Contributed By CMS Germany
There are several primary laws and regulations that govern practices regarding cannabis in Germany. In the following, the authors will summarise the main legislation that is applicable for the different product types.
In relation to all cannabis products, the regulations of the German Narcotics Act (Betäubungsmittelgesetz, BtMG) must be observed.
Cannabis, defined in the BtMG as “marijuana, plants and parts of plants belonging to the genus cannabis”, is listed in two annexes in the BtMG.
First, cannabis is listed in Annex I that includes narcotics that are generally not marketable and cannot be prescribed (Annex I BtMG); excluded are:
The exemptions also apply to preparations made from these plants and parts of plants if the above conditions are fulfilled.
Second, cannabis for medical purposes is listed in Annex III that includes narcotics which are marketable and can be prescribed.
The only cannabinoid included separately in the BtMG is tetrahydrocannabinol (THC), which is listed several times in Annex I and once in Annex II, depending on its exact composition. On the other hand, pure cannabidiol (CBD) is currently not included in the BtMG.
German Narcotics Act
Up until a major legislative reform in 2017, cannabis was only listed in Annex I BtMG and was therefore not marketable and could not be prescribed. Patients could get cannabis only in exceptional cases and could not receive any reimbursement by health insurers. Since 2017, the BtMG also lists cannabis in its Annex III (see above) which contains those narcotics that can be marketed and prescribed in Germany.
Only physicians can prescribe narcotics listed in Annex III (see Section 13 BtMG).
According to Annex III BtMG, medicinal cannabis is only admissible if it stems from a cultivation under state control in accordance with the UN Single Convention on Narcotic Drugs and in preparations that are authorised as finished medicinal products.
Anyone who cultivates, manufactures, trades, imports, exports, delivers, sells, otherwise places on the market, acquires or sells narcotics without trading in them requires a general licence according to Section 3 BtMG. In the case of an import to Germany according to Section 11 (1) BtMG, a further permission must be obtained for each individual delivery.
Social Security Code
Pursuant to Section 31 paragraph 6 of the German Social Security Code Vol 5 (Sozialgesetzbuch Fünftes Buch, SGB V), patients can receive reimbursement from public health insurers under certain circumstances.
Section 31 paragraph 6 SGB V regulates that patients with a serious illness (eg, chronic pain, multiple sclerosis, epilepsy, nausea and vomiting after chemotherapy, and appetite enhancement for HIV/AIDS patients) who are insured with a public health insurer have the right to receive (i) cannabis in the form of dried blossoms or extracts, (ii) finished medicinal products with cannabis, and (iii) medicinal products with the active ingredient Dronabinol or Nabilon, if:
German Medicinal Products Act
Besides the BtMG, the most important statute for medicinal cannabis is the German Medicinal Products Act (Arzneimittelgesetz, AMG) which governs the movement of medicinal products in the interest of the proper and safe supply of medicinal products to humans and animals. The AMG covers the manufacturing and trade of medicinal cannabis within Germany and imports from EU countries, as well as third countries, including the requirements of the manufacturing practice in accordance with the EU GMP (“Good Manufacturing Practice”) rules.
The following licences are relevant for the handling with medicinal cannabis:
In the case of cannabis that has been treated with ionising radiation to reduce germ count, the Ordinance on Radioactive Medicinal Products or Medicinal Products Treated with Ionising Radiation (AMRadV) must also be observed.
Besides the general rules of the BtMG, for so-called “lifestyle products” (often containing CBD), a distinction must be made between different categories such as:
Food, animal feed and cosmetics law is largely harmonised European law and therefore applies in all EU countries as a matter of priority. The most relevant legislation in this field are:
CBD smoking/vaping products that do not contain tobacco or nicotine are considered “herbal products for smoking” and fall within the “tobacco-related products” regulated within the German Tobacco Products Act (Tabakerzeugnisgesetz, TabakerzG).
Various regulatory authorities are involved in the cannabis sector. The main authorities responsible for enforcing the laws and regulations for medicinal cannabis and general cannabis (industrial hemp, CBD, etc) are listed as follows.
