Last month, Germany’s new coalition government revealed that it planned to legalize marijuana for recreational use. This announcement has catapulted the country’s budding marijuana industry to new highs, with companies involved in the market now focusing on growing.
CEO Synbiotic is one of the companies that would like to establish a chain of dispensaries which would offer a full array of cannabis-related products — everything from edible gummies and flower to tinctures. The company is a major player in the country’s nascent cannabinoid sector, investing in everything from researchers to cultivators and distributors.
Many believe that legalization would be a game-changer for the international business of growing and selling cannabis. If the plan is actualized, the country would join Uruguay and Canada, which are the only countries that allow the commercial sale of recreational marijuana. Apart from the two nations, a number of states in the United States have also legalized the recreational use and sale of marijuana.
Demecan managing director Constantin von der Groeben stated that the herb’s legalization would make Germany the biggest country to allow the sale of marijuana globally, in terms of population. Demecan is the sole independent company authorized to produce medical marijuana in Germany. It is involved in every process of manufacturing marijuana, from growing and processing to storage and delivery.
Germany legalized the use of marijuana for medicinal purposes in 2017.
While the government’s intentions on legalization are still unclear, the three coalition partners revealed that fiscal arguments played a role in their decision to legalize the plant. Findings from a recent study show that decriminalization could deliver net benefit of more than €4.5 billion ($5.1 billion) to the state annually. This figure was inclusive of about €1.3 billion ($1.47 billion) in savings on legal costs and police costs and roughly €2.8 billion ($3.17 billion) in tax revenue.
The announcement also triggered increased interest in the sector, which skeptics believe will subside just as quickly. Some give the example of Canada where excitement about cannabis legalization in 2018 faded after the market’s growth fell short of expectations.
However, this boom and bust may not occur in Germany, as barriers to entry remain high. Only three firms in the country have a license to grow the plant: Demecan, Aurora and Aphria, with the last two being subsidiaries of Canadian companies. The companies are all required to adhere to a good manufacturing practice (“GMP”) standard, which is a globally standard for pharmaceutical products.
For cannabis companies such as Flora Growth Corp. (NASDAQ: FLGC) that are keeping an eye on the international market, the news out of Germany brings hope that a lot more countries could soon open their markets to marijuana and avail growth opportunities for established companies in that industry.
NOTE TO INVESTORS: The latest news and updates relating to Flora Growth Corp. (NASDAQ: FLGC) are available in the company’s newsroom at https://cnw.fm/FLGC
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