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What is Next After the German House Passes Cannabis Reform?

Last week, Germany took the first step towards wholesale cannabis legalisation after the federal cabinet waved through the long-awaited draft bill for Pillar 1 of its strategy.  SOMAÍ Pharmaceutical‘s CEO Michael Sassano explores why the bill is a double edged sword, marking positive progress on one hand, but a ‘huge step backward’ on the other, and who is ultimately set to benefit from the divisive legislation. 


There were few surprises in the German cabinet approval of the previously drafted cannabis law, only ambiguousness. The main points were clear: cannabis decriminalization with a 25-grams-per-person limit, legalizing growing up to three self-cultivated plants and establishing mom-and-pop cultivation clubs with a 500-member maximum.

What has the legal industry all abuzz is the federal cannabis declassification by removing special narcotic prescription requirements. On the face, this was all proposed previously. While the law still has to be discussed at the Bundestag, it may not need to go through the Bundestag, which would make for a fortunate passage scenario.

The Latest Winners and Losers in German Cannabis

German Cannabis Reform Hits Licensed Cultivators, Consumers Hard

There is little doubt industrial cultivators are adjusting to the new possibility that flower-orientated social clubs will bring competitive home-growers to their doorsteps — a big step backward for much-needed European Union and German cultivation investment infrastructure.

Quality standardisation for consumers will be in doubt. Some argue that without regulated processing and cultivation, consumers may be at a disadvantage; others point out that the current levels of quality are so low for medical grading that this is a step up.

There is no historical precedent to explain what social clubs mean. Still, with this decriminalisation model rendering it challenging to determine if a flower product was grown legally or illegally, the unregulated market will surely capitalise on this loophole. Despite good intentions, the social clubs may not be a model that works and undoubtedly is not an investable model for more considerable expansion.

Medical Cannabis Extract Manufacturers Primed Post-German Reform

If flower faces medium- and long-term competition from social clubs as infrastructure grows — since prices and strain selection may be easier to control for home growers — then the true winner post-German cannabis reform will be medical extract manufacturers.

Insurance companies and doctors have long preferred products from licensed manufacturers, but product choice and medical marijuana education have yet to be up to United States standards. Doctors will be less interested in prescribing flower when anyone can go to their local club and get a better, cheaper selection. Suppose the new declassification, at last, opens the door to allow more advanced products than magistral extracts. In that case, extracted product sales will finally occur beside flower sales, just as in mature countries like the U.S. and Canada. Extracts are a recent industrial product sold based on quality and trust, while historically, most people smoked whatever cannabis was available.

Declassification’s Implications for the Medical German Cannabis Market

Should declassification pass, there is little doubt that the German medical market will explode. The short-term boost from declassification could be a booster shot for ailing cultivators and start the much-needed pivot from mature markets to extractors. Cannabis flower prescriptions will significantly increase as barriers fall and entrepreneurs take hold of the market more confidently. Bloomwell estimates the German cannabis market will increase five to sevenfold via declassification.

All global cannabis advocates fight for easier patient access with fewer barriers. Removing Betäubungsmittel (BTM) prescriptions will allow ePrescriptions to decrease the patient, doctor and pharmacy paperwork chain. Removing BTM prescriptions also potentially lowers private access costs by making it more efficient to dispense cannabis. Digital consultation would bring cannabis in line with post-COVID-19 medicine practices to help patients in remote areas find doctors who genuinely know the products rather than local general practitioners. Overall, the ease of prescribing and receiving medicine would significantly improve, leading to a much stronger medical cannabis market in Germany.

Declassification Must be A Central Tenant in German Cannabis Reform

More information and guidance are needed to understand how declassification will work and if newer products will be accepted. Ultimately, Germany is taking one step forward with access and a huge step backward with social clubs. Quality standard’s progenitors just threw themselves back in time to pre-legalised-quality cannabis and opened the door to the unregulated market to sell into the regulated market. Focusing on declassification as a country is the surefire way to ensure the real progress the market and patients seek.

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