Green II: Spreading Like Kudzu

By Marguerite Arnold

Green II: Spreading Like Kudzu, is the inside story of the first ever German cannabis cultivation bid. Set against a socio-economic backdrop globally of massive change and certainly one of the most challenging periods of global history since WWII, cannabis reform by itself of course adds an extra strange twist if not spice to the mix.

Green is at first a business book. It begins with an overview of the economics of the industry itself, including fundraising tactics, and business history, including cannabis reform in other countries - like Canada - which has also played a huge role in the development of the European market - for good and for bad.

This begins with the story behind the first ever German cultivation tender bid itself, and the backstabbing power-play that broke out in Europe as highly leveraged Canadian pot companies, listed on North American exchanges via the controversial practice of "reverse IPOs" - in this case mining company shells - needed to raise capital fast. Patients controlled their right to cultivate their own crops in Canada at the Supreme Court and scandal after scandal involving pesticides and false accounting began to break.

This began with the fact that at first, until the first round of lawsuits cleared at a federal court in Düsseldorf in 2018, all German hopefuls for the right to grow medical cannabis (for German citizens covered under statutory health care), were excluded from participating in the tender at all. Of the final three winners, only one is ostensibly "German" and is the by-product of a very stranger merger/cooperation with a large public Canadian company to this day.

However, the story of the European industry is not just about the medical market (which itself is full of strange deviations from the pharmaceutical industry it is currently evolving into in some places). There is a culture, and a history which floats over all financial transactions and market corrections, let alone patient counts.

Green II, the second in a series, looks at some of the cannabis scented socio-economic gaps in what Europeans if not Germans believe to be comprehensive healthcare coverage that are quite terrifying. Indeed, add cannabis to the mix for the average chronically ill German patient, and the vaunted system begins to resemble the American system on steroids.

It is not as bad now here for patients as it used to be just a few years ago because of the first stages of reform. That said, it is very clear that there are still many miles, even legislatively, to go. Today, courses are now being taught on how to prescribe and administer cannabinoid medicines across Germany but they were almost non-existent even three years ago.

Green takes the reader on a journey into this world, at professional business and medical conferences across the country and across Europe during the time the bid was entering its final phases in 2019. The business and entrepreneurial stories of small start-ups not to mention the high jinks and less than business school tactics of publically listed pot companies are all a part the mix. From upscale conferences in London's famous landmarks and Berlin's most expensive hotels to the primitive conditions of a Polish medical cannabis safe house, Green II paints the backdrop against which political and economic reform around cannabis are clearly mixing with socio-economic factors and in thought-provoking ways.

Written for a lay audience (original in English), the book is the first to look at cannabis reform from several angles. This is the story of the first European (indeed federal tender of any kind) bid for European sanctioned cannabis, which is just reaching German pharmacies in the fall of 2020. However it is also one of the first books to look at "cannabis economics" including paths to financing as well as certification in what will be the world's most valuable medical cannabis market (Europe) and country (Germany).

• Language: English
• Publisher: Marguerite Arnold
• Release date: Nov 30, 2020
• ISBN: 9781005045951

Marguerite Arnold

Marguerite Arnold is a German-American author, journalist and entrepreneur. She has been covering the cannabis industry from Europe since 2014.Born in New York City, she grew up in the UK and has lived and worked in three countries (so far). These days she calls Germany home, after having just won her dual citizenship in a landmark Supreme Court case that addresses and overcomes systematic prejudice in the court systems since 1945 in implementing the historic Right of Return granted to all those who fled the Third Reich.In the United States, her career spanned film and documentary production of the digital kind and she pioneered the use of digital technology in both brick and mortar and remote consumption. She has also worked in state and national politics, IT, banking, finance and cleantech as well as sustainability.Since moving to Germany, she has learned passable German, obtained her Executive MBA, and founded several healthcare and digital health related startups. She has also written two books while covering the expansion of the cannabis industry in the U.S., Germany and across Europe but also increasingly globally.

