Medical Cannabis & Cannabinoid Regulation 2021 Comparisons

Last Updated June 15, 2021

Contributed By CMS Germany

Law and Practice

Authors



CMS Germany is one of the largest German law firms and forms a part of CMS Legal, a global firm with 77 offices in 43 countries and over 4,800 lawyers. CMS Germany is recognised as having a strong focus on the life sciences and healthcare sector, with important teams in Hamburg, Cologne and Düsseldorf. The life sciences team in the Hamburg office consists of 20 lawyers, with specialists in the areas of regulatory, product liability, drug advertising, co-operation agreements, IP, compliance and reimbursement. The Hamburg team has had a strong focus on cannabis law since the legalisation of medical cannabis in 2017. This expertise includes advice on regulatory and strategic issues in connection with German/EU market entry as a supplier of medicinal cannabis and the set-up of prescription (RX) cannabis businesses in Germany. In this context, CMS offers full-circle advice for cannabis clients, including structuring and negotiating transactions and co-operations in the field. Furthermore, the team regularly advises on regulatory issues regarding food, animal feed, smoking/vaping products and cosmetics containing CBD.

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.

General

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:

  • cannabis seeds, provided that they are not intended for unauthorised cultivation;
  • cannabis that originates from cultivation in the EU with certified seed varieties that are listed in Article 9 of Commission Delegated Regulation (EU) No 639/2014 of 11 March 2014 supplementing Regulation (EU) No 1307/2013 of the European Parliament and of the Council establishing rules for direct support schemes for farmers under common agricultural policy support schemes and amending Annex X to that Regulation (OJ L 181, 20.6.2014, p 1, L 181, 20.6.2014, p 1), or:
    1. whose tetrahydrocannabinol content does not exceed 0.2%; 
    2. their marketing (other than cultivation) is exclusively for commercial or scientific purposes;
    3. their misuse for intoxication purposes can be precluded;
  • if they are planted as protective strips in beet cultivation and destroyed before flowering.

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.

Medicinal Cannabis

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:

  • a generally accepted standard therapy –
    1. does not exist, or
    2. in particular cases does not apply according to the justified assessment of the treating doctor, considering expected side-effects and the disease status of the insured patient;
  • there is a reasonable possibility that the cannabis will have a positive effect on the disease process or on serious symptoms.

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:

  • manufacturing authorisation – every manufacturer of medicinal products needs to apply for such authorisation, pursuant to Section 13 AMG;
  • marketing authorisation – finished medicinal products may only be placed on the German market, if they have been authorised by the competent German authority or if they are authorised centrally by the EU, pursuant to Section 21 AMG;
  • wholesale authorisation – any person who engages in the wholesale trading of medicinal products requires an authorisation to do so, pursuant to Section 52a AMG;
  • import authorisation – in case medicinal cannabis will be imported from outside the EU, an import authorisation, pursuant to Section 72 AMG is required.

Ionising radiation

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.

Lifestyle Products

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 and animal feed;
  • cosmetics; and
  • smoking/vaping products (not containing THC).

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:

  • German Food and Feed Code (Lebensmittel-, Bedarfsgegenstände- und Futtermittelgesetzbuch, LFGB);
  • General Food Law Regulation (EC) 178/2002;
  • Novel Food Regulation (EC) 2015/2283;
  • Regulation (EC) 767/2009 on marketing feed;
  • Regulation (EC) 1831/2003 on feed additives for use in animal nutrition;
  • Catalogue of Feed Materials (EU) 68/2013 and (EU) 2017/2017;
  • EU Cosmetics Regulation (EC) 1223/2009.

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.

Medicinal Cannabis

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.

Lifestyle Products

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:

  • the German Hemp Association (DHV);
  • the Branch Association Cannabis Economy (BvCW);
  • the Working Group on Cannabis as Medicinal Product e.V. (ACM);
  • the Federal Association of Pharmaceutical Cannabinoid Companies (BpC);
  • the International Association for Cannabinoid Medicines (IACM);
  • Medical Cannabis Europe;
  • the Federal Association of the Pharmaceutical Industry (BpI); and
  • the European Industrial Hemp Association (EIHA).

