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US – German Cannabis Producers Can’t Do Business Together, Here’s Why – by Michael Knodt @ marijuana.com

US, German Cannabis Producers Can’t Do Business Together, Here’s Why


BY MICHAEL KNODT ON

Bureaucratic hurdles and an unexpectedly high demand for medical cannabis in Germany have created a bottleneck that’s plagued cannabis patients and producers alike. It would seem as though working with the United States could alleviate some of the pressure, but the federal government in Germany has avoided working with the country’s producers for fear of violating the United Nations Single Convention on Narcotic Drugs.

Until Germany can develop a robust cannabis cultivation industry, its patients will continue to receive their medicine sporadically from Canada or the Netherlands. While 18 varieties of cannabis are supposed to be available, patients are lucky to find four strains at their local pharmacy — a significant issue when German doctors are required to prescribe a specific strain for patients. If that strain’s not available, the prescription is worthless.

Once the Israeli government has defined their guidelines for cannabis export, their medical cannabis will find its way into German pharmacies to help alleviate the recent bottlenecks. Israel is expected to develop a cannabis export system in the next couple of years.

Cannabis farmers in the U.S. West Coast, Nevada, Colorado, and Alaska might welcome the opportunity to expand into international markets, and patients in Germany could benefit from the new, highly effective selection of U.S. cannabis strains. But the United Nations Single Convention on Narcotic Drugs labels cannabis on par with cocaine and opium — therein lies the problem for Germany doing business with U.S. cannabis producers.

The Single Convention on Narcotics and Drugs of 1961 is still the foundation of worldwide drug legislation. It includes the coca, opium poppy, cannabis, the opium plant’s raw materials, opiates, heroin, and some synthetic opioids such as methadone. The Convention on Psychotropic Substances of Feb. 21, 1971 extended the list of controlled substances to include psychotropic substances such as amphetamines, barbiturates, and LSD and came into force on Aug. 16, 1976.

Only the medical use of narcotics for pain relief is excluded from the Convention but has to be enacted in compliance with the measures deemed necessary by the United Nations (UN). Member nations must report their produced, exported, stored, and used narcotics to the Narcotic Control Council.

A State Must Purchase All Medical Cannabis Crops

Article 23 of the Single Convention states:

A Party that permits the cultivation of the opium poppy for the production of opium shall establish, if it has not already done so, and maintain, one or more government agencies (hereafter in this article referred to as the Agency) to carry out the functions required under this article.

Article 23 (2) (d) says: “All cultivators of the opium poppy shall be required to deliver their total crops of opium to the Agency. As soon as possible, but not later than four months after the end of the harvest.”

According to Articles 26 and 28 of the Single Convention, the same control system applies to coca and cannabis. Health Canada is in violation of Article 23, paragraph 2d for allowing producers to sell directly to patients. Unlike the Office of Medical Cannabis (OMC) in the Netherlands, the Canadian agency does not purchase and sell the licensed producers’ crops.

The establishment of such an agency is independent of whether government institutions or licensed private providers take over the cultivation. Such agencies only exist in the few states where opium, coca, and cannabis are grown legally: The Turkish Grain Board (for Opium in Turkey), Health Canada’s Office of Controlled Substances, the National Institute on Drug Abuse in the U.S., the Federal Institute for Drugs and Medical Devices (BfArM) in Germany, the Austrian Agency for Health and Food Safety, the Office of Medicinal Cannabis in the Netherlands, the Czech State Agency for Medical Cannabis, and the Medical Cannabis Unit in Israel.

The U.S. government would have to recognize the medical benefits of cannabis and remove the drug from Schedule 1 of the narcotics act before the NIDA could offer medical cannabis for export to the German BfArM.

Ways Around the Single Convention

It is almost impossible for a member of the United Nations to legalize cannabis without coming into conflict with the international community. Uruguay, Bolivia, and Canada have already had to deal with the issue and have each taken different approaches to reconciling new national policy with existing international agreements.

