A byline by Michael Sassano
There were little surprises in the German Federal Cabinet approval of the previously drafted law, only ambiguity. The main points were clear: decriminalization of cannabis of up to 25 grams per person, legalization of up to 3 self-cultivated plants, and the mom-and-pop cultivation clubs with 500 members. The part in which the legal industry is all a-buzz is the Federal cannabis declassification by removing requirements of special narcotic prescriptions. On the face, this was all proposed previously. The law still has to be discussed at the Bundestag and may not need to go through the Bundestag. This makes for a highly lucky scenario of passing.
Winners and Losers
There is little doubt that industrial-level cultivators are being forced to adjust to the new normal possibility that flower-orientated social clubs will bring garage growers to their competitive doorsteps—a big step backwards for much-needed cultivation investment infrastructure for the EU and Germany. Quality standardization for consumers will be in doubt, some arguing that without regulated processing and growth, consumers may be disadvantaged, others pointing out that the current levels of quality are so low for a medical grade, and this is a step up. There is no historical precedent to explain what social clubs means, but with decriminalization and flower product being difficult to determine if it was grown legally or illegally, the illicit market will be sure to capitalize on this loophole. Despite good intentions, the social clubs may not turn out to be a model that works and surely is not an investable model for bigger expansion.
If flower faces medium- and long-term competition from social clubs as infrastructure grows since prices and strain selection may be easier to control in the garage-growing world, then the true winner will be medical extract manufacturers. The manufacturing area has long been preferred by insurance companies and doctors, but education and choice of products that are effective has been growing but not up to US standards. Doctors will be less interested in prescribing a flower when anyone can go to their local club and get a better selection cheaper if the new declassification opens up the door to allow more advanced products that magisterial extracts, which it indicates, then extracted products will finally take their place right next to flower sales just like in mature countries like US and Canada. Extracts have always been an institutional product sold based on quality and trust, while most people over decades smoked whatever was given to them at that time.
Should declassification pass, there is little doubt that the German medical market is going to explode. The short-term boost from declassification could be a shot in the arm for ailing cultivators and start the much-needed pivot from mature markets to extractors. The prescriptions of cannabis flower would increase greatly as barriers are removed, and entrepreneurs take hold of the market with more certainty. Bloomwell believes in estimates that the German cannabis market will increase by 5-7 by declassification. All advocates are fighting for easier patient access with fewer barriers across the globe. Removing BtM prescriptions will allow ePrescriptions to further increase the patient, doctor, and pharmacy paperwork chain. And potentially lowering private access costs by making it more efficient to dispense cannabis. Digital consultation would bring cannabis in line with post-covid medicine practices and help patients in remote areas to find doctors that truly know the products rather than local GPs. Overall, the ease of prescribing and receiving medicine would be significantly improved, leading to a much stronger medical cannabis market in Germany.
There is still more information and guidance needed to understand how the declassification will work and if newer products will be accepted, but clearly, Germany is taking one step forward with access and a huge step backward with social clubs. The paragons of quality standards just threw themselves backward in time to pre-legalize style quality as well as opening the door to the black market to sell into the market. Let’s all focus on declassification because that is the real progress the markets and patients all are looking for.
By Michael Sassano, Founder, CEO, and Chairman of the Board for SOMAÍ Pharmaceuticals, a European pharmaceutical and biotech company centered on manufacturing in Lisbon, Portugal, and globally distributing EU GMP-certified cannabinoid-containing pharmaceuticals.