which made an impassioned response, via their attorney to the OLG in Dusseldorf. Attorney Heike Dahs warned the court that any interruption of the bid was “very bad for the care of patients.”  He was similarly pessimistic about the ability to begin production domestically by the previously set 2019 deadline.

In fact, what this decision has done most clearly is slowed down the production of domestically grown medical cannabinoids (although potentially not by much) while giving officials at BfArM a rather nasty black eye that might yet lead to further legal action.

It also means that there will be another bid process. In the meantime, the ex-im market is, if anything, taking off.

This is a Shock And Opportunity – but not a Surprise

No matter the opinionated emails and IM’ing going on in several languages all over the world right now about the implications legally in the future, the major producers are all taking this in stride. And appear to be well positioned to respond.

According to Dr. Pierre Debs, the managing director of Spektrum Cannabis (the global medical brand of Canopy and based just south of Frankfurt), who responded to CannabisIndustryJournal a day after the court decision, the company is not affected by this development. “Spektrum has a steady and constant supply and we do not anticipate any problems supplying patients through their pharmacies,” he says. Debs received the first German medical import license to bring Canadian cannabis into the country a mere two years ago and has continued to carve a leading path in the discussion across Europe. “In addition to our supply from Canopy Growth Corp, our partnership supply agreement with Alcaliber in Spain will see Spektrum importing sun-grown medical cannabis products starting towards the end of the summer,” says Debs.

DR_PIERRE_DEBS
Dr. Pierre Debs, managing director of Spektrum Cannabis
Photo: ICBC, Berlin

But it is not just the big guys in the mix anymore. And there are many who see opportunityto a situation, which is frustrating.“As the second-largest country by population in Europe and a leader within the EU, the German market represents a new frontier for the cannabis industry in general in the region,” says Zlatko Keskovski, chief executive officer of NYSK Holdings, a Macedonian firm now in its second harvest of GMP-certified cannabis and holding EU export rights.

For such firms, even though NYSK is a surprise entrant to the conversation this year and outside the EU, the current situation represents an unbelievable chance to enter a market literally starving for qualifiedproduct. The firm is currently looking for German distributors who cannot access medical grade cannabinoids via other routes including attending the ICBC in Berlin in April. “This year’s ICBC looks to be a seminal moment for NYSK,” says Keskovski. “We have taken the appropriate steps to ensure our high-quality standards have led to products that our customers, and eventually patients, can rely on. We look forward to the chance to showcase our achievements that we’ve worked so hard for. The ICBC will also present us with the opportunity to meet with potential distributors and future partners.”

German Patients are Going to be on the Front Lines of This Discussion

The difficulties that German patients have already faced in obtaining a drug that is now legal in their own country for medical use (and even for recreational purposes across an open border in Holland) are legion. While to a certain extent, German patients are in the same boat as patients elsewhere and their problems, in fact, there are still huge access issues that remain. For starters, the drug is much more expensive here, so those without health insurance approval face bills of about $3,000 per month. Why the eye-watering price? All medical grade cannabis is still imported, although increasingly this is now just via other EU countries, not just from Canada.

“One of the reasons we organized the national German Patient Roundtable is to give patients a voice in all of this supply and demand discussion and to help BfArM and others formulate workable solutions for all,” responded Philip Cenedella IV when reached for a response by CIJ. Cenedella, an American expat and the organizer of the Roundtable, a nationally focussed, umbrella group that is kicking off its campaign this year, spoke for many who are far from court and boardrooms where the decisions are being made.

Philip Cenedella
Philip Cenedella, pictured left, at the Deutsche Hanfverband (DHV) conference in Berlin last November.
Photo: @MedPayRx, Instagram

“While there are very talented firms who will now take up this discussion with the government and reissue a response for the tender, what we continue to see on the ground is that patients simply do not have the access granted them in the law which was passed over a year ago,” Cenedella says, with more than a note of frustration. “We again are calling on all government officials, industry executives and patient advocates to band together to immediately establish workable protocols that directly help the patients.”

