Rumbles In The German Cannabis Distribution Jungle

Berlin Germany Berlin Germany

As Germany opens up its economy again, cautiously, of course in the aftermath of the first COVID-19 scare, there are certainly moves afoot in the cannabis industry on the B2B side.

Most of this is also due to shake out this year as events beyond the Pandemic continue to develop in a predictable path.

Here are the broad, general outlines:

  1. The German distribution contract for all German grown cannabis has been delayed YET AGAIN. For those who missed it, the contract bid was issued by the Federal Institute for Drugs and Medical Devices (BfArM) earlier this year, and like the original cultivation contract that kicked off the entire shebang, this too has been delayed several times (now to June 23). This tender competition is seeking the fairest cannabis distributor of them all to deliver the entire domestically cultivated crop to any pharmacy in the fair (German) land who places an order for any kind of it. This fairy tale is also likely to go down to the same kinds of shenanigans seen during the cultivation bid except that this time there are a few more sources available. Look for an established Mittelstand to take the bid this time. This ain’t start-up territory.
  2. In an act of remarkably well-timed (or badly timed) government interference in the market, the Dutch government, home of Bedrocan, has recently announced a change in policy. Namely, it will be limiting the number of German importers it will sell medical product to. As of late, this had gotten to be fairly ridiculous territory. Namely that any qualified German distributor could show up and get an equal share of the regular allotment. This led (predictably) to smaller and younger distributors in the market reselling their Bedrocan product to others, also predictably driving up the cost of Dutch medical cannabis in the German market.

Both developments spell a period of intense competition in the domestic distribution market for cannabis. There are according to recent reports, 40 cannabis distributors who were showing up for Bedrocan product although even this is not the entire picture. All one needs to do to distribute the drug is to have a general narcotics license (not a cannabis license specifically). This means, predictably also that there will be a shakeout in the entire landscape – and in the works now. The larger producers have established a bulwark with both flower and extract. But the only way to survive, as the most nimble of the distributors have already discovered, is to source product from several different international supply chains.

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