German Federal Institute for Drugs and Medical Devices (BfArM)
The BfArM is an independent federal higher authority within the portfolio of the Federal Ministry of Health and is responsible for medicinal products and devices. In relation to cannabis the following two agencies of BfArM are of most importance.
The Federal Opium Agency (Bundesopiumstelle)was established in 1952 as a result of the International Opium Convention of 1912. It is responsible for the issuing of licences in the traffic of narcotics and/or precursors.
Following the BtMG reform and in line with the UN Single Convention on Narcotic Drugs, the German Federal Institute for Drugs and Medical Devices (BfArM) created a Cannabis Agency (Cannabisagentur) that is responsible for the control and monitoring of the cultivation of cannabis for medicinal purposes in Germany. All authorised cultivators have to sell all of their crops of cannabis to the Cannabis Agency. The Cannabis Agency will purchase and take possession of the produced cannabis. Further, the Cannabis Agency will sell the medical cannabis to producers of medicinal products, pharmaceutical wholesalers or pharmacists and will therefore define a sales price.
State authorities responsible for medicinal products
The individual state authorities are responsible for the general enforcement of the German Medicinal Products Act. This concerns, in particular, the granting of wholesale and import licences.
German Federal Office of Consumer Protection and Food Safety (BVL) and respective state authorities
The BVL is involved in the co-ordination of official food, animal feed, cosmetics and smoking products monitoring between the federal states.
The state authorities enforce the respective law within their own states.
German Federal Office for Agriculture and Food (BLE)
The BLE is responsible for the import regulations from third countries, the cultivation notification for industrial hemp and the implementation of THC controls in hemp cultivation.
Decisions by the German authorities can be reviewed by administrative courts upon application.
There are several German and European industry associations which cover cannabis-related topics, for example:
These industry associations are directed to different companies and interest groups and pursue different topics, such as the legalisation of recreational cannabis or setting standards for cannabis quality.
There are several challenges that market participants in the cannabis sector face and have to consider when establishing their business models.
The key challenges may be summarised as follow.
Lengthy and Complex Approval Processes
Changing Legal Environment and Lack of Experience
Since 2017, the cannabis sector has undergone a huge transformation and has taken on enormous importance in the market. The regulations for some product categories remain unclear, or simply missing, making it difficult for the authorities to issue clear recommendations and thus create legal certainty for market participants.
Due to the still relatively new subject matter, many of the involved authorities on the state level have not yet fully established a reliable administrative practice and are often hesitant to issue statements or make clear decisions.
Enforcement Differs from State to State
The interpretation and enforcement of cannabis-related legislation and regulations may differ widely from state to state, depending on experience and political priorities. It is therefore essential to choose the right location for a cannabis business.
High Requirements for Cultivation in Germany
Companies that would like to cultivate cannabis in Germany face different challenges, making it hard for German cultivators to compete with foreign cultivators. Three of the key challenges are listed below.
Difficulties in Establishing Brand Recognition for Medicinal Cannabis
In Germany, with the exception of very few authorised finished medicinal products, medicinal cannabis is mainly dispensed by pharmacies as a so-called magistral formulation – ie, the flowers and extracts must be "prepared" for the patient in the pharmacy in accordance with the prescription presented and made available to the patient in the correct dosage form.
As a result, the product packaging originally branded by the manufacturer does not reach the end consumer, which poses challenges to building recognition in the market.
The current regulatory regime has been developed and refined substantially since 2017. Major aspects of the cannabis business are now covered by legislation and/or regulations. However, some relevant questions still need to be further addressed and a respective administrative practice needs to be established. Court decisions allow for more and more guidance, in particular in the growing CBD business.
Due to the cannabis industry still being relatively new in Germany, there are several legal risks that need to be considered by companies who would like to engage in the cannabis business, including the following.
Lack of Legal Certainty
The legal landscape, both in Germany but also on the EU level, is constantly changing, so one of the major legal risks at the current time is a lack of long-time certainty. It may very well happen that an assessment of the legality of a certain products changes in the course of only a few months. This is of particular relevance to “newer” product categories that do not fall within the clearly defined traditional product categories – for example, do CBD chew pouches fall within the food law? However, the classification of a product (eg, as a cosmetic, a general commodity or food) is essential for the marketability of such a product.
