Curaleaf Holdings Inc. Executive Chairman Boris Jordan and other cannabis executives on Friday praised Germany’s removal of cannabis from a list of narcotics as a potential boost to the marijuana business, as stocks in the sector rose.
The comments came after German lawmakers paved the way for the creation of nonprofit “cannabis clubs” for the purchase of cannabis by adults 18 and older, with restrictions on advertising and promotion.
As a compromise, the law stopped short of sanctioning commercial cannabis sales.
Under the law approved by the Bundestag, Germany’s parliament, starting April 1 adults will be allowed to grow and possess limited quantities of cannabis for personal consumption.
Non-commercial cultivation clubs will be legal starting on July 1.
Curaleaf
CURLF,
ranks as the largest U.S. cannabis company by market capitalization, and has a presence in Germany through its acquisition of a majority stake in Four 20 Pharma for about $20 million in 2022.
“Today’s development represents a significant first step towards broader legalization in Europe’s biggest economy, and the potential domino effect this may have on other European markets is not to be underestimated,” Curaleaf’s Jordan said in a statement emailed to MarketWatch.
Curaleaf’s stock rose 3.1% on Friday, while the AdvisorShares Pure US Cannabis ETF
MSOS
advanced 3.3%. Other cannabis stocks from U.S. companies with little or no direct exposure to Germany also moved up. Trulieve Cannabis Corp.
TCNNF,
gained 6.4%, Green Thumb Industries Inc.
GTBIF,
rose 1.5% and Cresco Labs Inc.
CRLBF,
climbed 3.9%.
Tilray Brands Inc.
TLRY,
dropped 2.5% and Aurora Cannabis Inc.
ACB,
gained 1.5%. The Canada-based companies both supply the German market.
Other cannabis executives with a presence or interest in the German market also issued upbeat comments.
Niklas Kouparanis, co-founder and chief executive of German cannabis company Bloomwell Group, said the vote marks the biggest moment for the industry since the legalization of medical cannabis in March 2017.
“The most significant aspect of the law involves the medical market, and the reclassification of medical cannabis as a non-narcotic,” Kouparanis said.
He sees demand for medical cannabis growing “rapidly and significantly,” with an expected increase in patient numbers of up to 10x over the next year.
“Doctors will be able to prescribe cannabis as they would any Rx prescription and prices will be more affordable for patients,” Kouparanis said.
Adam Wilks, chief executive of cannabis-licensing company Carma HoldCo, which handles brands for public figures including Mike Tyson and Ric Flair, said the company now sees a “gateway to expand our offerings into a burgeoning market” in Germany.
Also read: Canadian cannabis giant Canopy Growth seeks shareholder approval to speed up entry into U.S. market
Michael Sassano, chief executive of Somai Pharmaceuticals, a European company that distributes pharmaceuticals containing cannabinoids, said the move is being seen as a “first big step” for regulators in the European Union and globally to help “provide a safer alternative to what Big Pharma is currently providing.”
Jason Adelstone, a senior associate at cannabis law firm Vincente LLP, said the German government has “turned the page” on pot prohibition.
“With Germany joining Malta and Luxembourg in acknowledging that regulation, rather than prohibition, better protect the health and safety of its citizens, it could help propel other European Union nations to do the same,” Adelstone said.
Also read: New York cannabis farmers may have to throw away 250,000 pounds of product due to retail-store bottleneck
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