Indeed, despite the frustration and delay, if not new costs and opportunities that this decision creates, one thing is very clear on the ground here. The current status quo is unacceptable. That alone should also put pressure on the powers that be to remedy the situation as quickly as possible. And via several routes, including widening import quotas or even issuing new licenses as a new solution to domestic cultivation is implemented.

“Patients are not being served and do not have access to a medicine that has been proven to improve lives,” says Cenedella. “Our simple request is for BfArM to finally invite patients into their discussions, to work with patients to formulate workable cultivation and distribution solutions, and we humbly request that this happen now before they go down another dead-end road, ending in another court defeat, and resulting in even more delays to the patients that are still lacking the care afforded them by the German Federal Court’s decision of 2017.”

European Cannabis News Roundup 2017 And Predictions For 2018

By Marguerite Arnold
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Europe saw big developments on the cannabis front all year. This includes country-by-country developments that include legalization of medical use and even plans to begin domestic production, no matter how delayed such plans have turned out to be.

By far the most interesting market developments were in Germany all year. The Teutonic state has entered some interesting territory – even if its potential is still in the development rather than rollout status.

Elsewhere, however, medical acceptance is clearly starting to bloom across the continent in a way that is more reminiscent of American state development than what is about to happen in Canada.

One of the most interesting aspects of European reform however, that is in marked difference to what has happened in the U.S., is that grow facilities are being slowly established with federal authorization, even before further reform comes (see Turkey, Slovenia, Germany and even Denmark).

How reform will continue to roll out and shape the discussion however, is still a matter very much left up to individual European states. Cannabis legalization may become the first uniting issue of the new Deutsch ruling parliamentary coalition, whatever that is. In Spain, the cannabis question might yet be a play in simmering separatist tensions. Across the continent, legislatures are, for the first time in two generations, reconsidering what cannabis is, how it should be used, and what the penalties should be for those who use the drug either medicinally or recreationally.

Change is still all over the map. And it is still very, very slow.

Germany

The country’s federal legislators voted unanimously to mandate medical coverage of cannabis under public health insurance (which covers 90% of the population) on January 19th. Since then, however, forward movement has been stymied by a combination of forces and politics. While the legislation became law in March and the government established a cannabis agency, other developments have not been so clear cut. Yes, import licenses are being issued. And yes, there is a pending tender bid. However announcements of the finalists have been delayed since August due to lawsuits over qualifications of the growers, among other things. The new German government (whatever it will be) plus apparent CETA (EU-Canada Comprehensive Economic and Trade Agreement)-related complications have all added to the drama. That said, when the cannabis opera moves into its next act, as of probably early next year, expect to see domestic medical grow go forward. Importing medical supplies, even from across the continent (which is what is happening now) is ludicrously expensive. Rumours are already flying out of Berlin that further cannabis reform is one of the few things that all parties can agree to as a new government forms.

Holland

Sadly, the biggest cannabis-related “development” this year was the decision by all major health insurers to stop covering the drug, just as the German government changed its mind about the issue. Greater regulation of coffee shop grows coupled with this lack of insurance coverage means that patients are being forced into a coffee shop culture which is also commoditizing and commercializing into a high-volume affair, particularly in Amsterdam. While this might just be the new face of an old business, the laid back “coffee shop” culture of yore is an endangered species.

Barcelona, capital of Catalonia
Photo: Bert Kaufmann

Spain

Catalonian independence made headlines globally this year. So did the associated bid for other freedoms of a cannabis sort – particularly in Barcelona. Club grows were set to become more regulated as of this summer. However the massive Catalonian bid for independence has further muddied the waters. Given the fact that cannabis reform appears to be at the forefront of finding political compromise elsewhere in Germany, perhaps givebacks about taxes for this industry might be one way to temper down the still-raging separatist forces afoot.

Poland

The Polish government surprised everyone this fall, and legalized the drug for medical purposes (at least in theory) in November. What this actually means for patients is another story. There are no plans to cultivate on the radar. Patients under the new law are allowed to travel to other countries to seek their medical cannabis. How they might afford it is another question. Not to mention how they will escape prosecution from personal importation if checked at a border.