Particularly in the CBD sector, companies too often run the risk that their product will not be classified under the exemption of Annex I BtMG, since authorities/courts rule that misuse for intoxication purposes cannot be ruled out. Based on that determination the product will be classified as a narcotic that cannot be marketed and the involved persons face significant criminal charges for illegal trade with narcotics. Even though there is now some German and EU case law on the subject, there is still a degree of legal uncertainty when abuse for intoxication purposes is affirmed.
Seizure of Revenues
In case authorities consider that a criminal offence has been committed in connection with the cannabis business of a company, it is possible that revenues from such cannabis business will be seized – in some cases, this may be the turnover of this company.
In relation to the enforcement of the legislation, it is important to distinguish between criminal and administrative offences as well as violations of unfair competition law.
There are several criminal law regulations in connection with cannabis, such as the following.
The competent authorities for enforcement of criminal offences are the public prosecutors.
The competent local authorities verify whether cannabis products are in compliance with regulatory legal requirements. If not, the authorities can order a sales stop. They can also order administrative penalties in many cases.
Competitors and Consumer Association
In Germany, complaints about products that are not compliant with the legal requirements or about unfair advertising claims are often brought by competitors and consumer associations. It is common that competitors or consumer associations apply for a court injunction which includes a cease-and-desist obligation. This means, for example, that products can no longer be marketed and may even have to be recalled.
There is no fully harmonised legal landscape within the EU in relation to medicinal cannabis, which leads to different rules within the EU member states. This can lead to various cross-jurisdictional issues. In Germany, this is particularly noticeable in connection with the import of medicinal cannabis from third countries outside of the EU.
In relation to the import of medicinal cannabis from third countries, the biggest challenge for the manufacturers in third countries is to obtain an EU GMP certification so that an import to the EU would be possible.
Some countries have concluded Mutual Recognition Agreements (MRAs) with the EU. Upon successful completion of the equivalence assessment or preparatory phase provided for in some MRAs, during which the parties evaluate each other's GMP inspection systems, inspections are considered mutually recognised. Even if an MRA is in place, it needs to be carefully evaluated for each country whether the MRA also includes cannabis because the scope of the agreements varies.
In all other cases, third-country inspections must be carried out by an authority authorised in Europe. In Germany, the third-country inspection is a quite lengthy process as the GMP inspectors have to travel to the manufacturing sites for a third-country inspection. In addition, the third-country inspections are currently significantly stalled due to the ongoing COVID-19 pandemic.
However, the strict EU GMP rules are not applicable in the case the cannabis products are classified as an API instead of a medicinal product. This classification needs to be confirmed by the authority of the country of origin with a written confirmation and, in addition, the German authority needs to have the same classification for the product to be imported. As the import licence falls within the competence of the individual states, the classification also differs within Germany. Some state authorities allow for cannabis flowers to be imported as an API (ie, no EU GMP certification is necessary), while others classify cannabis as medicinal products and prohibit the import until the manufacturing site has been EU GMP-certified.
So far, German authorities have allowed imports of cannabis from the following jurisdictions: the Netherlands, Portugal, Uruguay, Australia, Spain, Israel and Colombia.
In relation to medicinal cannabis, several legal elements have to be considered that affect the access to it.
Only a physician can prescribe cannabis or finished medicinal products with cannabis (see Article 13 paragraph 1 sentence 1 BtMG). However, many physicians are still reluctant to prescribe cannabis. This is, inter alia, caused by the persistent stigma of cannabis as a recreational narcotic. Furthermore, physicians often have a lack of knowledge about the prescribable cannabis products and possible effects.
Few Medical Studies
Apart from authorised finished medicinal products containing cannabis, such as Sativex®, there are few serious medical studies about the effects of cannabis products on serious diseases.
Reimbursement Depends on Health Insurer
As outlined under 1.1 Source of Regulations, patients with a serious illness can, under certain circumstances, get reimbursed by their public health insurer. However, when medicinal cannabis is prescribed for the first time, the patient has to ask for the health public health insurer’s approval. Although this approval can only be refused in justified exceptional cases, it is still a bureaucratic burden that often leads to a delay for patients.
