Lars Müller wants to create Starbucks for cannabis: a chain of stores that will offer a complete range of products related to marijuana, from dyes to flowers and gummy candies.
“We want to build a network with the same level of quality throughout Germany — something that has the professionalism of an Apple Store,” he said. “It won’t be an opium den.”
Müller is chief executive of Synbiotic, one of the leading companies in the growing German cannabinoid sector. The company invests in everything from cannabis production to research and distribution. It is an industry that is experiencing a high of epic dimensions.
That rise was prompted by the announcement, made in late November by the three parties that form the new German coalition government, that they intend to legalize marijuana. With the news, Synbiotic’s stock price doubled.
The government’s exact intentions are still unclear: it says only that it will allow “the controlled sale of cannabis to adults for recreational purposes in licensed stores”. No further details were given, nor was a timetable for legislative action presented.
Still, the plan could set a game-changing precedent in the global marijuana growing and selling business — a precedent that will be closely watched by other countries studying the possibility of liberalizing their own drug laws.
“Germany will become the most populous country in the world to allow the sale of cannabis,” said Constantin von der Groeben, managing director of local producer Demecan. “It’s a tremendous opportunity for us.”
If the plan is approved, Germany will join a select group of countries that allow the commercial sale of cannabis for recreational purposes — the only others being Canada and Uruguay, in addition to a few US states. For most great nations, this is still virgin territory.
But for the parties that make up the German ruling coalition — the center-left SPD, the libertarian FDP, and the unconventional Greens — marijuana legalization is something whose advantages are not in doubt, being one of the few causes over which ones can easily agree.
Tax arguments were also part of the calculation. According to a recent study by the Heinrich Heine University in Dusseldorf, marijuana decriminalization could provide the state with a net benefit of €4.7 billion (BRL 30 billion) per year, including €2.8 billion (BRL 17.8 billion bi) in tax revenue and €1.36 billion (R$8.6 billion) in police and legal expenses that could be saved.
Predictably, the coalition’s announcement sparked a surge of interest in the industry. Stefan Langer, founder of small cannabis producer Bavaria Weed, was featured in the tabloid Bild Zeitung this month sporting a wreath of leaves and carrying bags of marijuana sprouts, under the headline “I want to be the king of marijuana in Germany.”
But skeptics urge caution and point to Canada, where the wave of interest sparked by legalization in 2018 quickly faded. Although 73 cannabis companies began selling their shares on the country’s stock exchanges between 2016 and 2019, initial enthusiasm melted when growth fell short of expectations.
“It was a lot of financial hype, and too much material was put on the market,” Muller said. “Most companies are still not making money.”
The situation in the United States also played a role. “There was great expectation that President Biden would legalize cannabis at the federal level, and the fact that that didn’t happen disappointed a lot of people,” explained Kyle Detwiler, chief executive of Colombia-based cannabis producer Clever Leaves Holding. “This had a huge impact.”
But a Canadian-like boom-and-bust cycle is unlikely to replicate in Germany. This year, companies were able to grow medical cannabis in the country, and German doctors have been authorized since 2017 to prescribe marijuana under various presentations. But so far, only three companies have received the cultivation license: Demecan and Canadian subsidiaries Aphria and Aurora.
The three companies must adhere to “good manufacturing practice,” or GMP, an internationally agreed standard for pharmaceuticals. Some people consider the standard inappropriate for marijuana for recreational purposes.
“The GMP is totally excessive,” said Muller. “We need a whole new standard, something in between food and pharmaceutical quality.” He suggested that the German purity legislation, in force for 500 years, which defines the ingredients that can be used in the production of beer, be followed.
Von der Groeben, from Demecan, sees the GMP as an essential emblem of quality. “We need to win the public’s trust. We cannot throw that trust away by degrading standards,” he said. “The fact that cannabis is euphoric means we need to ensure it is of the highest quality possible, free from contaminants.”
On the other hand, he pointed out, some of the rules contained in strict German “narcotics handling guidelines” may have to be relaxed after legalization.
For example, these rules oblige the country’s cannabis production facilities to appear military strong, with the product stored in the equivalent of high-security bank vaults. Demecan’s production facility occupies an area of 5,000 square meters in a former slaughterhouse on the outskirts of Dresden, enclosed within reinforced concrete walls and roofs and surrounded by state-of-the-art surveillance cameras and alarm systems.
“Video surveillance and anti-theft alarms are important, but the kind of bunker-like systems we have today may not be necessary,” said Von der Broeben.
But experts predict Germany will proceed with caution, at least in the early stages of the industry. Berlin will do everything possible to prevent incidents such as the outbreak of “lung injuries linked to the use of electronic cigarettes” in the US in 2019.
“What would happen if a candy that was supposed to contain 5 mg of THC contained 100 mg?” Detwiller asked, alluding to the euphoric component of cannabis. “What would the young people and children who consumed the candy look like?”
“If I were the German government, I would start slowly. I think the government will be very careful about this.”
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