From Prohibition to Home Grows: Lessons from Germany's Cannabis Act for Australia's Medical Cannabis Crisis

Introduction

Germany's Cannabis Act, which came into force on April 1, 2024, provides a compelling case study in rapid market transformation. A major new survey of over 11,000 German cannabis consumers reveals that within the first year, 88.4% of regular users shifted to legal access routes, with homegrown cannabis becoming the dominant supply method.[1]

Meanwhile, Australia's medical cannabis system, now nine years into legalization (2016-2025), faces a regulatory crisis. The Therapeutic Goods Administration (TGA) just closed a major consultation in October 2025, receiving over 700 submissions. The consultation was triggered by mounting evidence that "the unapproved pathways used by prescribers to access medicinal cannabis products, traditionally used as exceptional access mechanisms for unapproved goods, are no longer appropriate due to the high volume of patients accessing an ever-increasing range of products", and that "these products have not undergone any regulatory review or evaluation of their quality, safety, efficacy or performance."[2]

The contrast between Germany's success and Australia's stagnation raises a fundamental question: what structural differences enable one country to achieve rapid market transformation while another remains locked in gatekeeping and corporate control?

Australia's Medical Cannabis Crisis: The Evidence

Scale of Unapproved Supply

During the first half of 2025, over 1,000 distinct medicinal cannabis product entries were reported by sponsors in the TGA's mandatory six-monthly reporting system.[2] However, this figure includes different formulations, sizes, SKUs and brand variations of what may be the same underlying therapeutic product, and represents only products supplied during that specific reporting period. The TGA notes that inclusion in their product list does not guarantee the product is available and that products not supplied via SAS/AP or reports submitted after the required timeframe are not included.[2]

What is clear is that over 99% of medicinal cannabis products being prescribed to patients in Australia remain unapproved and therefore have not undergone any pre-market assessment by the TGA for quality, safety, efficacy or performance.[2]

The growth has been exponential. SAS B approvals for unapproved medicinal cannabis products increased from 57,711 in 2020 to 177,762 in 2024.[2] This explosion reflects a system where legal pathways exist but supply remains concentrated through gatekeeping mechanisms that benefit commercial interests.

The Structure: Vertical Integration and Business Model Exploitation

The AMA's submission reveals the structural problem: "The AMA is concerned that the Special Access Scheme (SAS) and Authorised Prescriber scheme (AP), originally designed for exceptional access, are being exploited as commercial pathways for unapproved products."[3]

The rapid expansion of medicinal cannabis prescribing, particularly through vertically controlled, direct-to-consumer telehealth models, has created a business structure where one corporate entity may own the telehealth clinic, control the prescriber, and operate the dispensary. This structure creates systemic incentives for high-volume prescribing, as each link in the chain benefits financially from volume. The AMA notes: "These models often bypass traditional safeguards, including in-person assessments, community pharmacy dispensing, and continuity of care."[3]

The AMA emphasizes: "While the regulation of direct-to-consumer (DTC) telehealth models falls outside the scope of this consultation, the AMA reiterates its longstanding concerns about the risks posed by vertically controlled entities that bypass traditional safeguards such as in-person assessments, community pharmacy dispensing, and continuity of care."[3]

Most tellingly: "Excessive prescribing and the proliferation of unapproved products are most safely addressed when medicinal cannabis is brought within Australia's established regulatory frameworks specifically, when products are listed on the ARTG and subject to robust oversight."[3]

Emerging Clinical Concerns

The AMA reports observations from clinical practice: "Our members working in emergency departments around Australia have reported increased demand for resources at public hospitals to manage presentations related to the use of high-THC concentration medicinal cannabis products, as well as cases of cannabis-induced psychosis, dependence, and cognitive impairment."[3]

These observations suggest that prescribing practices may not be appropriately matched to clinical evidence or patient selection. The underlying issue is not the availability of cannabis itself, but rather the incentive structure created by vertically integrated business models that profit from high-volume prescribing.