Foods containing CBD are currently on the rise, and therefore the subject is much discussed. However, foods containing cannabinoids are not currently marketable in Germany due to the following reasons.
Food Containing Cannabinoids Is Considered “Novel Food”
In Germany, food and food supplements with CBD are currently classified as "novel food" and therefore are not marketable without a corresponding authorisation.
Pursuant to the Novel Food Catalogue of the European Commission, extracts of Cannabis sativa L. and derived products containing cannabinoids are considered novel foods as a history of consumption (before 1997) has not been demonstrated. This applies to both the extracts themselves and any products to which they are added as an ingredient (such as hemp seed oil). It further applies to extracts of other plants containing cannabinoids and synthetically obtained cannabinoids.
German case law and authorities have often confirmed the classification of food and food supplements that contain the cannabinoid Cannabidiol (CBD) as novel food, as briefly summarised below.
Food Containing Cannabinoids Can Fall under the BtMG
Food and food supplements are not marketable in Germany in case they are considered narcotics pursuant to the BtMG.
CBD itself is not listed as a narcotic in the BtMG. Many products containing CBD include CBD extracts that derive from the whole cannabis plant. In general, German courts and authorities classify these CBD extracts as parts of cannabis plants according to the definition of “cannabis” in the German Narcotics Act. If there are any THC residues in the food product, it has to be reviewed whether the exception of Schedule I of the BtMG for cannabis applies (see 1.1 Source of Regulations).
Low THC content
The THC content of the food product may not exceed 0.2%.
For a long time, a major hurdle for CBD products containing trace THC has been that CBD is only exempt from narcotics law if the CBD product has a mere commercial purpose. German legal literature, many authorities and almost all lower criminal courts in Germany have argued that such commercial purpose must also be present with the end user (ie, the consumer). According to this view, products derived from the cannabis plant that can be ingested by the end user can never pursue a commercial use.
In a recent landmark decision, the German Federal Court of Justice (Bundesgerichtshof, BGH) has ruled that this interpretation is too narrow and not compatible with the intention of the legislator. Rather, it is sufficient that only one of the participants in the commercial transaction sells a product to an end user with a commercial purpose (decision of 21 April 2021, 6 StR 240/20). According to the BGH, no other rules apply to food.
No misuse for intoxication purposes
However, another hurdle is the question of misuse of the CBD product for intoxication purposes. The BGH has confirmed in its recent decision that an abuse of the food product derived from the cannabis plant for intoxication purposes must be excluded for all possible uses for the product. Therefore, the BGH confirmed the previous decision of the regional court according to which hemp tea with a THC content under 0.2% can be a classified as a narcotic if the dried plant parts could also be used for baking cookies. According to the expert opinions issued in the court proceedings, it is possible with a skilful baking process to make the THC usable for intoxication purposes.
It is not clear yet what impact the judgment of the European Court of Justice from 19 November 2020 (C-663/18) will have on the German jurisprudence. In a French criminal case, the ECJ ruled that CBD is not a narcotic, even if a CBD preparation is contaminated with THC but the THC content does not exceed 0.2%. Therefore, it remains to be seen whether the previous assessment of German authorities – that cannabis with a THC content of less than 0.2% is not a narcotic drug only under the additional condition that a misuse for intoxication can be excluded – will be upheld considering the primacy of European law.
The recreational use of cannabis is not permitted in Germany, but there are discussions about future decriminalisation or recreational regulation.
Recreational Regulation Is an Election Topic in 2021
In preparation for the September 2021 federal elections in Germany, many parties have included positions on cannabis policy in their election manifestos. Four of Germany's largest parties envisage a significant liberalisation. These range from regional model projects for the testing of regulated dispensing to legal dispensing in licensed specialist shops and pharmacies throughout the country. What all programmes have in common is that legal dispensing should only be possible to adults.
Governing Conservative Party Rejects Liberalisation
However, the current governing Conservative Party (Christlich Demokratische Union, CDU) – as well as the current drug commissioner of the federal government – have so far rejected the idea of legalisation of cannabis for recreational use.
It remains to be seen whether the legalisation of cannabis will continue to be an issue after the election and which approach will eventually prevail.