Tom Broockmann, Medical Cannabis Expert: "Producing Cannabis Is Not So Simple, We Lack Expertise in Europe"

After six years in the German market through Adrex Pharma, founded in 2018, Tom Broockmann now has the perspective to analyze the tensions shaping the European medical cannabis market: dependence on Canadian imports, regulatory disparities, limitations of the GMP framework (see box at the bottom of the page), and the controversial rise of teleclinics. These are obstacles that, according to him, still hinder the emergence of a truly competitive European sector.

Could you describe the value chain of medical cannabis in Europe?

There are essentially three models.

The best, in my opinion, is ours (that of Adrex Pharma, ed.): "from seed to patient." We control the cultivation sites, as they produce exclusively for us. Therefore, we know what happens at each stage. The flowers are cultivated, produced, and then sent to Germany, where we release them before they hit the market.

The second model involves buying cannabis from all over the world and then passing it through the "GMP machine" via Portugal. But that loses a lot of money.

The third model involves buying in Germany from other importers. But in this case, you don’t really know where the seeds or raw material come from. You have to rely solely on analysis certificates.

By importing medical cannabis, particularly from Canada, Portugal seems to have become more of a processing country than a producer of medical cannabis. What do you mean by "GMP machine"?

Portugal is a bit like the "European washing machine" of GMP. They import a lot of cannabis from different countries, for example from Uruguay, cultivated according to GACP standards, they perform a few small processing steps, and suddenly it becomes a GMP product. This is what we call a "GMP washing machine." Not money laundering, but a kind of regulatory laundering. The authorities do not appreciate this system.

Why is the system not appreciated if the product is processed in Europe? Shouldn’t standards be respected?

GMP starts at the post-harvest stage of the flowers: drying is already part of the process. You can’t really transport wet cannabis around the world due to the high risk of contamination. That’s why producers do a pre-drying in the countries of origin, but this step is not really compliant with GMP. In Portugal, they finish the drying, but the product has already been pre-dried beforehand, which does not fully comply with GMP standards.

But some countries continue to buy from Portugal? Does that mean they are breaking the law?

Let’s say it’s a gray area.

Canada is currently the largest producer of medical cannabis. Do you think Europe will ever build its own supply chain?

I think that will happen in the future, but producing cannabis is not that simple. It requires a lot of care. Otherwise, the plant develops problems. We still don’t really have that expertise in Europe.

When the German government launched its tender (to organize domestic production of medical cannabis, ed.), it initially required at least five years of experience in cannabis cultivation. We wondered if we would have to recruit these people from prison, since cultivation was illegal before. That’s why they eventually changed that requirement.

But I think that in ten years, it could be possible. Canada has about twenty years of experience over Germany in cannabis cultivation. And honestly, costs are still way too high here.

Could producing cannabis in Europe become cheaper? Is labor cost the issue?

It’s labor, but also electricity. It requires a lot of electricity because cultivation is mainly done indoors to obtain a safe and clean product. You need to provide at least twelve hours of light per day and constantly control the temperature of the buildings. Land is also very expensive here.

Canadians produce on a much larger scale. And the costs of electricity and land prices are much lower there. They also have vast areas available.

In Germany, for example, we have about thirty years of experience in the pharmaceutical industry, so we know how to set up this type of activity, but it is very difficult to be economically competitive, especially because prices are constantly falling. Producing here is too expensive.

But some companies are still doing it...

Yes, because there was a government tender to produce medical cannabis. But that program is over, and the prices set at that time are no longer viable today. Many companies invested in this sector, but it only lasted two years, and with such high costs, they all lost money. A few companies remain, but what they mainly do is import from Canada from non-GMP sites, then convert the product to GMP in Germany.

Is it difficult to comply with German and European regulations?

There is a common regulation across Europe. But in Germany, each region has a different way of viewing cannabis. In some regions, it is considered a simple active pharmaceutical ingredient (API), in others as a finished product. That’s where the main regulatory difficulties lie.

We (Adrex Pharma) are fortunate to be located in a region where, once the product is released, we can sell it anywhere in Germany. The problem mainly concerns imports. For example, in Berlin, if you import cannabis flowers from a producer who only has an API license, they cannot process them into a finished product for packaging. They must go through another region to perform this step before sending the product back to Berlin. The regulation is quite complicated and a bit absurd.

How is the distribution of medical cannabis organized in Germany?

For cannabis flowers, in 99% of cases, it works directly with pharmacies: we send products directly to pharmacies, which then sell them to patients. Everything is very price-oriented.

