On the Defining Edge of a New Market: The New German Cannabis Distributors
As medical cannabis distribution moves into its next phase in Germany, a new breed of specialty pharmaceutical grade distributors have begun to dot the landscape. They don’t resemble anything like their U.S. and Canadian counterparts. This is a look at three of them.
The German medical cannabis market that has evolved since 2017 when the law formally changed to mandate that public health insurance cover medical cannabis, is a very different beast than any that have come before it. Starting with the fact that on the medical side, those who grow and distribute as well as dispense the plant and medicines derived from it, must be certified at a high, formal, federal, level before they can become part of the pharmaceutical supply chain.
While a great deal of attention has been focused on who might cultivate cannabis auf Deutschland, most people, certainly outside the industry if not the country, know very little about one of the other critical components to all of this—namely the regulated, GMP licensed, cannabis-specialty distributors.
GMP stands for Good Manufacturing Practice—and is a global standard for production as well as the additional hops along the supply chain. The terms and procedures for qualification of all processes, including drying, processing, extraction, and distribution may sound new in the cannabiz, but they are used routinely in the wider pharmaceutical industry. These standards are also the ones that must be met for the cannabis produced and distributed for medical consumption across Europe.
The German standards for EU GMP are also considered the toughest in Europe.
What makes the accomplishments of all of the German firms now in this space even more remarkable is that all of them are start-ups. All of them have also bootstrapped their way through financing, strange and changing regulation, and meeting the standards of BfArM, the federal German version of the American FDA who plays referee as well as issues licenses to operate.
However, they have already and will continue to play an outsized if not critical role in the entire medical cannabis discussion. Starting with the fact that if you do not work with them, or firms like them, you cannot bring your cannabis into the country for legitimate medical sales.
There is no “shortcut” here for a producer, for example, to sell direct to a pharmacy.
As of 2021, there have been untold licenses actually issued by BfArM (the rumour is that it had reached 80 last year, at the average cost of €1 million each to set up properly). Beyond the paper shuffling however, are firms who are now in operations, with fully fledged logistics and distribution that meets the high standard of the medical market in Europe.
Drapalin Pharmaceuticals, Munich
Founded by three childhood friends from Ukraine, Drapalin is one of the few firms in the business to have a female CEO (Lana Korneva). She along with the Garev brothers founded the company in 2018.
Since then, Drapalin has begun to carve out a niche for itself in the state market of Bavaria. Bayern, as it is pronounced auf Deutsch is known generally to be the “most conservative” German state for a number of reasons, starting with its religious and costumed annual celebration of Oktoberfest. Beyond beer brewing however, the southern German state also has the distinction of having one of the highest numbers of legal cannabis patients in the country—but also some of the harshest laws on the books for prosecuting “illegal” use.
As a result, it should come as no surprise that Bavaria also has some of the most restrictive rules for the handling of narcotics to begin with. Establishing a highly regulated start-up in this environment is like few other industries, including early stage fintech firms. There are major and immediate penalties for getting things wrong. You cannot just “misplace” a few grams.
The firm has also been one of the more innovative in looking for new sources of GMP-grade flower and is starting to import medical cannabis from three continents into Germany.
Based on materials of hightimes.com