Book preview

Green II: Spreading Like Kudzu

The inside story of the first German

cannabis cultivation tender bid

© 2020 Marguerite Arnold

Published by Marguerite Arnold at Smashwords

ISBN: 9781005045951

Cover and series promotional photography credit

Tim Foster and Nancy Gallardo, Unsplash

Smashwords Edition License Notes

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The best way to predict the future is to create it.

Peter Drucker

Table of Contents

Dedication

(Brief) Timeline Of The Story So Far - In A Galaxy Close To You

Preface

Chapter One: January, Oh, Canada!

Chapter Two: February - Cannabis Über Alles

Chapter Three: March - Money For Nothing - And Your Chicks For Free?

Chapter Four: April - The Cannes of Cannabis

Chapter Five: May - Too Sexy For My Weed - And Other Cannabitchery

Chapter Six: June - Carry on Cannabis - Green Reform Invades The UK

Chapter Seven: July - The Shit Hits The Cannafan

Chapter Eight: August - Stand and Certify: Qualifying For A New Market

Chapter Nine: September - Ready, Steady, Rec Market Europe?

Chapter Ten: October - Like A Virgin - The Polish Market Prepares For A Cannakrieg

Chapter Eleven: November - Between A Rock And A Hard Place

Chapter Twelve: December - Cannabis 2.0?

Notes

About The Author

Previous Publications

Dedication

For those whom cannabis reform has not yet come.

Sunset and evening star,

And one clear call for me!

And may there be no moaning of the bar,

When I put out to sea,

But such a tide as moving seems asleep,

Too full for sound and foam,

When that which drew from out the boundless deep

Turns again home.

Twilight and evening bell,

And after that the dark!

And may there be no sadness of farewell,

When I embark;

For tho' from out our bourne of Time and Place

The flood may bear me far,

I hope to see my Pilot face to face

When I have crost the bar.

The Crossing of The Bar

Alfred, Lord Tennyson

(Brief) Timeline Of The Story So Far...

In A Galaxy Close To Home

This eBook recounts the inside story about and surrounding the first German medical cannabis cultivation bid which was a unique development in the industry, globally. The timeline behind it, the forces that shaped it, and the fallout it created, not only in Germany, but globally have continued to play a driving role in the normalization discussion.

However there are a lot of moving pieces. Here, as you begin to surround yourself with this strange piece of history if not world beyond that, is a (brief) overview of the global events that forced the German Parliament (Bundestag) to unanimously approve medical cannabis reform in the spring of 2017, issue the cultivation bid in the first place, and subsequently create a market, no matter how subsidized which has continued to drive the discussion both domestically and far from Germany's borders.

Beyond public insurance coverage, this also has created a fully GMP-certified if not always compliant industry and beyond that, a global reference wholesale price for flower. It has also created an ongoing debate about the medical if not psychoactive effects of all parts of the plant. Not to mention the impact on the human body of absorbing both these and extracted cannabinoids and essential oils.

That all of this has happened very quickly, relatively speaking, and in an international context is actually the first part of the story of the German cannabis bid. Here, in abbreviated form, is a brief overview of the key events of the years leading up to 2019, the year in which the bid was actually awarded. Keep in mind that as this book is finally being released, well over 15 months later in the fall of 2020, the first German cultivated cannabis is only just now reaching pharmacies.

2012: Two American states - Colorado and Washington State, pass voter-driven referendums to legalize the sale of recreational cannabis during the national presidential election that also returns Barack Obama to the White House.

2013: Canada passes federal reform legalizing medical cannabis and Uruguay becomes the first country to legalize recreational use.

2014: Colorado begins recreational sales on New Year's Day, the first American state to do so - and approximately 11 months after voters go to the polls to vote for change. In July, Washington State becomes the second U.S. state to legalize recreational sales and use. In Canada, Tweed (later Canopy Growth) lists on the Toronto Stock Exchange (TSX) as the first public cannabis company to do so. They are rapidly followed by other firms who today are the largest and best known cannabis companies in the world (Tilray, Aurora, Maricann/Wayland Corporation, Aphria and more).