For oils, distribution follows the classic pharmaceutical model, via wholesalers.

If we look at the proportions, about 80% of flowers are prescribed through private prescriptions. This means that patients pay out of pocket. While for oils and dronabinol, about 80% are reimbursed. Thus, we see that legalization is somewhat happening through online clinics, which are mainly specialized in prescribing flowers.

Online clinics have contributed to the rapid growth of the market in recent years. What do you think of these clinics?

Online clinics are a real problem for us. Through consultations and online doctors, they indirectly provide access to the recreational market. Of course, there are real doctors, but some are based in Romania or elsewhere. Generally, patients simply fill out an online form, and then several partner pharmacies provide them with cannabis.

And this is, for example, against the law, because as a patient, you are supposed to have the freedom to choose the pharmacy you want to go to. In reality, they are simply exploiting a small loophole in the existing legal framework. But this is not good for the real pharmaceutical or medical cannabis market, because fundamentally, many people do this just to be able to legally possess cannabis.

Last year, in June, a law came into effect setting a precise THC (tetrahydrocannabinol, the main psychoactive compound in cannabis) limit allowed in the blood for driving, similar to alcohol. But for a patient using medical cannabis, this limit is not the same. So you can have more THC in your blood if you are a patient. And that’s why many people think: "If I lose my license, I need a prescription."

Can we then talk about an artificial growth related to these clinics? Are policymakers looking to change the law to counter this phenomenon?

Yes, we can say that it is more or less a false growth from a medical perspective. The market has shifted somewhat towards a quasi-recreational use because it has become very easy to obtain a prescription. Policymakers are currently trying to limit these online prescriptions for cannabis. But since cannabis is a pharmaceutical product, you cannot simply exclude it from the online consultation system.

What they are trying to do is prevent these teleclinics from doing as much marketing. They are also looking at the possibility of banning the mail-order sale of cannabis flowers. This would force patients to go through their local pharmacy, which would raise prices. Some people might not be able to afford it, so they would abandon this legal route.

Have there been many innovations in product preparation (flowers, oils, etc.)?

At the moment, real innovations are not really possible. I think that is the case throughout Europe.

We have what are called monographs (regulatory sheets defining the characteristics of preparations, ed.). This means, for example, that an oil must be sold in a 30 ml bottle, but all these products are still considered magistral preparations. In other words, the pharmacist must always perform a small preparation step before dispensing them to the patient. They are not allowed to buy a product and hand it over as is to the patient: in that case, it would be considered a finished product.

Then a marketing authorization would be required (costly and complex to obtain, ed.). It is this regulatory constraint that limits innovation possibilities today.

You did not originally market your own cannabis flowers; you were more focused on extracts like dronabinol and cannabidiol used in prescription medications. What role do they play today in Adrex Pharma's business, and how is your offer structured?

Today, we have three models.

First, we provide GMP services for large pharmaceutical groups. We handle the import, packaging, and release of products for them.

Next, we also do white label: we import flowers and produce brands for other companies.

And finally, we now have our own flowers (imported from Canada and Colombia, ed.), but only in the premium segment.

Do you import and then dry in Germany, unlike Portugal?

No. We only work with EU-GMP certified facilities. They perform all GMP steps for us (for oils and flowers, ed.), as they cultivate exclusively for us under contracts. We then only perform secondary packaging, laboratory analyses, and batch release in Germany.

Does Adrex Pharma only sell in the German market?

We are mainly focused on Germany, but we also have some products in Poland. And we sometimes export to Australia.

Doesn’t Australia have its own market?

That’s the case, but they sometimes look for specific products, and we can provide them with certain particular flowers. Since there is a mutual recognition agreement between Australia and Europe, it is easy for us to export and for them to import. The advantage is that cannabis in Australia has the same status as in Germany: it is a pharmaceutical product.

Better understanding GMP and GACP standards

The European GMP standards (or BPF in French, for Good Manufacturing Practices) ensure that products are manufactured uniformly and controlled, according to appropriate quality standards. They apply to the processing, extraction, packaging, and storage of finished products (medications).

The GACP standards (Good Agricultural and Collection Practices), recommended by the WHO, ensure the quality of plant raw materials from cultivation and harvesting. They concern soil preparation, planting, irrigation, harvesting, preliminary drying (except for medical cannabis which depends on GMP standards with drying that must take place in ultra-controlled industrial premises, including humidity, temperature, and air quality control) and storage of plants.