Out and Back In

In 2009, the Bolivian government proposed deleting some provisions regarding the coca leaf, but the proposal was rejected by the other member nations. On June 29, 2011, Bolivia withdrew from the Single Convention through Jan. 1, 2012 and rejoined with an objection to Article 50 on Jan. 10, 2012.

Bolivia stated that it would allow the cultivation, trade, and consumption of coca leaves in its country. Within one year, 15 contracting nations filed an objection, well short of the one-third quorum required to reject Bolivia’s objection. Bolivia was reclassified as a contracting party on Jan. 11, 2013.

Ignore the Issue

Uruguay was reprimanded shortly before the legalization of cannabis by the UN Drug Administration’s International Narcotic Control Board (INCB). The former INCB-president Raymond Yans accused Uruguay’s then-president Jose Mujica of having an “attitude of a pirate” because his government legalized cannabis. Mujica fiercely resisted the allegations repeatedly made against his country and publicly responded to the criticism of the former INCB chairman:

“Tell the old man to stop lying. We can meet whenever he wants in Uruguay. […]. He sits in a comfortable position on the International stage and believes he can tell nonsense.”

Despite the dramatic exchanges, the international community has not sanctioned Uruguay for being the first country in the world to legalize cannabis. Incidentally, a similar complaint was addressed to the United States after the legalization ballots in Colorado and Washington State. In November 2012, Yans stated the legalization of the cultivation and possession of cannabis in Colorado and Washington violated the treaty and asked the U.S. government to restore conformity with the single convention.

Recreational cannabis is legal in eight states and the District of Columbia, and the international community is far from sanctioning the U.S. However, ignoring the treaty also means missing out on access to the international market and the opportunity to take part in international research efforts.

Don’t Comply, Justify

At the 59th meeting of the United Nations Commission on Narcotic Drugs in March 2016, Undersecretary for Health of Canada Hilary Geller expressed Canada’s interest in international cooperation and made it clear, “the Government remains committed to strong international cooperation to combat the world drug problem and wherever possible, will seek to align its objectives for a new marijuana regime with the objectives of the international drug control framework and the spirit of the Conventions.”

Canada is the first to take the position of “non-compliance.” With Geller’s announcement, Canada has laid the foundation for an ongoing debate on how to regulate cannabis at the national level without violating international legal obligations.

Change

Even if the 1961 Single Convention could be amended, that would involve a complex, years-long process.

Canada could set a precedent in July 2018, by forcing the U.N. to rethink the position of cannabis for the first time since 1961. The aim of the process would be to give all member nations the opportunity to regulate recreational and medical cannabis in the future. Legislation in international agreements is never set in stone, it can be changed any time the democratic will of the member nations demands it.
ABOUT AUTHOR
Michael Knodt is an expert on cannabis politics and cannabis culture across Europe. Born in North Germany, Michael has been living in Berlin since 1990. He initially studied history and journalism before receiving his certification as a carpenter. Since then, Michael has made regular visits to countries where cannabis is cultivated, such as Jamaica and Morocco. He has worked as a freelancer for Weedmaps, Vice Magazine Germany, Sensi Seeds and numerous German-language cannabis magazines since 2004. From 2005 to 2013, Michael was the Editor-in-Chief of Germanys biggest cannabis periodical. He also is the face and presenter of the most popular program on cannabis prohibition and just launched a new channel called “DerMicha.” Aside from his journalistic work, Michael is a cannabis patient, activist, sought-after speaker on conferences and congresses, and a father of two.

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Regulation in Germany….and we aren’t talking about soccer :)

The current regulation in Germany made it difficult for German companies to apply to get a license for Cannabis cultivation.

** And that is why the process is now held up in litigation in the German court system. One of the unsuccessful bidders has sued over the requirements and the entire application process is on hold, with any potential awards being made in Q1 or Q2 2018 at the earliest.

What is the most popular model for cannabis cultivation in Germany, so far?
The cultivation in Germany is currently not legal, done outdoors and indoors and hidden from sight and smell as best as possible.

There is no legal German cultivation currently allowed, even for patients with valid medical approvals.