Warsaw, Poland
Image: Nikos Roussos, Flickr

Polish pharmacists will however be trained on how to make medicaments from imported cannabis. They will have to be registered with the Office for the Registration of Medical Products. This means that pharmacists must be pre-registered with the government – in a move much like the early days of the Israeli medical program. The medicine is expected to cost about $460 a month. How well this will work in serving the country’s more than 300,000 already eligible patients is another story.

Greece

Cannabis economists have long said that what the Greeks really need to heal their economy is a vibrant cannabis injection. And as of mid-November early investors in the nascent market had already staked close to $2 billion in cultivation opportunities. Senior ministers in the government have also publicly backed plans to move Greece into a strategic position to claim a piece of a global cannabis market estimated to reach 200 billion dollars a year by the end of the next decade. It means jobs. It means capital infusions. Exactly, in other words, what the Greek economy desperately needs. Expect to see further formalization of the grow program here in 2018 for sure.

Lithuania

It appears that quite a few countries in Europe are pushing for real cannabis reform by the end of the year, and this little EU country is joining the list. With a unanimous agreement in Parliament already to change the country’s drug policy, Lithuania’s legislators could vote to legalize the drug on December 12th of this year. All signs look promising.

Slovenia

MCG, an Australian-based company, made news in the fall by announcing a new cannabinoid extraction facility in the country, on track for completion this year. The company also ramped up domestic production operations in August. Real reform here still has a long way to go. However with domestic production underway, greater medical use looks promising.

Denmark

The country signed a production agreement to open a new facility in Odense, the country’s third largest city with Spektrum Cannabis, the medical brand of one of the largest Canadian producers (Canopy Cannabis) now seeking a foothold in Europe late this fall. What this means for ongoing reform in Denmark is also positive. The company will import cannabis via Spektrum Denmark until all the necessary approvals are ironed out for cultivation.

Portugal

While “reform” here is less of an issue than it is elsewhere (since all drugs are decriminalized), Portugal might yet play an interesting role in cross-European legalization. Tilray, another large Canadian-American firm with interests in Europe, announced the construction of a large medical cannabis facility in the country earlier this year. That plant could easily ship medical supplies across Europe as new countries legalize but do not implement grow facilities.

Did ABCann Lose The German Cannabis Bid?

By Marguerite Arnold
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In rather shocking news out of Germany on the cannabis front, it appears that Canadian LP ABcann has not been selected as one of the finalists in the country’s first tender bid to cultivate cannabis domestically.

As reported in the German press, the company has not been invited to submit an offer in the final award procedures. The reason per a company spokesman as quoted in the German media? The company proved it met the required qualification thresholds – namely it could deliver the required amount of product as required by the German government. However the amount it could produce was less than other firms being considered.

That is a strange statement, especially because the ten licenses on offer only called for a total of 2,000 kgs of production total by 2019 and 6600 kgs by 2022.

Who Is ABCann?

ABcann has been in business since 2014 in Canada, when it received one of the first cultivation licenses issued by the Canadian government. It has also been aggressively positioning itself in the German and European market this year – and in multiple ways. It got itself listed on both American and German stock exchanges by summer. The company established a subsidiary headquarters in Schönefeld as of August 2017. As late as October, the company also was appearing at industry conferences, like the IACM medical conference in Cologne, as an expected finalist in the first bid.

An ABCann facility in Canada

However, the company’s plans to build a $40 million, 10,000 square meter plant somewhere in Lusatia are now also reportedly on hold. The exact location of the plant is unknown, per German government requirements that grow facilities remain secret. That said, with a year and a half to complete construction, if given the green light even by early next year, it may be that this was the reason the company has apparently not made the cut. Or perhaps the German government did not believe the company was adequately funded. A September exercise of warrants netted the company an additional $45 million in operating cash. But with expansion plans in not only Canada and Europe, but Australia too, did the company pass the German test for liquidity?