2015: The German government is successfully sued by patient Guenther Weiglein, to allow him and other patients to grow their own cannabis if they cannot afford to buy it in a pharmacy (at the time approximately €1,500 per month or about $2,000). Weiglein and other patients receive the right to grow their own. This is later rescinded after Germany changes its own domestic laws in 2017, becoming the third country after Israel and the Netherlands (which subsequently withdraws its statutory insurance protection) to mandate coverage of medical cannabis under public health insurance.

2016: Start-up distributor, Frankfurt-based MedCann GmbH becomes the first German company to import Canadian floß (flower) into the German market. The company is founded by an American biologist with German educational and professional credentials as a stem-cell researcher and German businessman. By the end of the year, the start-up is bought out by Canopy Growth at approximately the same time the company also buys the Canadian Mettrum (also almost simultaneously convulsed in pesticide scandals in Canada). By the end of the year, other distributors enter the market, including Podemos (later acquired by Aurora) and Germany's third indie distributor (still independent to this day) Cannamedical, which is founded by German Millennial David Henn.

November 4, 2016: Donald Trump wins the American presidency. His first attorney general, Jeff Sessions, is fond of saying that only bad people consume cannabis. To date, there is no federal reform, although as of the 2020 U.S. Presidential elections, four years later, 15 U.S. states have passed laws legalizing recreational use cannabis. That is territory which houses approximately one third of the U.S. population. As the COVID-19 Pandemic has continued to devastate the U.S., dispensaries if not the state industries that support them are being given essential status to stay open during pandemic related shutdowns. So far, recreational change at the federal level looks like (at least) another four year battle at the federal level along with the necessary state reforms that must also keep occurring.

January 2017: Jeff Sessions repeals the Cole Memorandum, protecting U.S. state markets from federal intervention. Dutch insurers also announce that they will stop covering the claims of medical patients domestically the same month that the lower house of the German Parliament (the Bundestag) announces unanimous passage of Germany's new medical cannabis law. Namely that, when prescribed by a qualified doctor, as a drug of last resort, public insurers must cover the majority if not all of the cost.

March 2017: Germany changes its federal law to implement cannabis by prescription that will also be reimbursed by public health insurance.

April 2017: The German government issues its first (if not the first national if not regional) tender bid for the cultivation of cannabis domestically ever, anywhere although of course forced to do so because of lawsuits brought by patients. Thanks to multiple mistakes by BfArM, the federal government agency tasked to oversee the entire process, and further lawsuits (this time brought by companies applying for the tender) the finalists are not chosen until the spring of 2019. The International Cannabis Business Conference (ICBC) holds its first event in Berlin, the first international business conference focusing on the legitimate cannabis market and the first industry focused business conference in Europe to convince a mainstream hotel to host its event.

Summer 2017: Lawsuits are launched against BfArM, the German agency overseeing the tender bid. While this is kept tightly secret, by the big Canadian companies, the reason for the subsequent technical fault by BfArM is because the German Government requires pharmaceutical grade EU-GMP certified floß (raw flower) and nobody in Canada has product that is in compliance with the same even though the bid language was written in a way to give advantage to existing Canadian cannabis firms hopeful for a shot at this business. The reasoning at the time by the German government for giving Canadians this advantage in the first place is that Canada has already enacted federal medical reform. However this excuse is used to exclude all German hopefuls in the first round of the bid while the Canadians fail to get GMP and other required certifications during the entire bid process (with one exception).

March 2018: The cultivation bid goes down in flames at the High Court in Dusseldorf, citing BfArM, the German version of the FDA, with a(n) unheard of technical fault.