There is small cultivation being done as part of R+D projects in Universities and Scientific companies.

Regarding joint ventures: How do foreign cannabis companies usually work together with German companies?

In various ways, based on their business objectives and strategy. Three examples are:

Canopy Growth Corporation purchased a German firm Medcann, which became Spektrum Germany. They are considered by many to be the premier cannabis firm in Germany today.

Maricann of Canada purchased a former cargo facility in Dresden for 3€ million and is ramping up their European operations, adding staff, and building out their new European headquarters.

An international firm is currently in discussions with a German startup, to establish a joint venture partnership which will make news around the world. This partnership should be made public in early 2018 and will be ground-breaking.

To cover the demand of medical cannabis Germany is importing from other countries. Supply is coming especially from Canada. Which other countries might be relevant cannabis suppliers in the future?

Canada and The Netherlands are currently the only authorized countries to import into Germany. Supplies are seriously constrained and with Canada becoming a legal recreational country in July 2018, the supply bottlenecks are expected to be exacerbated well into 2019.

Tilray has announced plans to establish a cultivation facility in Portugal to supply the German, and European market in the future.

The governments of Greece, Israel, South Africa, Australia, Chile, Uruguay, and others are currently working with private sector companies to establish their own cultivation and export capabilities.

Germany, with twice the population of California, is a key market for any serious player in the global cannabis industry.

What is your personal opinion about the current German regulation. What will be the next major steps?

Regulation and taxation is always better than the illegality and violence of the black market. Always.

Thank God for the German court system which has brought legalized medical marijuana to the people, if it were up to the politicians, we would still be waiting.

Now the intelligent implementation of recreational laws need to be established to legalize the plant which has been used for thousands of years.

Reducing opioid deaths, helping certain people with their medical conditions, and enabling super-straight people to enjoy jazz music are just some of the benefits of a world where ganja is regulated, safe, and profitable.

The flower of cannabis will always have a place in the market, but in the next years we will see an increase in other forms of cannabis that are more easily consumed….edibles, oils, salves and the like. As a result, GMP (Good Manufacturing Process) certification is going to become very important for those wanting to establish a quality product in the German and European markets.

And if we look at the European Cannabis market. Which major market trends do you identify?

1- Everyone seems to be focusing on cultivation, but this segment is expected to become a commodity item in the near term. Companies may want to look at establishing a product line including “finished products with GMP certification” to become a leading force in this market.

2- At some point the insurance companies are going to become true partners in providing cannabis therapies to the German pharmacies. This will happen as a result of cost-savings and health-benefits realized vs. the current pharmaceuticals offered to patients.

3- In the words of Peter Tosh:
“Legalize it.”

The Berlin Peace Accords (attached) calls for an end to the 80 year World War On Cannabis, and we agree. Legal, regulated, safe and non-violent recreational marijuana markets have already been established in the US and Uruguay, with Canada and others joining the party in 2018.

Pharmaceutical companies don’t like it, Beer companies don’t like it (although the owners of Corona beer just invested $250 million in Canopy Growth’s cannabis business last month) and some short-sighted politicians don’t like it. But “We the People…” have made our opinions known and the calls for a rational, legal, safe and non-violent cannabis market is just a few moments away here in the center of Europe.

These are historic times, Germany is leading the world in many ways, 2018 will be an interesting year.

peace,
Phil


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Kai-Friedrich Niermann has a really good update on the potential for legal cannabis here in Germany…….news on the “Jamaica Coalition” is expected within hours,……..more later. – Phil

https://www.kfnplus.de/jamaica-current-german-coalition-and-cannabis-control-act/#comment-2

Jamaica [Current German Coalition) and Cannabis Control Act

Annotation on practical implementation by Kai-Friedrich Niermann, Attorney, Paderborn [Germany]

Let‘s say the coalition partners part this evening and determine the uptake of coalition negotiations. And let us furthermore assume The Green Party with tie-in of FDP achieve Cannabis liberalisation in full as well as pushing through their Cannabis Control Act in the negotiations going on from mid December until shortly before Christmas. And also let’s assume the Cannabis Incorporate Act is then voted in by Bundestag in May or June [2018]; then Germany will be faced with even more massive changes and the latter in various sectors.