The Product Range Problem

During the first half of 2025, the most commonly accessed products fell within the TGA's Category 5 classification, which represents nearly half of all applications.[2] The regulatory categorization of these products is complex. The TGA's Category 5 classification is based on CBD-to-total-cannabinoid ratios rather than absolute THC content, meaning it encompasses both conventional high-THC flower and ultra-concentrated isolates as a single category.

"The concentrations of THC found in unapproved medicinal cannabis products supplied in Australia can vary considerably and can be much higher (>35%) than the amount found naturally in a cannabis plant."[2] Examples cited by the TGA include: extracts up to 88% w/w THC, herb dried up to 60% w/w THC, inhalation products up to 880 mg/mL, and oral liquid up to 50 mg/mL.[2]

Currently, patients have no option to access products with specific cannabinoid profiles they may prefer. If legal homegrow were permitted, patients could select or grow cannabis with the cannabinoid profiles and potency levels appropriate to their individual needs, rather than being limited to whatever the commercial market supplies.

The German Model: How Decentralized Legal Access Transformed Markets

In contrast, Germany's KonCanG survey data shows rapid, voluntary market transformation through fundamentally different regulatory design.

The Rapid Shift to Legal Access

Before April 1, 2024, only 23.5% of German regular cannabis users accessed cannabis through legal channels. After legalization, this figure jumped to 88.4% achieved entirely without legal retail dispensaries.[1] The shift was driven by three mechanisms:

• Home cultivation: 49% of users now use this as their main source
• Pharmacy access: 29.2% now obtain cannabis from pharmacies
• Cultivation associations: 1.9% use non-profit cooperative models[1]

Why Home Cultivation Mattered

The critical difference: Germany allowed personal homegrow. Homegrowing became the default with nearly half of surveyed consumers now provisioning themselves through personal cultivation. This eliminated artificial scarcity and destroyed the pricing power of corporate suppliers.

The data is revealing about who grew: "nearly all new homegrowers were men (90.1%), suggesting cultural and confidence factors shape adoption."[1] But crucially, homegrow required no medical justification. It was simply permitted as a legal right.

What This Prevented

By decentralizing supply, Germany prevented the vertical integration problem Australia is experiencing. When supply can only come from approved vendors with gatekeeping relationships to prescribers, those vendors can:

• Charge premium prices
• Incentivize high-volume prescribing
• Control patient access through integrated telehealth clinics
• Exploit regulatory gaps

When anyone can grow, these levers disappear. Price competition becomes impossible to avoid. Prescribing incentives evaporate because patients are no longer dependent on practitioner-prescriber-dispensary chains controlled by single corporate entities.

Before legalization in Germany, dealer supply accounted for a substantial portion of access. After legalization, this fell dramatically to only 5%.[1] This demonstrates how legal alternatives effectively displace illicit markets when supply is decentralized.

Why Australia's 2020 Senate Recommendation on Homegrow Was Ignored

In 2020, the Senate held an inquiry into barriers to medical cannabis access. The inquiry's explicit recommendation: enable patient home cultivation.

Yet five years later, no legal home cultivation pathway exists for Australian patients. No pilot programs. No risk assessment. Simply: prohibition maintained.

The absence of patient homegrow rights, despite Senate recommendation and clear evidence of international success, reveals where regulatory priorities lie. Home cultivation would:

• Enable patient autonomy over cannabinoid profile and potency
• Eliminate artificial scarcity propping up commercial prices
• Remove dependency on vertically integrated supply chains
• Create price competition
• Reduce prescriber gatekeeping power and financial incentives for high-volume prescribing

The prohibition persists because none of these outcomes benefit current market incumbents.