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

  • The tender process for cultivation proved to be a drawn-out process that needed to be repeated due to errors in the initial tender.
  • The timeline of the approval process for licences on state level can differ in every German state.
  • Certifying manufacturing sites under the EU GMP rules, in particular in third countries, is a very lengthy process.
  • The approval process of CBD as a novel food has already been going on for several years.

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.

  • Only companies that were authorised by the German Cannabis Agency in a bidding process are allowed to cultivate cannabis in Germany. In April and May 2019, the Cannabis Agency awarded the contract for the cultivation, harvesting and processing of cannabis for medical purposes for a total of 10,400 kg for four years. The winners are Aphria, Aurora (both Canadian companies) and Demecan (a German company).
  • The cultivation premises must be highly secured so that unauthorised access can be excluded.
  • Due to the unfavourable weather conditions in the country, the cultivation of cannabis indoors needs a lot of energy which makes the production costly.

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.

Criminal Liability

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.

Prosecution Authorities

There are several criminal law regulations in connection with cannabis, such as the following.

  • The Narcotics Act: according to Section 29 BtMG, anyone who cultivates, produces, traffics in, imports, exports, sells, dispenses, otherwise puts into circulation, acquires or otherwise obtains narcotics without permission can be punished with imprisonment up to five years or a monetary penalty. This also applies for the advertising for narcotics.
  • The Food Law: pursuant to Section 1a (1) NLV in conjunction with Section 59 (3) No 2 of the German Food, Commodities and Feed Act (Lebensmittel-, Bedarfsgegenstände- und Futtermittelgesetzbuch, LFGB), anyone who, contrary to the Novel Food Regulation ((EU) 2015/2283) places a novel food on the market without having the corresponding authorisation can be punished with imprisonment up to one year or a monetary penalty.
  • The Medicinal Products Act: according to Sections 95 paragraph 1 No 4, 45 paragraph 1 sentence 2 AMG, it is forbidden to trade with prescription medicinal products outside pharmacies. These can in particular apply in case CBD lifestyle products are advertised as medicinal products.

The competent authorities for enforcement of criminal offences are the public prosecutors.

Regulatory Authorities

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.

Untrained Physicians

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.

  • Several administrative court decisions considered CBD-based food as novel food.
  • The Federal Government of Germany and the Federal Office of Consumer Protection and Food Safety (BVL) have both stated that they are currently not aware of any cases in which CBD products would be marketable as food. From the BVL's point of view, either an application for authorisation of a medicinal product or an application for authorisation of a novel food must be submitted for ingestible products containing CBD before they are placed on the market. Within the framework of these procedures, the safety of the product must be proven by the applicant.
  • Novel Foods are only marketable after prior authorisation by the European Commission and an addition to the so-called Union List, in accordance with Article 10 ff. Novel Food Regulation. So far, the European Commission has not authorised any food or food supplements containing cannabinoid. Foodstuffs containing cannabinoid are therefore not yet marketable in the light of the requirements of the Novel Food regime.
  • Many local authorities have recently acted forcefully against companies that are selling food and food additives containing CBD. Products in some cases had to be taken off the shelves and administrative proceedings have been started. However, as pointed out above, enforcement priorities often differ from state to state.
  • Some consumer or trading organisations have successfully brought claims for cease-and-desist against CBD food businesses in civil courts.

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%.

Commercial purpose

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.

Further Development

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.

CMS Germany

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Law and Practice in Germany

Authors



CMS Germany is one of the largest German law firms and forms a part of CMS Legal, a global firm with 77 offices in 43 countries and over 4,800 lawyers. CMS Germany is recognised as having a strong focus on the life sciences and healthcare sector, with important teams in Hamburg, Cologne and Düsseldorf. The life sciences team in the Hamburg office consists of 20 lawyers, with specialists in the areas of regulatory, product liability, drug advertising, co-operation agreements, IP, compliance and reimbursement. The Hamburg team has had a strong focus on cannabis law since the legalisation of medical cannabis in 2017. This expertise includes advice on regulatory and strategic issues in connection with German/EU market entry as a supplier of medicinal cannabis and the set-up of prescription (RX) cannabis businesses in Germany. In this context, CMS offers full-circle advice for cannabis clients, including structuring and negotiating transactions and co-operations in the field. Furthermore, the team regularly advises on regulatory issues regarding food, animal feed, smoking/vaping products and cosmetics containing CBD.