The Cannabis Law includes the option of applications for cultivation licences (farming), wholesale trade licences as well as retail licences such as specialist shops. In addition to this import and export licences can be applied for. Expert prior knowledge is not required and simply personal trustworthiness as demanded within public-houses law is stipulated. Business owners must not have previous convictions.

Assuming a conservative estimate of 10 t of Cannabis per week being consumed in Germany this results in an annual demand of 520 t. The production of Cannabis is deemed to result in a harvest of 440 g per m² within a harvest cycle of 52 days which allows for 7 harvests per year. To cover 107% consumption of Germany an acreage of 180.000 m² would be prerequisite.

Breaking down and allocating these figures to an average municipality such as Paderborn with a population of 140.000 this would result in a required cultivation acreage of 307 m².

With the scheduled Cannabis Control Act tax of 4€/g provided by statute, 1€/g for production costs, 2€/g for wholesale trade and also 3 €/g for specialist shops this results in a price of 10€ in total per gram which is equivalent to the current black market price. It will be a balancing act not to drive the price to high to enable draining the black market effectively as intended.

For Paderborn alone and at this retail price it would amount to a turnover for cultivation/farming of approx. 890.000 €, 1,8 million € for the wholesale trade and 2,6 million € for specialist shops.

However the Cannabis Control Act provides for numerous regulations as to Quality Assurance, protection of production lines, safeguarding of youth protection and prevention. Consequently production facilities must be secured with fences and alarm systems. Transport of Cannabis is governed by specified security restrictions, the specialist shops must train their personnel and deliver proof for consistent follow-up trainings as well as a substantial social concept. Also packaging has to be secured to a high extent and must feature comprehensive warning and reconnaissance information.

It remains doubtful that the current illegal Cannabis producers will meet these requirements in full and step out from illegality. For this reason it is to be expected that capital investors who with their capacity are able to administer the task more economically will edge into the market.

Then within the 2nd half of 2018 the race for the desired licences for farming, wholesale trade, import, export and specialist retailers would begin.

Restrictions as to numbers of licence permits are not scheduled within Cannabis Control Act so any desired number of farming facilities or specialist retailers could operate. Indeed we may assume that the Authorities will initially be totally snowed under and will authorise thoroughly drawn up applications at first which are based on convincing technical programmes and a business plans.

Any potentially interested party striving to be a player in this new and strictly regulated market is to focus on the new situation just in time and develop technical and operational concepts, investment concepts as well as calculations of overall return on investment as well as liquidity calculations. And just in time could „slip into gear“ as from tomorrow morning!

RA Kai-Friedrich Niermann

http://www.kfnplus.de

k@kfnplus.de

+491773108923

Jamaika und das Cannabiskontrollgesetz

English Version

Einige Anmerkungen zur praktischen Umsetzung, von Rechtsanwalt Kai-Friedrich Niermann (Paderborn)

Nehmen wir einmal an, die Jamaika-Koalitionäre gehen heute Abend auseinander und beschließen die Aufnahme von Koalitionsverhandlungen. Nehmen wir weiter an, dass die Grünen im Verbund mit der FDP es schaffen, die vollständige Freigabe von Cannabis zu erreichen und ihr Cannabiskontrollgesetz in den Verhandlungen von Mitte Dezember bis kurz vor Weihnachten durchbringen. Nehmen wir weiter an, dass das Cannabiskontrollgesetz dann vom Bundestag im Mai oder Juni beschlossen wird, dann stehen Deutschland große Änderungen und in vielen Bereichen noch größere Herausforderungen bevor.

Das Cannabisgesetz sieht die Möglichkeit der Beantragung von Anbaulizenzen, Großhandelslizenzen sowie Einzelhandelslizenzen, sogenannte Fachgeschäfte, vor. Ferner können Einfuhr und Ausfuhrlizenzen beantragt werden. Besondere Vorkenntnisse sind nicht erforderlich, es muss lediglich die üblicherweise zu verlangende Zuverlässigkeit, wie im Gaststättenrecht zum Beispiel, vorliegen und beim Geschäftsinhaber dürfen keine einschlägigen Vorstrafen bestehen.

