API Confusion and Lack of Regional Standards: Issues On The Road To The German Cannabis Market

Germany is the top target market for cannabis companies globally, but where your cultivator or distributor is located, especially in the realm of API standards, can make all the difference.
The Road to The German Cannabis Market: API Confusion, Lack of Regional Standards

Destination Germany is the watchword for those in the international cannabis industry—but it is still a rocky path to gaining access for most. Specifically, there is a lot of confusion surrounding API and cannabis classification and issues from a lack of consistent standards.

One of the most intriguing aspects of the process currently is how flower is categorized (especially for imports) once it gets to the country. For a country of rules, this is surprisingly all over the place right now. There is no one single answer—which rules apply depend on both the regulatory requirement at point of cultivation as well as distribution (on a state, not federal, level).

This can also be frustrating even within Germany and the EU—namely because of a lack of homogeneity still, that exists in the treatment of cannabis flower—both within the region and at a sovereign level. This is especially true where pharmaceutical guidelines cross those for irradiating anything bound for consumption by consumers. 

According to the most recent data available, the vast majority of irradiated food within the EU is frozen frogs legs (at 65.1%). The second, at just over a fifth of the market, is poultry. And the third is for dried aromatic herbs, spices, and vegetables (at 14%). According to data from the European Commission, this sterilizing process is also on the decline for food at least, although Belgium is the EU state with the most irradiation regulations.

Which Regulation Applies (And Where?)

Cannabis, of course, falls right within this wide and so far unaddressed gap in regulatory oversight if not procedures both on every level.

Here is the easiest reason to understand why this is the case in just one country. Cannabis is regulated, from the perspective of a German distributor, on an international level (UN conventions), the European Union (under which GMP directives fall), German federal law (which regulates narcotic drugs), and state level directives, which impact medicinal products. 

Along the way, normalization is also exposing very strange overhangs from Prohibition. In Germany, this starts with the strange and often unexplained categorization of the cannabis plant into two categories—as an API or as an actual pharmaceutical bulk product. If it is an API, chances are it has also not necessarily been irradiated, as the raw plant is also a potential “foodstuff” as well, especially because of the general prohibitions on radiation and food in the country as well as across the EU.

But what does this mean and why is it important as cannabis firms begin to plot their German rollout strategy?

According to Benedikt Sons, CEO of Cansativa, a leading licensed medical cannabis distributor in Frankfurt, “It is important to understand that the regulation of medical cannabis flowers can vary on state level. Some states assess medical cannabis flowers as an API, others as medicinal product or a pharmaceutical.” 

Sons take on the issue is that he believes that cannabis cannot be regulated as an API but rather as a medical product. Given that Cansativa is the sole distributor for all cannabis cultivated in Germany, this may well be an indicator of which way the winds are blowing at a federal level at least aus Deutschland. “We believe that the stricter interpretation as a medicinal product and or pharmaceutical is more appropriate for medical cannabis flowers,” he said. 

This means that cannabis flowers must be radiated to meet medical standards. But herein lies the rub, if not the nexus of the debate and controversy.

What is the difference between an “API” and a Pharmaceutical Product?

The acronym API means something a bit different in the world of pharma than IT. The abbreviation stands for active pharmaceutical ingredient. It is the part of any drug that produces certain kinds of effects. For example, THC can ameliorate chronic pain. Therefore, in a cannabis environment, this means that plants are evaluated on specific cannabinoids (in the case of Germany presently, limited to both THC and CBD).

Production of APIs (which can be done either chemically or naturally) has traditionally been a core mandate and function of pharmaceutical companies. APIs differ from pharmaceutical products in that they are not “finished products.” Seen from this perspective, of course, medical cannabis flower (or flos) can be either an API or a finished medicine.

In Germany right now, particularly to outsiders, the difference between the two types of blüten (flowers) can be difficult to understand especially because repackaging occurs not only by distributors but also at point of sale—by the German pharmacies.

But this distinction also has had another impact—namely to ignite the conversation about radiation of the plant. 

Cannabis as Pharmaceutical Product or Active Pharmaceutical Ingredient?

Here is one example of how confusing this can be. Sons for example sees “many products in the market that are batch released and regulated as medicinal product or pharmaceutical but are not irradiated including by a manufacturer from North-Rhine-Westphalia (Germany’s most populous state).”  He does not see anything wrong with this practice.

Here is another. GMP distributors who are based in Bavaria have two options: they can import cannabis as an API or as a finished product. In other words they do have the option to import raw flower that has not necessarily been irradiated. Importers in most of the other 15 German states are required to import and distribute irradiated flowers only.

But here is the next strange wrinkle. Under EU law, flowers that are irradiated are also required to be marked as such. Generally, German law prohibits the distribution of irradiated product for food, although imported cannabis from Canada and the Netherlands in particular, has been required to be irradiated to reduce microbiological contamination.

Between the period 2017-2019, as the mold problems entered the market, there was quite a lot of non-irradiated cannabis that reached patients via pharmacies. Indeed, several cultivators had product withdrawn from the market in the fall of 2019 because of the change in the law to try to address this problem. 

According to Rainer Krüger, a leading GMP consultant in Germany, this is an issue of basic science as well as common sense. “In the field of prescription medicines (dried cannabis flowers) we have the problem of microbiological contamination, for example by mold. Due to this situation, these products must be sterilised, or germ reduced. This process is used for the sterilisation of medical products and foodstuffs such as spices. I see this process as critical and have similar views on alternative germ reduction processes as some state authorities and representatives of cancer organisations.”

Implications for The Industry

This strange wrinkle is just one of many that has plagued those on the ground who are searching for a way through the still-resolving and often conflicting thicket of regulations.

From Krüger’s perspective at least, the answer is clear as not only a consultant coming to cannabis from the world of big pharma but also as one of the founders of the European Cannabis Association, a lobbying group with the mission of bringing clarity about procedures and processes on a European level to the cannabis industry beyond his consulting practice. The issue of radiation and at what point in the production process it is applied, if not by whom, is a matter of quality and processing standards that fall within the clear mandate of GMP guidelines (global pharmaceutical production standards).  

“Processes have to be developed along with clear standards (about the treatment of cannabis) as well as the establishment of procedures along the supply chain,” he said. A major goal of the ECA is to help authorities develop what Krüger calls the “European Cannabis Act” to give producers and patients more clarity. “It would certainly minimise interpretation problems and focus on quality.”

No matter how sensible this approach may sound from a pharma perspective, however, this approach is not without controversy, particularly as the conversation veers towards edibles, and of all kinds. 

Radiation of plants is not a popular topic either within the industry itself or within Germany itself.

That said, given the massive problems in the ground already faced by the industry (including moldy product being delivered through the chain to patients), as well as the need to produce to high pharma standards, the conversation in Germany about streamlining the procedures and requirements required of all cannabis is likely to have a big one—not only in the country itself, but by all producers with product entering the market, as well as the rest of the supply chain they use.

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