Cannabis Litigation Germany
A Practical Guide for Foreign Companies
As a cannabis litigation lawyer in Germany, I handle disputes that follow a recognisable pattern. A foreign supplier delivers a batch. The German buyer accepts it, confirms receipt in its system — and then either stops paying, raises a quality complaint weeks later, declares set-off of a contested recall claim, or loses its BfArM licence and refuses to take the next shipment.
Each of these scenarios plays out very differently before a German court. Understanding the legal mechanics before a dispute arises is the difference between recovering your money quickly and spending two years in proceedings.
What makes cannabis litigation in Germany structurally distinctive — and what makes it one of the most legally complex fields in commercial law — is the intersection of three forces that rarely converge in other sectors: a highly regulated multi-stage supply chain governed by GMP and GACP standards; import and export permit regimes administered by national authorities with unpredictable timelines; and supply agreements that were drafted without anticipating how those regulatory realities interact with binding purchase commitments, advance payment structures and force majeure clauses. Most disputes do not begin with a deliberate breach. They begin at that intersection.
Dr. Degenhart has represented GroVida in multiple disputes in Germany. What sets DMR apart is the combination of speed, strategic clarity and a willingness to be genuinely hard in the matter when the situation calls for it. We needed results, not reassurance — and that is what we got.
— Mallory Chiarelli, GroVida S.A.
A: Cannabis Litigation in Germany
I. The Supply Chain Behind the Dispute
Before examining how cannabis disputes unfold before German courts, it is worth understanding the commercial structure in which they arise. The medicinal cannabis supply chain is not a simple bilateral relationship between a seller and a buyer. In most cases it involves multiple distinct stages, each with its own regulatory touchpoint:
- GACP-certified cultivator — grows cannabis under Good Agricultural and Collection Practice standards. At this stage the product is not yet medicinal-grade.
- Converter / EU-GMP Manufacturer — transforms GACP raw material into a finished medicinal product (‘conversion’). The converter must be EU-GMP certified. Some cultivators are themselves GMP-certified and combine both roles; others rely on a separate CMO for conversion.
- Importeur / Grosshändler — the German importer and wholesale distributor, licensed under § 52a AMG and § 4 MedCanG. Applies for and holds the BfArM import permit for each shipment.
- Apotheke / Pharmacy — final dispensing point, subject to its own storage and handling obligations.
In some structures, conversion takes place in the country of origin and the finished product is imported directly. In others, raw GACP material is imported and converted in Germany. In still other models, the German importer is itself the CMO. The legal structure of the supply agreement — and therefore the legal analysis of any dispute — depends entirely on which model is in use.
This multi-stage structure has three important consequences for litigation. First, quality attribution — the question of where in the chain a defect arose — is almost always contested. A batch can leave the GACP producer in perfect condition, pass through conversion, QP-release, and international transport, and arrive in Germany with a microbiological issue that developed at pharmacy or distributor level. Each stage points at the next. Second, each stage involves a separate regulatory authorisation with its own timeline: GACP certification, EU-GMP certification, BfArM import permit. When one of these is delayed or revoked, every contractual obligation downstream is affected. Third, the contracts — if they address these realities at all — rarely address them well.
II. How Cannabis Disputes Reach Court in Germany
Cannabis litigation in Germany is commercial litigation — governed by the ZPO, heard before the Landgericht (typically Frankfurt, Munich or Berlin). Most disputes begin with a payment default. The buyer stops paying. The seller sends reminders. The buyer responds with a belated quality complaint, a set-off declaration against disputed recall costs, or an assertion that the binding purchase commitment no longer applies. By the time a lawyer gets involved, the parties are in an entrenched correspondence battle.
What the anatomy below shows is the litigation phase — the final, visible stage. The root cause of most of these disputes lies earlier: in the combination of long multi-stage supply chains, biological products whose parameters shift during transport and storage, and regulatory timelines that no contract anticipated.
ANATOMY OF A TYPICAL CANNABIS DISPUTE IN GERMANY
Stage 1
Delivery & Acceptance
Buyer confirms receipt — no complaint raised
Stage 2
Invoice Issued
NET 30 terms. Clock starts.
