The three parties that Chancellor Angela Merkel is likely to replace as the next ruling coalition in Germany support the legalization of adult cannabis use, and regulators can draw not only from the country’s existing medical cannabis market, but also from legalizing adult use in others Countries learn a lot from Niklas Kouparanis, CEO of the Frankfurt cannabis holding Bloomwell.
The Social Democrats (SPD), the Free Democrats (FDP) and the Greens are planning a law to legalize cannabis, which will be sold to adults through specialized stores such as pharmacies in the US as soon as the parties sign formal coalition papers after the elections in Germany officially become the new government in September.
The road to legalization
Germany legalized medical cannabis in 2017, and all doctors in the country, with the exception of veterinarians and dentists, can prescribe pharmaceutical cannabis for their patients.
“We had a very dramatic increase in patient numbers and … we had to look after those patients somehow,” Kouparanis told the Cannabis Business Times and the Cannabis Dispensary. “We had a delivery bottleneck in the early days.”
Bloomwell was founded in 2020 as a holding company for several companies, including Ilios Sante, a wholesaler and distributor of medical cannabis, and Algea Care, a telemedicine provider that has more than 70 specialized doctors on its platform to treat Germany’s patients with medical cannabis.
Supply and demand regulated over time, Kouparanis said, and while domestic cannabis production is only about 2.6 tons per year, several companies are now importing cannabis into Germany for medical purposes.
While the SPD, FDP and the Greens are negotiating the coalition papers, which are expected to be signed on December 6th, the parties have agreed on the legalization of cannabis for adults, which is likely to lead to further supply shortages in the German market.
“When the Rec market opens, we expect … [a demand of] 100 to 200 tons annually, immediately, ”said Kouparanis. “So with 2.6 tons [domestic production capacity], it will not be enough to actually satisfy the recovery market and the patients we need to care for. “
With around 83 million inhabitants, Germany would be one of the largest cannabis markets in the world for adult consumption. For comparison, Canada, which legalized adult use in 2018, has 38 million residents, while Uruguay, which legalized cannabis in 2013, has 3.5 million residents.
“This is of course a great opportunity for the cannabis industry, but on the other hand there are still a lot of questions,” said Kouparanis.
Once the coalition papers are signed, the new government will have to draft a formal law on adult cannabis use, which the German Bundestag, known as the Bundestag, will pass. Kouparanis said he doesn’t anticipate full legalization before at least 2023.
“Still, these are very exciting times for the cannabis industry,” he said. “It is very likely that another market will open up, and … these are very interesting times for our company.”
Germany has a lot to learn from other countries that have legalized adult cannabis, Kouparanis said, citing Canada as an example.
“I think the problem in Canada then, and indeed still is, that a lot of red tape … has prevented legalization and promoted the black market rather than actually emptying it,” he said.
Canada has clear advantages over Germany, such as an adequate supply of cannabis. For example, according to Health Canada reporting data as of March 2021, there were 63.7 million packaged units of cannabis products in inventory by growers, processors, distributors and retailers in the country for the month, 5.5 times total sales (11.6 million packed) corresponds to units).
“They had the infrastructure to produce a lot of cannabis, but the downside was … they didn’t have any significant distribution channels,” said Kouparanis. “What we need is an existing infrastructure that has to be set up very quickly, as well as the delivery or distribution of cannabis to customers and consumers in Germany.”
Germany can also look for lessons on regulating adult use in its nearly five-year-old medical cannabis market, Kouparanis added.
Medical cannabis legalization happened “overnight,” he said, which resulted in many industry stakeholders scrambling to gain a foothold in the market. Doctors, for example, were not trained in medical cannabis, and importing products into Germany was difficult, which contributed to the country’s supply shortages early on.
“If we look at the medical market, we missed it [an] Opportunity in the medical market to win over all stakeholders [at] a table, ”said Kouparanis. “I would like this to happen this time, when we open up the recreational market, get regulators, politicians and … cannabis entrepreneurs to actually sit down and discuss how we can do that.” Efficient, to … empty the black market, which is the most important part of the whole exercise. And on the other hand, of course [discuss how we can] Generate tax revenue for Germany, … satisfy customers and have the right quality and supply for it. “
Cannabis imports will be key to adequately supplying the German market for adult consumption, he added, as domestic production remains limited.
“If Germany does not allow imports, we have a huge problem,” said Kouparanis. “It will take a long time to meet consumer needs in Germany.”
Pharmacists should be employees in adult retailers, he added, in order to maintain the quality of the cannabis sold and to educate consumers about the products.
If the new government manages to pass its legalization proposal, Germany would be the first European nation with a regulated adult cannabis market.
Although Luxembourg announced laws on adult use in October, the draft law is still pending.
According to Forbes, legalization in Germany could generate more than 4.7 billion euros in annual tax revenue and, according to POLITICO, create around 27,000 new jobs.
“That’s a large number, and of course we all suffered from the pandemic,” said Kouparanis. “Germany had to invest heavily in its economy and this tax revenue is urgently needed. So I think it’s a great opportunity … for politicians to make huge amounts of money to help the economy. Why shouldn’t that happen? “
Legalization would also save the country money on law enforcement, he added. “The current status is not acceptable. … They criminalize people and spend a lot of money on the police, and that shouldn’t happen anymore. “
While many questions remain about Germany’s cannabis policy reform efforts, Kouparanis is optimistic about the new government’s legalization push.
“The program is still in its infancy,” he says. “There are still many question marks and a lot of people still have to come together – every single stakeholder – and discuss how we can make this big change in policy.”