Aphria, Wayland face challenge over German marijuana cultivation contracts

Just Released! Get realistic market forecasts, state-by-state insights and benchmarks with the new 2024 MJBiz Factbook member program, now with quarterly updates. Make informed decisions.

Photo by Stefan Widua on Unsplash

Germany’s efforts to get domestic medical cannabis cultivation up and running took another step forward Wednesday, as the German Federal Institute for Drugs and Medical Devices (BfArM) confirmed the winners of nine of the 13 available lots for the first round.

Four of the lots – granted to Aphria and Demecan in the preliminary results – were challenged by an unsuccessful applicant, according to a BfArM news release.

Graham Farrell, vice president of communications for Wayland Group – a joint venture partner with Demecan – downplayed the challenge.

“The company believes that our concept is clearly superior to that of the parties challenging the award to Demecan, and we don’t believe there is merit to their complaints,” he told Marijuana Business Daily.

In a news release, Wayland said the company received 100 points out of a possible 100 on its application – 60 for quality and 40 for price.

BfArM did not provide a timeline for when the final lots might be granted and said in the news release it would not provide further comment about the petition for review.

The agency confirmed that five lots were granted to the German subsidiary of Aurora Cannabis and four to Aphria’s German subsidiary.

The first harvest from domestic production is expected at the end of 2020, with imports fulfilling all the demand until that point.

Imports will also be allowed after the first harvest, as demand is expected to exceed domestic supply.

Once all 13 lots are granted, total cultivation in Germany will be 10,400 kilograms over a period of four years, or 2,600 kilograms per year.

Under the terms of the grant process, Aurora will be responsible for cultivating 1,000 kilograms annually during that period.

If the disputed lots are resolved in favor of the initial selections, Aphria also would produce 1,000 kilograms each year, and Demecan would be granted permits for 600 kilograms per year.

In 2018, roughly 2,845 kilograms (6,272 pounds) of medical cannabis were sold in Germany, according to MJBizDaily’s new report, Medical Cannabis in Europe. That’s more than double sales in 2017 and more than in the rest of Europe combined.

None of the winning bidders disclosed the price at which they will sell the domestically produced cannabis, but because of the way the application process was structured, there was a high incentive to offer a low price.

Alfredo Pascual can be reached at alfredop@mjbizdaily.com