Comparative Structural Analysis

The Uncomfortable Truth: What the TGA Consultation Reveals

The TGA's August 2025 consultation paper itself exposes the regulatory breakdown. The agency states plainly: "The TGA shares these concerns and supports the call for regulatory change."[2]

The TGA identifies the core problem: "The ready access provided via these pathways [SAS/AP] has reduced or removed the incentive to collect the robust safety, efficacy and performance data necessary for the evaluation and registration of a medicinal cannabis product on the Australian Register of Therapeutic Goods (ARTG)."[2]

In other words: because the system rewards supplying unapproved products through gatekeeping pathways, companies have no reason to seek proper approval. The regulatory framework incentivizes the exact behavior it should discourage—high-volume prescribing of unapproved products through vertically integrated models.

The TGA further notes that only 2 medicinal cannabis medicines have been registered on the ARTG: Epidyolex (CBD) for certain epileptic conditions and Sativex (nabiximols) for multiple sclerosis symptoms. Four devices have been approved for supply. All other medicinal cannabis products prescribed remain unapproved.[2]

What Would Patient-Centered Reform Look Like?

Based on the evidence from Germany and the structural problems documented in the TGA consultation:

Enable patient autonomy:

1. Permit patient home cultivation for chronic conditions (as 2020 Senate recommended)
2. Allow non-profit cultivation cooperatives independent of commercial producers
3. Ensure patients can access products with diverse cannabinoid profiles, not only high-potency commercial options

Reform prescribing incentives:

1. Separate medical access from commercial licensing
2. Prevent vertical integration (prohibit single companies owning prescriber plus dispensary plus product)
3. Create transparent disclosure requirements for prescriber financial relationships

Improve information:

1. Mandate labelling showing ARTG registration status (registered vs. unapproved)
2. Require informed consent disclosing that products have not been TGA-evaluated
3. Enable data sharing between TGA and AHPRA to support continuity of care

The AMA specifically recommends that "labels clearly display THC and CBD content in milligrams and percentages per dose and per pack, include dosing instructions and storage requirements, and indicate ARTG registration status using plain language (e.g., 'Registered' versus 'Unapproved')."[3]

The Policy Choice Moment

The TGA consultation closing October 7, 2025, with over 700 submissions, represents a choice point. Regulators can:

Option A: Maintain the current gatekeeping system. Products remain unapproved and commercial, vertically integrated clinics maintain control, prices remain high, prescribing volume incentives persist.

Option B: Structural reform including enabling homegrow, permitting patient autonomy over cannabinoid profile, preventing vertical integration, and separating medical from commercial frameworks.

Germany chose something closer to Option B. The outcome: 88.4% of users voluntarily shifted to legal supply within one year, dealer markets collapsed, and rapid transformation occurred without retail infrastructure.

Australia's policymakers could have chosen similarly in 2016. They did not. The reasons are documented: regulatory capture, commercial interests, and misalignment of incentives between patient access and corporate profit.

The question is not whether reform is possible. Germany proves it is. The question is whether Australia's regulators will prioritize patient access and autonomy over the commercial interests that have shaped the current framework.

The 700+ TGA consultation submissions will provide an answer, not through their explicit recommendations, but through whose interests the final regulatory framework serves.

References

[1] Steimle, L., Werse, B., and Stallwitz, A. (August 2025). "Veranderungen fur Konsumierende von Cannabis durch das Cannabisgesetz (KonCanG): Projektbericht." Institut fur Suchtforschung, Frankfurt University of Applied Sciences and Evangelische Hochschule Freiburg. [English translation: "Changes for Cannabis Consumers through the Cannabis Act: Project Report"]

[2] Therapeutic Goods Administration (August 2025). "Consultation: Reviewing the safety and regulatory oversight of unapproved medicinal cannabis products." Version 1.0. Australian Department of Health. Available at: https://consultations.tga.gov.au/medicines-regulation-division/test-soms/user_uploads/final—consultation-paper—medicinal-cannabis-review—august-2025.pdf

[3] Australian Medical Association (October 7, 2025). "AMA submission to the TGA review into the safety and regulatory oversight of unapproved medicinal cannabis products." Available at: https://www.ama.com.au/sites/default/files/2025-10/AMA_submission_Reviewing_regulatory_oversight_of_unapproved_medicinal_cannabis_products_0.pdf