Management changes are also afoot. As of October 1, Barry Fishman, a former Eli Lilly executive took over as CEO of ABCann Global. Ken Clement, founder of the company, announced in mid-October that he was stepping down from his position as Executive Chair of the Board to be replaced by Paul Lucas a former President and CEO of GlaxoSmithKline Canada. John Hoff, the Geschäftsführer (or CEO) of ABcann’s German subsidiary, has also recently left the company. When asked by CannabisIndustryJournal about his reasons for doing so at the Cannabis Normal conference in Berlin at the beginning of November, Hoff cited “management and creative differences” with ABcann Canada as the impetus for his recent departure.

However with the news of ABcann’s apparent loss of a front-runner position in the pending bid, such news appears to herald a bit more of a shakeup at the company, if not a refocussing of overall global strategy.

A source within the company who wished to remain anonymous also said this when contacted directly by CannabisIndustryJournal. “Our top priority currently is to acquire an import license. We also fully intend to pursue all of our plans in the German market, but we have no firm dates on the construction front.”

The State of Medical Cannabis Reform Auf Deutsch

The German medical cannabis question has certainly jerked forward over the past several years through several rough patches. This year it has gotten even stranger. And nobody is quite sure where it will end up.

The news about ABcann is also the latest episode in a very strange story that has continued to develop mostly out of sight of the public.

That bid process, which was expected to announce the winners by late summer, has now dragged on through the fall.Germany began moving forward quietly on the cannabis issue in the first decade of the century. Patients could only access the drug in basically trial mode. Most patients who qualified with a doctor’s prescription and a special permit to take the drug, could also access only Sativex (which is very expensive) or the synthetic form of the drug, dronabinol, manufactured domestically in a facility near Frankfurt. All bud cannabis was imported from Holland by Bedrocan. Strictly controlled not by German, but rather Dutch law on cannabis imports.

In 2014, the first German patients successfully sued the government to grow their own plants if their insurance companies refused coverage of the drug and they proved they could not afford alternatives.

This year, in January, the German government voted unanimously to change the law to mandate public health insurance. The law went into effect in March. Mainly driven by a desire to halt home-grow, the rules changed again. Post March 2017, patient grow rights have now been revoked. Now patients are theoretically allowed to get cannabis covered under public health insurance. In reality, the process has been difficult.

In April, the German government created a new “Cannabis Agency” under the auspices of BfArM. And BfArM in turn issued a tender bid for the country’s first domestic licences in April.

That bid process, which was expected to announce the winners by late summer, has now dragged on through the fall.

When Will The Winners Be Announced?

That too is unclear. It is very likely that the final announcement will not be made by the government until the beginning of the year – after the new government is formed. The so-called “Jamaica Coalition” – of the mainstream CDU, the Greens and the liberals (FDP) is under major pressure to address the issue of access. So far Chancellor Angela Merkel has signalled her resistance for additional changes to the new cannabis law. That said, the current situation in Germany, which is untenable for patients and doctors, as well as companies trying to enter the market and investing heavily, is unlikely to hold for even the next several years.

Problems with finding doctors and medical reimbursement under insurance have kept this patient population from growing the way it would otherwise.In late October, the news broke that two legal complaints had been unsuccessfully filed against the bid itself. Both parties’ complaints were dismissed. Yet there also appears to have been a third complaint that has actually devolved in to a real Klage – or lawsuit. Lexamed GmbH’s claim directly addresses issues expressed by many German-only firms this year. Namely that they were unfairly left out of the bid process because of a supposed lack of experience. As such it is likely to be closely watched by other existing German hopefuls.

This lawsuit has now formally delayed the announcements on the bid decision until at least after December 20th of this year, when the oral arguments will be heard in the case. A decision about the bid will go forward when this has been decided, by the beginning of 2018.

In the meantime? Cannabis imports are starting to enter the country. In late summer last year, Spektrum Cannabis, formerly MedCann GmbH, located just south of Frankfurt, received the first import licenses from the German government to bring medical cannabis into Germany from Canada. Both Aurora and Tilray were granted import licenses this fall.

There are 16 different kinds of cannabis on the market right now. And about 170 kilos of cannabis were imported into the country in the last year. There are also currently about 1,000 patients although this number is artificially low. Problems with finding doctors and medical reimbursement under insurance have kept this patient population from growing the way it would otherwise. There are easily a million patients in Germany right now who would qualify for cannabis if the system worked as it was originally intended in the legislation passed in January.

