Friday September 24th 2021
Industry in gold rush mood
Cannabis industry lurks for federal elections
By Tosca Strassberger
Four parties are calling for cannabis to be legalized. If red-yellow-green or red-red-green come to power, Berlin could become the new Amsterdam. German companies suspect a billion dollar business.
After all the excitement of the election campaign, a completely legal joint to relax? This scenario could become a reality: the SPD, Greens, FDP and Left have long been calling for cannabis to be legalized. A shift in political power to the left, whether as a traffic light or a red-red-green coalition, could ignite the turbo.
German companies in the legal medical cannabis market have already positioned themselves: “We are following the outcome of the election with great interest, since under certain constellations the introduction of model projects can be considered very likely,” says Johannes Gallois, importer and managing director of GECA Pharma ntv .
So far, the legal market for psychoactive cannabis in this country has been limited exclusively to medical use. Since March 2017, doctors have been able to prescribe it on a prescription. This means that Germany is starting from pole position in the European market. In the international ranking, the industry came in third with a turnover of 230 million euros last year – albeit with a lot of room for improvement. The front runner is the USA with a turnover equivalent to 6 billion euros for medical cannabis, followed by Canada with 400 million euros.
With cannabis as a legal stimulant, the two North American countries make one and a half to five times as much sales. Alfredo Pascual, an analyst at FastForward, predicts a downright intoxicating market development in an ntv interview if full legalization for adults also comes in Germany. “In Canada there was a turnover of over 2 billion euros in 2020, both as medicine and as luxury goods. But Canada has half the population of Germany. That means, if it is legalized as luxury food here, there will be huge potential . ” According to him, Germany could increase its sales by about seventeen times.
Legalization, yes – but how?
The parties are not primarily concerned with a flourishing cannabis industry in Germany, but rather with drying up the black market and criminalization. However, they disagree on the question of the specific design.
The SPD advocates distribution to adults in the form of model projects in certain cities and municipalities. The Greens and the FDP are for nationwide legal sales in licensed specialist shops and pharmacies. In addition to preliminary model projects and cultivation for personal use, the Left also wants to enable “cooperative and non-commercial cultivation via cannabis social clubs” – a kind of association, according to an issue paper from the parliamentary group.
Either way, “legalization would involve far-reaching legislative changes that would create new sales markets,” says importer Johannes Gallois ntv.de. “However, we are convinced that the focus is on therapeutic benefits and that cannabinoid therapy should be made available to as many people as possible.”
In order to secure the care of patients and to facilitate access, the Left wants to loosen the regulations for cultivation in Germany and overturn the approval requirement of the health insurance companies to cover the costs of therapy. At the moment, around 40 percent of all applications are rejected by the statutory health insurers. It is therefore still a rather unprofitable niche business for pharmacies. The cultivation of cannabis in Germany is currently a delicate plant. Three companies hold a license, but their cultivation quantities are strictly regulated by the state – at least for now. A cannabis-liberal government could change some of that in the next four years.