Germany relaunches tender effort
Positioned to be Europe’s key medicinal market
TORONTO • A week after cancelling its first cannabis tender, the German government is once again inviting marijuana growers to apply for the country’s first legal cultivation licences.
On Friday, Germany’s Federal Institute for Drugs and Medical Devices (BfArM) put out a call for 10,400 kilograms of medical cannabis, to be grown in-country over the next four years. The government expects to award contracts in the first half of 2019.
Like the last tender, which was cancelled after a year of lawsuits and delays, the bid is expected to attract significant attention from Canada’s experienced and deep-pocketed marijuana growers, many of whom have bought or partnered with German companies.
Germany legalized medical marijuana in the spring of 2017. With a large population, rapidly growing patient count and robust public health insurance coverage, the country is widely expected to become Europe’s key medical marijuana market.
A handful of Canadian firms already ship product to pharmacies in Germany, and many others are working to have their growing facilities certified for export to the European Union.
When the previous tender was issued more than a year ago, 118 companies applied. It’s believed that fewer than 10 made it through to the second stage of the bid, including several large Canadian licensed producers and their German subsidiaries.
The tender stalled last fall, however, when several companies that had not made the shortlist sued the government, claiming BfArM had mishandled the procurement process. In March, a Dusseldorf court ruled in favour of one of the companies and halted the process. BfArM officially cancelled it in July.
“This is a very positive thing because it should be a much more transparent process this time, to be frank,” said OrganiGram Holdings Inc. chief executive Greg Engel, speaking after the first bid was cancelled.
The new tender, calling for 10,400 kilograms, is larger than the previous one, which had sought 6,600 kilograms. BfArM is looking for at least three suppliers, although it has not put a cap on the number of licences it may give out.
The maximum amount a single company could produce under the contract is 1,000 kilograms a year — a small amount by Canadian standards, where large licensed producers are already growing thousands of kilograms of marijuana a month.
Securing a licence to cultivate in-country, however, could position companies to take advantage of an expanding market and the potential future liberalization of German cannabis laws.
After all, many of Canada’s most prominent legal cannabis players — such as Canopy Growth Corp., Aphria Inc. and MedReleaf Corp. — received their licences back in 2014 under a more limited medical marijuana licensing regime, before the Liberal election and promise of recreational legalization.
The companies that made the German shortlist during the last bid process seem well placed to succeed again. They will, however, face increased competition from growers that didn’t meet shortlist requirements last summer but may this time around.
“We would expect that certainly there’s more (competition),” said Engel. On top of companies from the Netherlands, Israel and Canada, “you could see companies out of Latin America participating,” he added.
Companies have until Oct. 22 to submit their applications.