Summer 2018: BfArM reissues the revised bid with a deadline of October 12. Roughly three days before the deadline in October, however, a new lawsuit is filed, which was eventually heard in April 2019, delaying the tender bid process again. In the meantime, the Deutsche Börse in Frankfurt also briefly bans the clearance of all cannabis company stocks from North America listed on the exchange because their clearing company in Luxembourg cannot process them. The reason? Cannabis is still illegal in Luxembourg. Luxembourg conveniently changes their medical cannabis law several weeks later, but ever since, the Deutsche Börse has implemented a policy that it can revoke clearance rights, at their discretion for the foreseeable future. In the meantime, the ruling political coalition in Luxembourg also turbocharges the European cannabis discussion by announcing that full recreational reform will be on its next five year legislative agenda several months after it changes its medical cannabis laws.

Fall 2018: Major beer, tobacco and spirit companies plus Coca Cola, invest in all the major cannabis companies in both Canada and the United States. Tilray enters a first of its kind deal with Novartis, a global pharmaceutical company. The largest investment amount to date, over $5 billion from beer brewer Constellation goes to the coffers of Canopy Growth, up until this juncture, one of the perceived frontrunners to win at least some cultivation licenses in the German tender. South Africa becomes the second country in Africa (after Lesotho) to reform its cannabis laws. In South Africa, this is done by court case, where the right to consume cannabis is enshrined as a constitutional right. This development also sees Canadian companies (and global investors) begin to invest in cultivation in particularly Lesotho. Major companies in the space from Canada also hold a first of its kind investor conference in Frankfurt Germany in October where they also unsuccessfully lobby Jens Spahn, German Health Minister. The topics on the table? Existing regulations and enforcement of them, including the ongoing drama at the Deutsche Börse as well as the fate of the bid (against which the next lawsuit arises that weekend, launched by still-aggrieved non-Canadian companies). The next week, Aurora announces that it is going public not in Frankfurt, as had been widely rumored, but the NYSE. The UK also finally allows medical cannabis to be prescribed by Schedule II prescription. However, it takes another year for the National Health Service (NHS) to issue the first formal guidelines for prescription and coverage. Chronic pain, the top condition now covered in the German market, is explicitly excluded, along with a host of other conditions. Canada also finally begins its now delayed by six month recreational market.

Christmas Day 2018: Israel and Thailand change their national laws on cannabis. In Israel's case it is to allow (finally) medical cannabis exports at least in theory (although as of 2020 this is still mostly a theoretical discussion). In Thailand, the home of 80's exotic ganja, the legislature changes the law to allow not only medical cannabis consumption, but also legalizes export as a gift to the Thai people.

2019 therefore dawned with an industry in high gear, no matter how much the transmission repeatedly stuttered, and lurched into a far more global and complicated discussion just about everywhere. While laying down the seeds for future reform.

The German cultivation bid and all the politics around it, which shaped how it was conceived and now how it will operate for the next several years, is clearly the trigger for what is coming next. Globally.

This is that story. Not to mention a bird's eye view if not a trip through some of the cannabis industry's strangest international corners with some of its most interesting entrepreneurs and participants at the dawn of what many are now calling Cannabis 2.0.

Preface

Many things have changed since I wrote the first eBook in this series, Green: The First Year of Modern American Marijuana Reform. Both in my life and in the cannabis industry globally.

Of course 2020, which has rolled around as I have been editing and proofreading this book is a year that is also all about change, including of the cannabis kind, and will continue to be long after the wall calendar hits the recycle bin. This was a year when the industry was finally recognized as a vital one in multiple jurisdictions, and when patients claimed major victories on the access front that will continue to reverberate on both a policy perspective if not drive the industry forward.

It is also clear that the intervening months from where I left the story line at the end of this book are good for reflection, particularly because the industry itself has also been affected if not put into, literally, slow motion to presumably a reclassification, on a global basis as of December 2020.

Right before this eBook was published, and in some ways more important than the next resident of the White House, the 2020 U.S. presidential elections moved the state battle forward for multiple states. At least two of these markets are also designed, by the language of the voter mandates, to speed up implementation, in large part because of the frustrations of lack of reform on a federal level.

Across the Pond, in Europe, countries are also actively looking for ways to update their cannabis regulations and rules, even if most are still hesitant to venture past the medical discussion. Yet. So are the citizens of New Zealand who also just declined to turn their medical market into anything more. For now.

