Intoxicating billion dollar business: will Germany miss the cannabis boom?

Just two years after it was founded, the Berlin Sanity Group is one of the largest cannabis companies in Europe. Football professional Mario Götze is also investing in the startup, which earns its money with medical and wellness products. The large sums of money flow elsewhere.

If Finn Hansel looks to the USA, Canada, Mexico, Uruguay or Israel, he sometimes gets a little jealous. Because there many people can either legally buy marijuana and smoke a joint in the store, either now or very soon. And Germany? Doesn't get anywhere with the legalization of cannabis. "Germany is one of the more conservative countries when it comes to drug safety, patient safety and consumer safety," says the cannabis entrepreneur in the ntv podcast "Wieder Was Learned". "That is also correct, but you can see that there are more and more."

Almost unnoticed, four US states voted on November 3rd not only on Donald Trump and Joe Biden, but also on the legalization of cannabis. The plant from the group of hemp plants, the female part of which contains psychoactive substances that are intoxicating when smoking, has won with waving flags in Arizona, Montana, New Jersey and South Dakota. This means that 37 US states, that is 70 percent of the US population, now allow legal smoking. In most cases for medical reasons, but a third of the country also just like that. Soon, that could be the case anywhere: On Friday, the US House of Representatives voted to remove marijuana from federal narcotics law in the United States.

This plan is also being pursued further south, in Mexico. There only the lower house of parliament has to agree, then the third state after Uruguay and Canada would have legalized cannabis nationwide. The topic is also on the agenda in New Zealand, Luxembourg and North Macedonia. Even Israel, under the conservative Likud government, is pushing legalization. The United Nations Narcotics Commission removed cannabis from its list of the most dangerous drugs in early December.

In the boat with Mario Götze

Finn Hansel welcomes this development – no wonder, he makes his living with the distinctive hemp plant. The native of Flensburg and his business partner Fabian Friede founded the Sanity Group two years ago, with which they want to develop the "health benefits of cannabinoids", so it says on their website. Seems pretty successful so far. At the end of November, the Sanity Group welcomed several new investors, including the American singer Will.i.am from the hip-hop group Black Eyed Peas, professional soccer player Mario Götze and presenter Klaas Heufer-Umlauf.

"We have focused on the two markets that are possible in Germany," says the head of the Sanity Group. "On the one hand, this is medical cannabis that doctors have to prescribe. The second topic is CBD, in other words cosmetics, wellbeing products and hemp extracts in dietary supplements. It got off to a very good start Europe."

CBD stands for cannabidiol. This is one of more than a hundred active ingredients that can be found in the cannabis plant. Unlike THC, the best-known cannabinoid, CBD has no intoxicating effects and is therefore not subject to the Narcotics Act. It still works, just different. Research says it helps you focus, for example, and sleep better with it. Inflammation can also be avoided, muscles seem to relax better after exercise. "These are very interesting properties for athletes," says Finn Hansel. "It is of course exciting to see together with Mario Götze in the future whether we can incorporate his knowledge into our products."

No professional athlete needs to have concerns when using products containing CBD such as oils, gels, sprays, capsules, juices, chocolates, teas, soaps or candles. The world doping agency Wada removed the substance from the doping list in 2018. An opportunity that American sports leagues immediately seized. Both the NFL football league and the UFC martial arts association are working with the Canadian cannabis company Aurora to find out whether cannabidiol can naturally relieve the pain of these very brutal sports.

Right to be intoxicated?

The Sanity Group sells its CBD products under the Vaay brand in its online shop. These do not contain THC, which in Germany falls under the Narcotics Act. The cultivation, sale and purchase of THC are prohibited, only consumption is permitted. In principle, possession is also prohibited, but if the quantities are small, the judiciary generally refrains from prosecuting them. In most federal states, the upper limit is 6 grams, the particularly indulgent Berlin even allows up to 15 grams of marijuana in your pocket.

Because Article 2 of the Basic Law states that we are free to develop our personality. Several constitutional lawyers are therefore of the opinion that a "right to be intoxicated" applies in Germany and that the Narcotics Act in its current form is unconstitutional. After all, as much beer and schnapps as you think fit are allowed. But there are even more arguments in favor of legalization, says Finn Hansel. In Canada, to the delight of health insurers, many people would replace their alcohol consumption with cannabis, he says. The economic aspect also plays a role, the tax revenue could be put into drug prevention and education. The police would also be helpful if they did not have to prosecute drug offenses on a small scale.

But these arguments have not yet convinced everyone in Germany. Left, FDP and Greens have been in favor of legalization for some time, and the SPD also wants to see at least once what happens when the countries decriminalize cannabis in model projects and sell it in a regulated manner. But the AfD and especially the Union are still against it for health reasons. Annoying for the head of the Sanity Group, after all, almost 20 years ago as a 19-year-old in his native Schleswig-Holstein, he fought to legalize medical cannabis – as chairman of the Junge Union in Flensburg. But then, as now, it is difficult to convince your party colleagues.

Missed your chance?

"Cannabis is still stigmatized. The big question: Would you like to legalize a third drug after alcohol and nicotine?" Says the entrepreneur. On the other hand, it must be said that the drug ban policy of the past few years has failed. There have been no major improvements in the number of drug deaths. As in the USA and Canada, cannabis must be rethought, says Hansel. And he is convinced: The thought patterns are dissolving, albeit slowly. He estimates that it will take three to ten years before legalization begins to move – depending on the political constellations in the Bundestag. But then, from an economic point of view, it might already be too late.

The Sanity Group collected around four million euros in November from its new investors – including the Bitburger Group. The total investment amounts to around 25 million euros. Constellation Brands, one of the largest liquor companies in the world, bought Canopy Growth, the world's largest cannabis company, for four billion dollars more than two years ago. The American-Canadian co-production wants to jointly develop beverages with a cannabis flavor or cannabis effect. For a market that could be larger than that for alcohol in just a few decades. Analysis firm Grand View Research estimates cannabis companies will have sales of $ 73 billion in 2027. Almost 90 percent of this currently ends up in North America.

"You can see the problem when you look at the small inquiries in the Bundestag. The FDP in particular keeps asking openly: Are we ruining a market in Europe because we are so strict while business in Canada is flourishing? And if we are open, is it already too late for the local industry? "warns Finn Hansel. "As with the Internet of Things, with autonomous driving and e-mobility, Germany has to be careful not to miss another chance in the end."

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