Geht man nach konservativen Schätzungen davon aus, dass pro Woche 10 t Cannabis in Deutschland konsumiert werden, ergibt dies einen Jahresbedarf von 520 t. In der Produktion von Cannabis geht man davon aus, dass ein m² einen Ertrag von 440 g erbringen kann, was bei einem Erntezyklus von 52 Tagen ca. 7 Ernten pro Jahr ermöglicht. Man benötigt also allein 180.000 m² reine Anbaufläche, um dem Bedarf von Deutschland zu 107% zu decken.

Bricht man diese Zahlen auf eine durchschnittliche Kommune wie Paderborn mit einer Einwohnerzahl von 140.000 herunter, ergäbe dies eine benötigte Anbaufläche von 307 m². Bei einer im Cannabiskontrollgesetz vorgesehenen Steuer von 4 €, bei Produktionskosten von 1 €, bei Kosten für den Großhandel von 2 € sowie bei Kosten für die Fachgeschäfte von 3 € pro Gramm ergebe sich ein Grammpreis von insgesamt 10 €, der dem Preis auf dem derzeitigen Schwarzmarkt entspricht. Der Spagat wird sein, den Preis nicht zu hoch zu treiben, um auch tatsächlich, wie beabsichtigt den Schwarzmarkt austrocknen zu können.

Allein für Paderborn ergebe sich bei diesem Verkaufspreis ein Umsatz beim Anbau in Höhe von ca. 890.000 €, beim Großhandel von 1,8 Millionen €, und bei den Fachgeschäften von 2,6 Millionen €.

Das Cannabiskontrollgesetz sieht allerdings zahlreiche Vorschriften bezüglich der Qualitätssicherung, der Sicherung der Produktionsanlagen, der Sicherung des Jugendschutzes und der Prävention vor. So müssen die Produktionsanlagen mit Zäunen und Alarmanlagen gesichert werden, der Transport von Cannabis unterliegt bestimmten Sicherheitsauflagen, die Fachgeschäfte müssen ihr Personal am Beginn schulen und regelmäßige Nachfolgeschulungen nachweisen sowie ein umfangreiches Sozialkonzept erstellen. Ferner müssen die Verpackungen umfangreich gesichert und mit zahlreichen Warn- und Aufklärungshinweisen gestaltet werden.

Ob es für die zahlreichen, bisher illegalen Cannabisproduzenten möglich sein wird, diese Anforderungen in Gänze zu erfüllen und aus der Illegalität herauszutreten, bleibt zu bezweifeln. Es ist daher zu erwarten, dass große Investoren mit größeren Anlagen auf den Markt drängen werden, die allein aufgrund ihrer Kapazität in der Lage sind, kostengünstiger zu wirtschaften.

Sodann würde im 2. Halbjahr 2018 ein Wettlauf um die begehrten Lizenzen für Anbau, Großhandel, Import, Export und Fachhandel beginnen. Eine zahlenmäßige Beschränkung der Erlaubnisse ist vom Cannabiskontrollgesetz nicht vorgesehen, es können also beliebig viele Anbauflächen oder Fachgeschäfte betrieben werden. Allerdings ist davon auszugehen, dass die Behörden zunächst völlig überlastet sind und die Anträge zuerst genehmigen, die vollständig ausgearbeitet sind und denen ein in technischer und betriebswirtschaftlicher Hinsicht überzeugendes Konzept zu Grunde liegt.

Es ist somit allen Interessenten, die in diesem neuen, strikt regulierten Markt agieren wollen, sich rechtzeitig auf die neue Situation einzustellen und bereits jetzt technische Betriebskonzepte, Investitionskonzepte und Rendite- und Liquiditätsberechnungen zu entwickeln. Die Zeit könnte ab morgen früh zu laufen beginnen.