Stage 3
Silence / Partial Pay
Payment deadline passes. Buyer goes quiet.
Stage 4
Belated Complaint
Quality complaint raised in response to payment reminder.
Stage 5
Court / Settlement
Urkundenprozess or Without Prejudice negotiation.
III. The Biggest Litigation Mistake: Accepting a Late Quality Complaint
The most important rule in cannabis litigation in Germany is one most foreign companies have never heard of: § 377 of the German Commercial Code (HGB). Under this provision, a commercial buyer must inspect delivered goods promptly after receipt and notify any defects without undue delay (unverzüglich). If it fails to do so, the goods are deemed approved — and the buyer permanently loses all warranty and defect rights, regardless of whether the goods were actually defective.
This is not a technicality. A seller who responds to a late complaint by engaging on the merits — offering substitute delivery, arranging joint testing, providing explanations — may inadvertently waive the § 377 HGB defence. The correct response, from the first moment a questionable complaint is received, is to assert untimeliness in writing while reserving all rights.
REAL-WORLD EXAMPLE
Goods delivered 17 July 2025. First quality complaint: 8 August 2025 — 22 days later. Alleged defects (foreign matter, leaf size, trichome quality) were visually apparent on any reasonable inspection. Under § 377 HGB, visible defects must be notified immediately. The 22-day delay rendered the complaint legally ineffective — regardless of the underlying quality question.
Can the parties contract out of § 377 HGB?
Only in the buyer’s favour, never the seller’s. Many cannabis supply agreements in Germany include a 30-day ‘Goods Review Period’ clause. The BGH has held that a complete exclusion of § 377 HGB is invalid (BGH VIII ZR 149/90). These clauses extend the notice period for the buyer — which benefits the buyer, not the seller. Sellers should not assume they provide symmetric protection.
IV. The Fast-Track Weapon: Urkundenprozess
When a German buyer has confirmed receipt and simply stopped paying, the foreign seller has access to one of German procedural law’s most powerful tools: the Urkundenprozess (documentary proceedings, § 592 ZPO). The claimant must prove all facts by documents alone. If it can, the court issues a provisionally enforceable judgment — often within three to four months. The buyer’s counterclaims (recall costs, alleged defects) are relegated to separate after-proceedings (Nachverfahren) and do not suspend enforcement.
For cannabis litigation in Germany, this procedure is frequently the right choice. The typical transaction generates an almost perfect documentary chain:
- Purchase order — binding, signed or system-generated
- Delivery note with signed or system-confirmed acceptance
- GMP batch release / QP certificate
- Commercial invoice, NET 30 terms
- Payment reminder — unanswered, or answered with a belated complaint
THE DOCUMENT THAT MATTERS MOST
The buyer's system-generated acceptance confirmation — 'received', 'approved', 'goods received without complaint' — simultaneously triggers the payment obligation and, if no simultaneous complaint was raised, closes the door on later warranty claims. Make sure your contracts require written delivery confirmation, and preserve every record of it.
V. Set-Off (Aufrechnung): The Most Abused Litigation Tactic
In cannabis disputes before German courts, the buyer’s most common defensive move is declaring set-off of a contested claim — typically recall costs — against the seller’s current invoice. A disputed recall cost claim that has not been adjudicated, and a recall quantum that has not been determined, does not satisfy the conditions for a valid set-off under §§ 387 ff. BGB: the counterclaim must be valid, enforceable and due. An invalid set-off leaves the invoice outstanding, with default interest at 9 percentage points above base rate (§ 288 II BGB) running from the original due date.
REAL-WORLD EXAMPLE — CANSATIVA / MEDIPROCAN
Cansativa GmbH declared set-off of €259,177 in disputed recall costs against a current invoice of €95,720. The invoice was extinguished and a residual claim of €163,456 was asserted against the seller — payable in 30 days. The validity of the underlying recall claim had not been established. This is a textbook strategic set-off: real money withheld on a paper claim.
The no-set-off clause
Many cannabis supply agreements under German law contain an express prohibition on set-off: ‘Payments shall be made in full, without deduction of any set-off.’ Under § 309 Nr. 3 BGB, this clause is valid — but the buyer retains the right to set off claims that are uncontested by the seller in writing or finally determined by a court. A well-drafted clause expressly incorporates this carve-out and no other.
