Europe is overcoming the stigmatization of cannabis's medical benefits
Despite a quiet end to the year, the cannabis stock sector is booming, with more legalization and decriminalization of marijuana in the United States and abroad rapidly expanding. Investors want to know more about the cannabis investment opportunities from industry-leading experts.
Today, we chatted with Niklas Kouparanis of Bloomwell Group. Kouparanis is one of the first entrepreneurs in Germany to successfully gain a foothold in the medical cannabis market and recently closed a seed funding round of over $10 million, the highest publicly known seed investment for a European cannabis company to date. Among investors in Bloomwell Group is new board member, Curaleaf's Boris Jordan. Nik is a great resource for discussing the path to adult-use legalization in Germany, widely expected to become the largest cannabis market in Europe.
Schaeffer's: How has cannabis legalization developed in Germany as compared to other countries?
Niklas Kouparanis: Germany has been the leading European medical cannabis market since March 2017, with the passing of the law “Cannabis als Medizin.” Today, there are more than 100,000 medical cannabis patients in Germany, despite there being closer to 800,000 patients in the country who could benefit. Recreational cannabis was and still is illegal in Germany, however our new government has announced it will legalize cannabis nationwide.
We expect a full national adult-use rollout, not a pilot program, or a gray market as we saw in the Netherlands. Germany will most likely be the largest adult-use cannabis market in the world by 2024; and may be the first country to fully legalize cannabis for recreational purposes in line with the UN Single Convention on Narcotic Drugs of 1961, in contrast to Canada and Uruguay.
Economist Justus Haucap has predicted a demand of 400 tons of cannabis annually in Germany. With such high demand, we will depend on imports, which could be a big business opportunity for US growers once international trade can be done legally.
Schaeffer's: In Germany today, what are the misconceptions about cannabis usage – legal or illegal?
Niklas Kouparanis: Germany is by far the leading European country when it comes to cannabis patient numbers, however so far only medicinal cannabis is legal, along with cosmetic CBD products. Additionally, cultivators are allowed to grow hemp with a maximum of 0.2% THC, but fortunately the EU recently changed that to 0.3%.
Schaeffer's: What are the stigmas you identify as obstacles in widespread understanding of cannabis’ medicinal benefits? How do you think Germany can best overcome these stigmas?
Niklas Kouparanis: The good news is that we are overcoming stigmatization. The primary issue is a lack of knowledge and expertise among doctors in the medical field—only 2% of doctors have prescribed cannabis so far. The endogenous cannabinoid system has not been a part of the curriculum in Germany, so education is crucial if we want to make use of medicinal cannabis and help patients with chronic medical issues live better lives. Along with our portfolio company Algae Care, Europe’s leading cannabis telemedicine company, we have already helped more that 5,000 patients with 60 doctors working hand in hand.
Schaeffer's: Do you have concerns about the marketing of cannabis upon legalization in Germany?
Niklas Kouparanis: We expect that marketing will be very limited, and advertising will not be permitted at all. However, the upcoming adult-use market will likely provide opportunities for lifestyle brands. An even larger opportunity for the recreational market will be cannabis expertise. We anticipate former medical companies and industry pioneers will emerge as market leaders.
Schaeffer's: Are there cannabis criminal laws universal in the country? What are they?
Niklas Kouparanis: As of now, adult-use cannabis cultivation, sales, and ownership is illegal anywhere in the country. Prosecution is different at the state level, but we may soon see the decriminalization of possession up to 6 grams. With a legal adult-use market on the horizon, criminal laws will eventually become irrelevant. Though, we still don’t know if growing at home will be allowed.
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