Cannabis stocks get buzzed on Germany’s easing of laws
Germany's Cannabis Legalization Spurs Stock Surges and Industry Expansion Plans.
Last week, Germany’s upper house, the Bundesrat (made up of federal state delegates), passed legislation to legalize cannabis starting April 1, 2024, but with limitations. The move prompted several cannabis stocks to jump on the hope for additional revenue streams.
Canopy Growth Corporation watched its stock pop by 68% on Friday, while MediPharm Labs Corp. saw its stock jump 19%. IM Cannabis Corp. popped by 44% and Village Farms International Inc. stock got an 8% lift on the news on Friday.
While it doesn’t open up an adult-use market, the new law will allow adults to cultivate, possess, and keep cannabis for their consumption. Under the new legislation, adults can possess up to 25 grams (just under one ounce) of cannabis in public and up to 50 grams (just under two ounces) at home. It also permits adults to cultivate up to three cannabis plants at home and allows for the operation of “cannabis social clubs” (up to 500 members), from which adults can obtain up to 50 grams per month.
The law also removes medical cannabis from Germany’s narcotic list, a change that is expected to remove barriers to patient access.
MediPharm
MediPharm said that its wholly owned subsidiary Beacon Medical holds a suite of German GMP medical cannabis licenses to import, wholesale and distribute GMP cannabis products. In 2024, MediPharm has increased the German product approvals under the Beacon Medical brand from 5 to 14. It has also partnered with STADA, a large global consumer health and pharmaceutical company, as its exclusive medical cannabis supplier. MediPharm said that all of these German medical cannabis activities are supported by the company’s manufacturing sites in Ontario, which each maintain GMP licensing permitting export to Germany and other international jurisdictions.
Canopy Growth
Canopy Growth was thrilled with the news and plans to expand its commercial presence in the country through the German-based and Storz & Bickel vaporizer brand, as well as the company’s medical cannabis product offerings through Canopy Medical which collectively position Canopy Growth as a top three player in the German cannabis industry.
“This legislation represents a very important and long-overdue step to end the criminalization of cannabis in Germany and sets an important example for the whole of Europe,” said Jürgen Bickel, Managing Director of Storz & Bickel GmbH. “With more than 20 years working in the cannabis industry, constantly advocating for legalization in Germany, I’m proud that consumers will now have a safe and legal environment for cannabis consumption and that Storz & Bickel will be there to provide the highest quality vaporization devices from a proud German brand.”
For Canopy Medical, the classification of cannabis as a non-narcotic is expected to prompt more patients to proactively engage with their physicians regarding medical cannabis, immediately paving the way for increased access, education, and awareness.
“The re-classification of cannabis as a non-narcotic is a game-changer for patients and physicians who will be empowered to better explore cannabis as a viable treatment option for an expanded range of condition,” said Tara Rozalowsky, Chief Growth Officer & President, of International Canopy Growth. “We are thrilled to be able to continue serving the medical community by delivering high-quality cannabis products that meet patient needs and we look forward to increasing our already leading presence in the German medical cannabis market.”
IM Cannabis
IM Cannabis said that the German medical cannabis market is expected to deliver strong growth, providing IMC Germany with an opportunity to further accelerate growth in 2024 after delivering 180% growth in 2023. IM Cannabis said it was number one in sales per SKU within the German flower market. It also claims to have the highest growth in the German market and is the number five distributor in the country. IM Cannabis said in a statement that it grew +180% in 2023 while the market only grew +20%.
“We have been working toward this moment for the last 4 years,” said Richard Balla, CEO of IMC Germany. “We have the entire infrastructure in house. We are EU-GMP certified to repack bulk. We have an EU-GDP-certified logistics center to store cannabis and are delivering IMC Cannabis to any pharmacy in Germany within 24 hours. Our team has extensive cannabis as well as pharmaceutical experience. We have all the necessary supply agreements in place to support accelerated growth. We believe that we are well positioned and are looking forward to growing significantly as the German market evolves as a result of the new legislation,” concluded Balla.
Curaleaf
Just last week, Curaleaf announced it was buying Northern Green Canada (NGC) for expansion purposes in Germany. The deal is expected to close in the second quarter of 2024 and the value of the acquisition was not disclosed. NGC has consistently supplied high-THC, non-irradiated flower to the German market, which is expected to see exponential growth following the recent removal of cannabis from the narcotics list.
Juan Martinez, Head of Curaleaf International said, “As a company deeply invested in the European cannabis landscape, we are excited about the opportunities this legislation brings. With a robust regulatory framework in place, we anticipate broader insurance coverage, reduced administrative burdens for prescriptions, and a substantial growth trajectory for both the medical markets and eventually the regional model projects with commercial supply chains. This growth, coupled with the potential domino effect on other European markets, positions Germany as a trailblazer in shaping the future of cannabis in Europe.” Curaleaf International’s subsidiary network includes Curaleaf Clinic, Curaleaf Pharmacy, and Curaleaf Laboratories within the UK. Additionally, it extends to the Terra Verde cultivation facility in Portugal, the Medalchemy research and development site in Spain, the Four20 Pharma wholesaler and distributor in Germany, and the Polish wholesaler Can4Med.
Village Farms International
“This is a milestone in the journey towards the legalization of cannabis for personal use in Europe and globally. Village Farms has a strong link to the German market, having received our EU GMP certification from the District Government of Dusseldorf in 2022. We began shipping our best-selling Canadian strains to Germany in the second quarter of 2023 and have been adding both local distributors and revenues since then. The German cannabis market is already core to Village Farms’ international cannabis strategy and, along with our participation in the Netherlands’ legal recreational cannabis program, central to our focus on legal cannabis opportunities in Europe,” said Michael DeGiglio, President and Chief Executive Officer, Village Farms.
