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Sven-Roger von Schilling, Grünhorn Group:

Germany: “Cultivation clubs will initially attract many members, but the challenges will soon be realized”

Last week, on July 1st, the application process for the German cannabis cultivation clubs officially started. So what can the market expect from the upcoming clubs? "I don't have high expectations for the cultivation clubs," says Sven-Roger von Schilling, CFO of Grünhorn Group. "They must comply with German association laws, which require the clubs to be managed by one or more board members who are personally liable for compliance with all relevant regulations. Given the stringent quality regulations and the potential for clubs to have up to 500 members, the personal liability risk is substantial. I believe that once the first personal liability cases emerge, many board members will reconsider their positions and resign, making it difficult to find new board members." According to Sven, the biggest challenges will be navigating German bureaucracy and ensuring compliance with all the regulations for cultivation clubs.

Sven-Roger von Schilling

"The challenges will soon be realized"
Sven thinks that initially, social clubs will attract many members. "However, they will soon realize that membership can be expensive, participation in club work is required, and there will likely be significant fluctuations in the quality of the cannabis grown," he says. "I believe that members will find it more convenient to obtain high-quality medical cannabis from specialized online pharmacies, which are not more expensive than street prices. It's similar to the difference between buying professionally produced beer and brewing your own."

On top of those challenges, many federal states have only recently designated responsibilities, Sven says. "The allocation of cultivation licenses and the oversight of Cannabis Social Clubs are federally regulated. Each of the 16 federal states can determine its own responsibilities. Some states have not even published these responsibilities by the deadline of July 1st. In the remaining states, the points of contact vary greatly; sometimes the Freiburg Regional Council decides on cultivation permits, while in Rhineland-Palatinate, it is the State Office for Social Affairs, Youth, and Supply. Therefore, it is up to the interested parties to navigate the bureaucratic chaos, which is not easy. Hopefully, there will be clarity soon."

An optimistic future
While the initial phase of implementing the new regulations has been challenging, Sven is optimistic about the future of the German market. "The demand for prescriptions has increased significantly in the first three months of the new legislation, and the number of our new patients has more than quintupled. Although there is sufficient high-quality medical cannabis available, capacity constraints in pharmacies are a bottleneck. Certain steps in the compounding process can only be performed by licensed pharmacists or pharmaceutically trained staff, and there is a shortage of pharmacists in the job market. At Grünhorn, we have disrupted this manual compounding process through automation, allowing us to become the market-leading German pharmacy for medical cannabis," he says.

Sven adds that Grünhorn is committed to ensuring that patients have access to high-quality medical cannabis and continues to innovate to meet the growing demand. "We look forward to working closely with regulatory bodies and other stakeholders to create a more efficient and effective system for everyone involved."

For more information:
Grünhorn Group