HOW TO RESPOND TO A STRATEGIC SET-OFF
Immediately challenge validity in writing: assert the counterclaim is disputed, not yet due, does not satisfy §§ 387 ff. BGB. Assert default interest from the original due date. If the documentary record is clean, commence Urkundenprozess proceedings without further delay. Negotiate on the recall claim separately — not as a reason to delay enforcement on the invoice.
VI. Import Permits, Regulatory Delays and Inventory Risk
Cannabis litigation in Germany sometimes starts before a single invoice is issued. The BfArM import permit — required for every cannabis shipment into Germany — is applied for and held by the German importer. Without it, the foreign exporter cannot obtain an export permit from its own competent authority. An importer who wants to block a delivery, or create commercial leverage, simply withholds the permit. The goods sit in a warehouse abroad, accruing storage costs, while the seller’s production cycle is already complete.
REAL-WORLD EXAMPLE
The import permit for a 60 kg shipment was received by the German buyer on approximately 1 August 2025 but not communicated to the foreign seller. The buyer raised its first quality complaint one week later on 8 August 2025. The export could not proceed. The timing strongly suggests the quality complaint was a post-hoc justification for a decision already taken.
Under German contract law, a buyer who deliberately withholds a received import permit — causing the seller to be unable to perform — may be in breach of its contractual cooperation duties (§ 242 BGB). The seller’s damages include storage costs and, in appropriate cases, the full purchase price. Every cannabis supply agreement should include an express obligation on the buyer to communicate the import permit within a specified number of days of receipt.
1. Regulatory delay as a structural conflict driver
Not every permit problem is deliberate. The structural reality of the German cannabis import regime is that BfArM permit timelines are unpredictable. A permit application can take four weeks or twelve — there is no fixed processing time, and no reliable forecast. In practice, this means that by the time the permit arrives, the goods have already been produced, packaged and often partially paid for. The seller is carrying inventory it cannot move. The buyer, facing cashflow pressure of its own, may not be in a hurry to receive goods for which it must pay on confirmed delivery.
This structural tension — produced goods awaiting a regulatory authorisation, with capital tied up on both sides — is one of the most common preconditions for a dispute. It is not a sign of bad faith. It is what happens when a biological product with a finite shelf life meets a regulatory timeline with no fixed end date. A well-drafted supply agreement addresses this explicitly: who bears storage costs during permit delay, what happens if a permit expires before delivery is completed, and what notice obligations apply if a permit application encounters problems.
2. Inventory risk under MOQ and exclusivity structures
The inventory risk problem becomes acute when a binding minimum order quantity (MMOQ) or exclusivity structure is layered on top. A German importer who commits to a 12-month binding forecast — exclusive for a given strain — and then encounters a regulatory delay, a market shift, or a quality dispute, is sitting on a potential six- or seven-figure inventory position with no alternative market. This is precisely the scenario in which quality complaints are raised not because the goods are defective, but because they are unwanted. Sellers in exclusive MMOQ structures need to anticipate this dynamic contractually before the permit is even applied for.
VII. Licence Loss, Regulatory Failure and Force Majeure
A recurring pattern in cannabis litigation in Germany: the German buyer loses its BfArM narcotics licence through its own administrative failure — a change of address not communicated to the authority, a management change triggering a re-assessment — and then refuses to take delivery, asserting impossibility of performance.
Under German law, this argument generally fails for two reasons. First, a self-caused licence loss is not force majeure: § 275 BGB does not apply where the impossibility is the obligor’s own fault. Second, the buyer’s failure to inform the seller promptly (§ 241 II BGB) — often discovered only through a third party, weeks later — gives the seller a separate damages claim for all costs incurred in reliance on the contract after the point of non-disclosure.
For foreign sellers producing exclusively for a single German buyer, the licence loss scenario is the most financially damaging that can occur. An entire production run, grown and processed for one customer, becomes stranded with no alternative market. This is precisely the risk that advance payment structures and exclusivity premium clauses are designed to address.
