As of: March 24, 2024, 5:09 a.m
By: Lisa Mayerhofer
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The legalization of cannabis has passed the final hurdle.
The cannabis industry is now hoping for an upswing – at least in the medical sector.
Berlin – The hotly contested legalization of cannabis cleared the final hurdle in the Federal Council on Friday (March 22nd).
“The cannabis policy of the last ten years has failed,” said Health Minister Karl Lauterbach (SPD) after the Federal Council vote in Berlin.
He wants to use legalization to limit risks and push back the black market for contaminated substances.
Some of the cannabis industry is now hoping for an upswing - others are in crisis.
Lauterbach: “I was against cannabis legalization for years”
Legalization is a turning point in drug policy.
Lauterbach cited a doubling of consumption among children and young people and a doubling of the number of drug deaths as an explanation.
In addition, the black market is getting bigger and bigger.
"It could not go on like that.
I was also against cannabis legalization for years, but the studies show that we need a new offer here.”
The SPD politician said he expected that 75 percent of the black market could be pushed back.
Regarding warnings from Saxony and Bavaria that legalization would open Pandora's box, Lauterbach said: “Pandora's box is wide open, and with this measure today that we are fighting the black market, we are trying to close Pandora's box .”
There will not be a leisure market with cannabis shops in Germany any time soon
But what does this mean for the legal cannabis market?
The expectations of legalization were initially huge.
In the hope of lucrative business, start-ups are entering the market, celebrities such as Mario Götze, Moritz Bleibtreu and the US rapper Snoop Dogg are investing in cannabis companies.
Legalization seemed to be the next big thing and Germany as a big market also seemed promising from a foreign perspective.
Providers from Switzerland, Canada and the USA have long been warming up.
But the partial legalization of cannabis for recreational use does not go nearly as far as the traffic light government's coalition agreement.
Cannabis is to be removed from the Narcotics Act, where it is currently listed as a banned substance alongside other drugs and is subject to criminal penalties.
Possession and home cultivation of limited quantities should be permitted for adults from April 1st.
And in clubs (“cannabis clubs”), members should be allowed to grow the drug together and give it to each other.
However, the previous plan to sell cannabis to adults in specialist shops has been postponed.
This will initially be tested in model projects in Germany - the outcome is uncertain.
The legalization of cannabis has passed the final hurdle.
(Symbolic image) © IMAGO/Frank Hoermann / SVEN SIMON
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This is putting some cannabis companies in trouble, industry experts observe.
The gold rush mood has long since given way to disillusionment in the competitive market.
Things have become quiet about new cannabis business ideas from actors or footballers.
And companies like the Berlin start-up Cantourage, which went public in autumn 2022, gave investors little joy after the Bundestag decision.
One thing is clear: There will not be a recreational market with cannabis shops like in the Netherlands and some US states in Germany for the time being.
“The fact that home cultivation is now being allowed to a limited extent does not help the industry,” says Alessandro Rossoni, founder of the medical cannabis company Nimbus Health.
The same applies to cannabis clubs.
Some cannabis companies got into trouble, others disappeared or were bought out.
According to specialist media, several cannabis re-importers went bankrupt.
Hope for an upswing in cannabis in the medical sector
The cannabis industry industry association still sees an upturn for the companies.
“Home cultivation and cultivation clubs as self-sufficiency options are not commercial in themselves, but they require infrastructure, equipment and services,” says Lisa Haag from the Technology, Trade & Services Department.
Jakob Sons also sees advantages in partial legalization.
He is co-founder of Cansativa from Mörfelden-Walldorf in Hesse, which trades in medical cannabis.
The annual turnover is around 17 million euros.
He says: “It’s not a big achievement, but it’s an important step in the global trend towards destigmatizing cannabis.” There is also now a little more regulatory clarity.
Since cannabis is to be removed from the Narcotics Act from April, doctors will be able to prescribe medical cannabis more easily.
The reservations of medical professionals are still great.
“With partial legalization, we expect significantly more cannabis patients in Germany,” says his brother and founding partner Benedikt Sons.
Investments therefore focused on the medical sector.
The enormous requirements for pharmacies will also be noticeably reduced with partial legalization.
After legalization: “Acceptance among doctors is likely to increase”
Cannabis as a medicine has experienced a boom since liberalization in 2017.
Sick people can have the substance prescribed by their doctor, for example against spasticity in multiple sclerosis or chronic pain as well as nausea and vomiting after cancer chemotherapy.
According to market researcher Insight Health, around 77,000 cannabis patients in Germany received at least one prescription in 2023, plus private self-payers.
But the documentation requirements for doctors have so far been high.
In medicine, partial legalization will help the industry, says Alessandro Rossoni, founder of the medical cannabis company Nimbus Health, who is planning new cannabis products.
“Acceptance among doctors is likely to increase.”
“Cannabis will become, so to speak, the equivalent of Ibuprofen 600,” says the CEO of Cannamedical Pharma, David Henn, to
Wirtschaftswoche
.
He predicts: “Compared to current conditions, we assume that the market will increase three to five times in the next 18 months.” In Canada, after its release, around one to two percent of the population will use cannabis as medicine, the industry hopes for similar growth.
With material from dpa and AFP