All of these more recent events are very much influenced by the developments covered in this book (and in the case of U.S. state markets specifically, by its prequel).

Yet for all of the revelations that I discuss and events I describe, the trends behind all, both within and beyond cannabis, which hit the wider world by storm in 2020, were already well on their way. 2019 was a year when unstoppable forces began taking over a planet that by 2020 could no longer resist them.

That starts with the inevitability of a global pandemic that would reshape many things about the idea of normal. It also includes an understanding that the current state of affairs if not life on earth is not sustainable, in any way.

This paradigm shift, clearly speeded up by the draconian impact of a world-wide health crisis paired with the inevitable economic disruption that it is also triggering, also includes cannabis reform. And by the end of 2020 that will presumably (hopefully) include the further deliberations if not overdue decision of the United Nations (UN) in the form of the World Health Organization (WHO) about where to literally fit the plant into existing classifications on a global level. Or not, depending on whether they decide to punt again.

In the meantime, large questions remain in confusing uncertainty in too many countries and almost every region - from U.S. federal reform to forward motion at the EU level. Yet the topic is far from stasis status. The goalposts are moving forward intriguingly even in late 2020, as Europe's highest court in Luxembourg decided that not only was CBD not a narcotic, but it could be sold cross border and marketed like any other consumer product as long as it was legally produced. In the meantime, Israel announced to the world that they would begin a recreational experiment sometime in fall 2021, right around the time that Luxembourg begins its long anticipated market.

While cannabis reform itself is not like say, democracy, the two are in fact very much linked. Namely, demand for the same has come from the legitimate grassroots (patients and their advocates cum voters). So far, there has yet to be a popularly invoked public mandate to legalize the plant (anywhere) that has been properly if not smoothly implemented by any (supposedly) democratically elected government. Perhaps newly legalizing American states, or even Luxembourg may yet change that story. However, the jury is out simply because supporting bureaucracies that are also (along with receiving public money to do so), required to implement the same without major blunders have only been further burdened if not slowed down by the Pandemic. And were struggling, thanks to underfunding and systematic undermining way before Brexit, or Trump.

Indeed, so far, smooth implementation of either medical or recreational reform has not happened anywhere. See, for example, Mexico, where the Supreme Court ruled twice on the fundamental unconstitutionality of blocking either a medical or recreational market in the last five years and a legislature which is waiting up until literally the last minute (December 15, 2020) to pass any such legislation into law.

And that is just at the sovereign level.

Implementation has been wonky and clumsily implemented after multiple excuses and delays - everywhere.

This is worrying enough, beyond the specific issue at hand. Cannabis reform is, beyond the plant, widely called for by popular referendum that eschews any kind of political label. Right now, just about everywhere, it is also a litmus test issue that is literally proving how inefficient if not tone deaf most politicians if not bureaucracies are. Starting with this idea: If governments cannot implement basic (even medical) cannabis reform at this point, and relatively quickly, where does that leave us all on issues like say, global warming? If not democratic change and reform of government itself?

Indeed, the track record of cannabis reform specifically, has so far, despite victories, seen massive problems and setbacks that the industry as well as governments will have to face (and indeed are) as cannabis itself becomes more normalized as a health if not wellness plant. However this is yet another place where the topic of cannabis as medicine reform becomes a burning topic of great public interest just because of what it also implies. Namely, if the introduction of cannabis as a new medicine is anything to go by as the most recent benchmark of how (for example) the German government responded to the same, how effective will early Pandemic medicine or even vaccine rollout be in the next 12 - 24 months?

This is not only profound, but also intensely disturbing. Indeed such a prospect is something that may indeed prove to be so disruptive that governments or regimes will indeed crumble. Civil War, which I predicted in the pages of my first book about cannabis, is now a rumbled possibility at least in the U.S. In Europe, Brexit is another earthquake which is not done shaking yet.