B. Supply Agreements: The Provisions That Drive Litigation
I. Four Contractual Flashpoints
Most cannabis litigation in Germany is not caused by unforeseeable events. It is caused by specific contract provisions that are absent, ambiguous, or poorly understood by one of the parties.
1. The binding forecast / MMOQ
Rolling forecast structures with binding minimum monthly order quantities give sellers production certainty and are standard in this sector. When a buyer stops ordering, the seller’s first question is always: was the forecast binding, and under what conditions? Buyers routinely raise a quality complaint to activate a quality-condition carve-out in the MMOQ clause. The timing of the complaint relative to the first missed order is almost always dispositive.
2. The quality complaint mechanism
Contracts in this sector typically overlay § 377 HGB with a contractual complaint procedure: written notice within 30 days, supported by samples and documentation, followed by mandatory independent laboratory testing. A complaint that does not comply with the contractual procedure fails on two independent grounds: the contractual mechanism and § 377 HGB.
3. The independent lab clause
When properly structured, an independent lab clause resolves disputes efficiently. In practice, the parties dispute the scope of testing (what criteria?), the sample size (how many grams from an 80 kg batch?), the defect threshold (what percentage of samples must fail before the batch is condemned?) and the cost allocation. None of these should be left to negotiation after a dispute has already arisen.
4. Payment, advance payments and set-off
A payment clause that triggers from confirmed written delivery — not from undefined ‘acceptance’ or discretionary ‘approval’ — combined with an express no-set-off clause and an obligation to pay the undisputed portion of any invoice on time, is the single most effective way to keep cannabis litigation in Germany short and winnable for the seller. Advance payments should be linked to production milestones and documented as non-refundable once those milestones are met.
II. GMP, GDP and Quality Attribution: Where Did the Problem Actually Arise?
The most common quality complaint in cannabis litigation in Germany is mould — raised by a pharmacy, passed upstream to the distributor, and ultimately presented to the foreign producer as a defect in the delivered batch. In a significant proportion of cases in our practice, the mould was not a production defect at all. It developed at pharmacy or distributor level: improper humidity control, temperature fluctuations in a shared storage space, contaminated packaging material. But the complaint is always directed at the beginning of the chain, not the end.
1. Quality attribution: the central forensic question
In a multi-stage supply chain — GACP cultivator, EU-GMP converter, importer, distributor, pharmacy — quality disputes almost always involve a contested attribution question: at which stage did the problem arise? This question matters both legally and evidentially. Cannabis is not a static product like a synthesised pharmaceutical ingredient. It is a biological material. Moisture content (water activity), microbiological load, terpene profiles and cannabinoid concentrations can all shift along the supply chain as a function of temperature, humidity, light exposure, packaging integrity and time. A batch that is within specification at QP release may be out of specification at pharmacy level — not because anything went wrong at the production stage, but because of what happened afterward.
For litigation purposes, the producer’s strongest argument is that quality deterioration attributable to post-QP-release handling is not the producer’s legal problem. But this argument requires documentary support: the chain of custody must be reconstructable, the conditions at each transfer point must be documentable, and retention samples must be preserved throughout the shelf life of the product.
2. QP release as the liability interface
The Qualified Person (QP) release is the single most important document in a cannabis quality dispute. It is the formal certification, under EU-GMP Annex 16 and the applicable national regulations, that a batch meets all specification and regulatory requirements at the point of manufacture. In litigation, the QP release does two things. First, it establishes a baseline: if the batch was conforming at release, any non-conformance identified downstream must be explained by reference to something that occurred after that point. Second, it shifts the evidential burden: the buyer who asserts that a QP-released batch was defective must explain how the Qualified Person’s assessment was wrong, or how the product deteriorated between release and delivery.
In practice, buyers rarely address this directly. Their complaints tend to describe the condition of the product at the point of pharmacy complaint — often weeks or months after delivery, and after multiple storage and handling events — without engaging with the QP release documentation or the GDP transport records. A well-prepared seller should always lead with the QP release and demand that any complaint be addressed to the specific post-release event that allegedly caused the deterioration. If no such event can be identified, the complaint does not survive scrutiny.