That said, despite the recent news that ABcann is “out” – at least for this round– apparently the pan-European bid process is still very much alive, despite many recent rumours that it was dead in the water. And plans also seem to be afoot for a separate and additional cultivation licensing round potentially as soon as next year. Details however are unclear and nobody either in the industry or the government is willing to be quoted or give any further information.

Soapbox

Budtenders: Providing Education and Customer Service

By Rachel Stires
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Budtenders represent the front line of any cannabis dispensary, and as such they are responsible for fostering a valuable customer service experience that will have clients returning in the future. However, the role of budtender goes much deeper than simply providing customer service. If you want to develop a profitable business with deeply embedded customer loyalty, you can do no better than to hire an exceptional team of budtenders to provide your patrons with useful information and a memorable customer service experience that will keep them coming back for repeat sales.

Offering Education for All Customers

Perhaps the most important role the budtender plays in any dispensary is providing the customer with useful knowledge that will help them make an informed purchase. For many people, legal cannabis is still a very new concept, and there are a good deal of customers who have never tried cannabis products during prohibition. For these customers, it will be essential that an experienced budtender walk them through everything they need to know and help them choose a strain that will be best suited to their needs. In addition to dosing and strain advice, budtenders can help explain how various paraphernalia works, as pipes and bongs will likely be foreign to them.

For less seasoned smokers, information on dosing can be the difference between a positive and negative experience. This is primarily a concern with edibles due to the long lasting nature of their effects, but can benefit other methods of delivery as well. The effects and potency of different strains can vary widely, so it can be difficult to judge how much to ingest. Though it is impossible to overdose on cannabis, using too much can have a negative impact on the experience. By offering experienced insight into the product they are selling, budtenders can ensure that the customer will have a more positive experience with cannabis, leading to lasting relationships with your company.

Budtenders can provide plenty of value for more experienced consumers as well. The fact of the matter is, there is an endless sea of different types of cannabis products on the market, and learning all of them requires more research than many cannabis consumers are willing to invest. Whether a customer uses cannabis for medicinal or recreational purposes, they will likely have developed preferences when it comes to what they like to smoke. It is important that budtenders be knowledgeable enough to direct the customer to a product that will live up to their expectations.

A client suffering from anxiety shouldn’t be recommended towards an energetic sativa, for example, as this will likely give them a bad case of paranoia, resulting in a negative experience that could send their business elsewhere. Likewise, a daytime smoker probably won’t be happy with a relaxing Indica that will put them to sleep. Budtenders need to keep up with the various strains that are in stock at all times and be able to direct their customers to the right product.

Budtender Presentation and Service

Of course, being knowledgeable about cannabis is a necessity, but a good budtender must also be able to convey this information in a manner that educates the customer. The best budtenders will be approachable and prepared to answer any question thrown their way. They should be able to present the information like a teacher, a quality that will put customers at ease and leave them confident they are in good hands.

Dispensaries can set themselves apart from the competition by choosing their budtenders wisely. It is important to hire budtenders who present themselves in a highly professional manner including down to their manners and clothing. When a customer buys cannabis from a store, they may have preconceived notions about the budtenders working there. By hiring knowledgeable, personable and professional budtenders, businesses can tackle negative stereotypes surrounding the newly emerging cannabis industry and improve customer satisfaction.

If you’ve been to a lot of cannabis dispensaries, you’ll know that some of them might feel like a drug dealer just leased a building and set up shop, business as usual. With legalization comes the opportunity to legitimize cannabis consumption to a degree not possible before, and many dispensaries are helping to change the perception of the industry by catering to more refined crowds with attractive shops and a professional atmosphere. A good team of budtenders can go a long way towards establishing a dispensary as an upscale business.

Overall, A great budtender is an invaluable asset to any dispensary, and staffing your business with them is your best bet at building lasting relationships with your customers. Budtenders with expansive knowledge of cannabis strains, effects, and dosage, as well as a professional and personable demeanor are essential to the success of a dispensary, and without them a business might suffer.