Cannabis reform is also not like either the rise of autocrats like Donald Trump or post-COVID rattling of the core of the European Union. Or even the potential realignment of global forces, no matter who wins what political office. Namely, it is about issues that are political but also beyond politics. That being said, the extreme right wing, in every country, also wants to ignore the entire cannabis discussion.

Ironic as it indeed is, many of the most basic issues inherent in both political change to enable normalization of cannabis and the industries and communities that are created and create the same are also front and center in the most important discussions on the planet right now. Namely, sustainable economies, and the health of those who make them work.

The 1% also get Covid, and further rely on the rest of us to make even basic things happen for them.

Thanks to the Pandemic, however, 2020 is also a year that has brought many issues about basic healthcare to the fore of everyday discussion globally and further in a way that cannabis patients understand. It is one of the basic themes of one's life if one becomes a medical cannabis patient. Namely, if I get sick with my chronic, so far incurable condition today, can I access my medication?

From a personal basis, beyond my standing in the industry (no matter whether known as a journalist or entrepreneur), the two will always be linked.

Why? Because I am, beyond my professional endeavors, a patient, with a complex condition that only this drug will treat. I was human trafficked as a child, and subjected to both the horrors of physical and mental abuse and lack of care that comes with that until I finally escaped at the age of 45. Shocking, certainly, but even more appalling that this crime has yet to be prosecuted in either the U.S. or the UK and the German government has so far taken its time about it.

What I went through not only as a child but more recently is another Epstein saga, extended now over forty years and with a terrible anti Semitic twist. Indeed even as I succumbed to a condition at the age of 40 caused by direct physical and mental violence and lack of care as an adult, my two brothers and other family members involved in the original human rights and hate crime deliberately tried to kill me as I sought to bring my father home to Germany between 2003 and the time of his murder on Martin Luther King Jr. Day, in the UK, 2012.

I escaped with my life to Germany the year after, still trailed, watched and stalked by my brothers.

Justice comes incrementally, and I celebrate it where and when it does arrive. It never does without taking a stand and usually a major fight. As the old aphorism goes, If you don’t stand for something, you will fall for anything. In the Texas version of the same, there is nothing in the middle of the road except yellow lines and dead armadillos.

The same is true about cannabis, generally.

This starts with the fact that there is, five years after I wrote the first book in this series, Green: The First 12 Months of Modern American Marijuana Reform a booming, international industry that is legit. That in and of itself, in the history of ground-breaking disruptions if not revolutions, is cause for celebration. No matter the frustrating delays if not caution lights that are still blinking along the way. Not to mention all the fraud. There are good and honest people working in the industry today, no matter how little you might hear about them.

That is also a big reason that I wrote this book. One of the drivers of my writing passion, no matter when, where or how much I do it, is that I have met many fascinating, good, well-informed people so far, no matter the strange if not dodgier ones that I also meet along the way. They are absolutely the face if not heart of this still evolving movement, not to mention industry beyond that.

The personal is the political, in my life as well as many others. And that is an intriguing if not exciting thing.

But on a personal basis, there is cause for celebration, because there has been real and lasting change. Between the publication of the first book and this writing, I went to grad school and got my long deferred EMBA in 2017, in the process becoming the first person to put a cannatech business plan through an accredited German business school. That was a fight, but it was worth it. As of 2019, my little disruptive start-up, MedPayRx, a blockchain-based digital prescription, insurance pre-claims and seed-to-sale processing machine, went into pilot. Many people remain interested in it as Germany takes its first steps into building a medical blockchain of some kind. It is not done yet, nor my involvement in the same.

As I filed my formal incorporation papers, in Frankfurt, I also became the first person in my ancient German Jewish family that I can trace to the Treaties of Westphalia and the first German state to own a business auf Deutschland for more than 80 years. That in and of itself is cause for celebration, no matter what happens beyond that. Or whatever other start-ups come next. The first step is always the hardest. Never taking it is the first step to failure, not making mistakes along the way.

I am also far more fluent in German, which according to Mark Twain at least, is one