3. GDP documentation and the transport chain
GDP-compliant transport documentation — complete CMR consignment notes, continuous temperature logs, and handover records at each transfer point — is the second line of defence. If the QP release is the proof of condition at departure, the GDP record is the proof of condition in transit. A product that was loaded within specification at a certified facility, accompanied by a full CMR chain and an unbroken temperature log showing no excursion, is very difficult to condemn as defective. The burden is on whoever received it to explain when and how it changed.
Before any complaint is received, foreign sellers should ensure that every batch has a documented QP release, every shipment has a complete and unbroken CMR chain with temperature logs, all handover points are documented, and retention samples are preserved — clearly labelled and stored under appropriate conditions — for the full shelf life of the product. These documents are not a formality. In cannabis litigation in Germany, they are the difference between a defensible position and an indefensible one.
PRACTICAL NOTE ON MOULD ATTRIBUTION
Microbiological contamination — including mould — is almost invariably attributable to storage conditions rather than production. The critical parameters are water activity (Aw) and relative humidity. Cannabis flowers stored above recommended humidity thresholds will develop mould regardless of how they were produced. If your QP release records show a conforming Aw at batch release, and your GDP records show an unexceeded temperature range in transit, the burden is on the buyer to explain what happened in its own storage environment.
III. Licence Due Diligence: Know Your German Partner’s Legal Status
Before signing any supply agreement, verify that the German counterparty holds a wholesale medicinal product licence under § 52a AMG (issued by the competent state authority) and a narcotics trade and import licence under § 4 MedCanG (issued by BfArM). If a licence is still pending at the time of signature, the contract must address what happens to advance payments, production obligations and storage costs if the licence is not granted or is granted with restrictive conditions.
C. Practical Checklist
I. Pre-Dispute Checklist: Cannabis Supply Agreements Under German Law
Use this checklist when reviewing an existing contract or negotiating a new one. Every ‘no’ is a litigation risk.
II. Frequently Asked Questions: Cannabis Litigation in Germany
Cannabis litigation in Germany covers commercial disputes from medicinal cannabis supply agreements: unpaid invoices, quality complaints, BfArM import permit disputes, unlawful set-off, advance payment recovery and purchase commitment enforcement — heard before the Landgerichte in Frankfurt, Munich or Berlin.
Under § 377 HGB, a commercial buyer must inspect goods promptly and notify defects without delay. A complaint raised weeks after delivery is legally dead — regardless of whether the goods were actually defective. This is the single most common reason quality claims fail in cannabis litigation in Germany.
The Urkundenprozess (§ 592 ZPO) is a fast-track documentary procedure that allows a cannabis seller with a clean paper trail to obtain a provisionally enforceable judgment in months rather than years. The buyer’s counterclaims are relegated to separate after-proceedings and do not delay enforcement.
Only if the counterclaim is valid, due and enforceable (§§ 387 ff. BGB). A disputed recall cost claim does not meet this threshold. An invalid set-off leaves the invoice outstanding with default interest running from the original due date.
If the licence is lost through the buyer’s own administrative failure, this is not force majeure and does not excuse non-performance. The buyer also has an independent duty to inform the seller promptly (§ 241 II BGB). Failure to do so gives the seller a separate damages claim for all costs incurred after the point of non-disclosure.
What impressed me about working with Dr. Degenhart is that he understood the operational reality of this market — the supply chain structure, the regulatory timelines, the quality attribution questions that arise in multi-stage chains — without needing it explained twice. In a sector this complex, legal advice is only as good as the adviser's understanding of the underlying business. DMR has that understanding.
— Felix Kühl, Geschäftsführer, mediproCan GmbH
D. Need a Cannabis Litigation Lawyer in Germany?
DMR Rechtsanwälte handles cannabis litigation in Germany for foreign growers, manufacturers and distributors: payment enforcement, quality dispute defence, set-off challenges, BfArM permit disputes and Civil law and “Urkundenprozess” proceedings — in English and German.
If you are in a dispute, or want to avoid one, call or write to us.
Attorney: Dr. Maximilian Degenhart
Contact: DMR Legal
- Maximilianstr. 24
- 80539 München
- www.dmr.legal
- info@dmr.legal