RA Kai-Friedrich Niermann
http://www.kfnplus.de
k@kfnplus.de
+491773108923


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MERKEL GETS RELIGION on the 500-year anniversary of Martin Luther’s Reformation project. Legalized marijuana in Germany now on the horizon.

Cannabis Consultant in Germany

Cenedella.DE

October 31, 2017

As many Americans start the day making plans for Halloween 2017, the folks here in Germany have the day off of work to celebrate the 500-year Anniversary of Martin Luther’s project to reform German society. Surprisingly, the newspapers today also announced Chancellor Angela Merkel’s intentions, along with her new coalition partners called the “Jamaican coalition” to consider legalizing marijuana.

Seems an unintended benefit of the AFD’s victories in the last elections, is the CDU ruling party is now more receptive to working with those with divergent views in order to maintain their leadership position.

Could this really be the start of the Reformation of the 20th century drug laws in Germany and beyond?

Has the work of the DHV in Berlin and their partners finally started to pay dividends?

Was the signing of the BERLIN PEACE ACCORDS http://www.berlinpeaceaccords.de , which begins with “We the people of the Year 2017 do…
Hereby declare that it is our inalienable basic human right to have the freedom to grow, medicate and enjoy the plant we call Cannabis, without any governmental limitations.
We demand our plant has no more regulations or limitations than a tomato plant…..” really have been the precursor to this historic moment?

Good questions, time will tell, but for sure our collective efforts as cannabis business executives are starting to pay dividends.

The month of October had started off with over 350 doctors, scientists, investors and industry professionals waking up in view of the massive Cologne Cathedral, which is truly an amazing sight to see in person! The International Association for Cannabinoid Medicines’ (IACM) CANNABINOID CONFERENCE was held in downtown Cologne bringing together experts from Canada, Australia, Germany, and from throughout the world. Their website is http://www.cannabis-med.org and three take-aways were:

The idea that “Marijuana has no medicinal value” was pretty much, fully debunked 😊

The breath and quantity of existing “clinical trials” on our plant is amazing.

Meeting Josh Stanley, whose company has arguably helped more medical marijuana patients than anyone, was a privilege. CW Hemp’s team continues to lead the industry in many ways,…and additionally they are simply very cool people.

Later in the month, the folks from the regulatory and compliance organization ASTM came to Berlin for a 2-day intensive session for their new “Technical Committee D37 on Cannabis” section. You know we are becoming a real industry when 2 days is spent talking only about compliance related issues. Half the group was from Germany, including executives from the first licensed marijuana testing facility located within Germany, scientists from the University of Berlin currently working on marijuana clinical trials, and a few of the leading homegrown companies on the front lines including ABCann Germany, MH Hemp, Pedanois, and two guys who reminded me of what a young Ed Rosenthal would be like. 😊

So as November 2017 begins, many of us will meet in Berlin this weekend for the first annual DHV Convention. Their website is https://hanfverband.de and they are unequivocally the leading organization for marijuana reform in Germany today. This convention will probably confirm these four truths of the marijuana landscape in Germany today:

Canadian firms are kicking butt!
They understand the requirement of GMP certification, their government is supportive of providing qualified companies an export license for their THC-based products, and their executives are damn smart.

German firms are coming of age, are intelligent and committed.
The first DHV convention will be highlighting the work of patient advocates, industry professionals, knowledgeable physicians and forward-looking politicians involved in building this new industry within the German borders.

The European, South American, African, Israeli and Australian firms are all actively making plans to succeed.
Governments, investors, and executives from throughout the world are looking at Germany and making their plans to enter the European market with its 750+ million potential customers. They are forming strategic partnerships, investing in commercial facilities, and making Europe a priority for 2018.

The USA is an abysmal no-show in the game.
America started the war on Marihuana last century, and somehow tries to keep the war alive today. Scientist, Stoners and Society have evolved quite a bit since the 1930s. The Germans have taken note, changed course in their direction, and their people will be better off as a result.

Maybe now it’s time for President Trump get religion and start his own Marijuana Reformation project?

– Philip J. Cenedella