Dinafem, the fall of a giant

On September 16, Dinafem's parent company, Pot Sistemak, which also houses La Mota, was raided and placed under judicial supervision. Some fifteen people were immediately arrested by the Guardia Civil as part of an «anti-drug operation» and the company placed under judicial supervision, forcing the closure of their distribution channels, including their websites.

The company, founded in 2005 and now Spain's largest seed bank, was suspected of «crimes against public health», «criminal organization» and «money laundering», casting a pall over the future of many cannabis businesses in the peninsula.

What is the status of seed banks in Spain?

While Spain has tolerated cannabis for many years, whether through the establishment of a large number of dedicated companies or the greater or lesser flexibility, depending on the province, surrounding Cannabis Social Clubs, the country does not authorize the cultivation of cannabis at +0.2% THC for professional purposes, whether for flowers or seeds, and with the exception of a few rare medical or scientific licenses.

Seed banks are therefore legal in Spain, provided that they do not select and cultivate the plants from which they obtain the seeds themselves, and that no illegal activities are carried out by the company's employees or managers.

The latest developments in the Dinafem case

A recent press release of the Guardia Civile provides more information on this operation, which began in 2018.

«More than 2,100 plants of different cannabis varieties and a multitude of seeds were seized, reportedly worth several million euros to the Organization, and 11 large cannabis plantations were also dismantled.

At one of the sites, a laboratory equipped with state-of-the-art technology for the manipulation and genetic control of released varieties was located. In this laboratory, an exhaustive genetic evolution program was carried out on the seed, which once completed, gave rise to its mass production. Some 20,000,000 seeds of different cannabis varieties not authorized for sale in the European Union were created inside, with an estimated market value of over €100,000,000.

Several sites with illegal electricity connections were also located, further increasing the Organization's profits by growing the seeds at no cost.»

Other criticisms include the content produced by the company or the advice given by its teams:

«The organization's commercial activity, in addition to providing what is needed for cultivation, included all kinds of teaching (mail consultations or tutorials) on cannabis cultivation through social networks, including through personal advice, promoting the consumption of this type of product without any optional approval. The marketing used by the organization included videos that were then uploaded to social networks with the aim of advertising cannabis strains previously developed at its facilities.»

The procurement model was also scrutinized and «managed to determine how the Organization was using paid growers located in Guipúzcoa and Navarra to obtain crops of the cannabis varieties [...], paying these people for their work, but with prices well below those they later obtained on the market and also making it difficult to locate the crops.»

International seed shipments were also reported and over €20 million seized in goods and bank accounts.

Pot Sistemak briefly communicated at the end of September that their legal team was «working hard to get us back up and running as soon as possible».