In Germany, cannabis ‘made in Germany’ aims to take off

An old slaughterhouse in the middle of the fields. In this banal eastern German setting, an activity that is much smaller flourishes: Europe’s largest “homemade” cannabis production.

Behind newly renovated concrete walls near Dresden, German start-up Demecan has been growing “made in Germany” marijuana for a year… in full compliance with the law.

It is part of a closed club of companies with a license to produce and sell this “green gold” in Germany, allowed for medical purposes since 2017.

The sector, still in its infancy, is looking forward to the legalization of recreational cannabis promised by Olaf Scholz’s government by 2024 despite controversy.

“multiply by ten”

Upon entering the building, a strong smell hits the nose, as hundreds of marijuana sprouts bloom in several rooms under blinding yellow light.

“We would have the opportunity to develop a recreational cannabis plant,” Demecan CEO Philippe Goebel tells AFP.

The German Social Democrat-led coalition recently unveiled a roadmap to legalize recreational cannabis use.

If the law is passed and approved by the European Commission, any adult will be able to buy and store up to “20-30 grams” intended for consumption, thanks to a controlled network of stores and manufacturers in Germany.

In a huge complex of 120,000 square meters, the company produces a ton of cannabis per year. But the plant is not being used to its full capacity.

Demecan can “multiply tenfold” its production in the short term to meet future demand, Mr Goebel said.

Harvesting is carried out every two weeks. Employees are responsible for separating cannabis flowers from long stems before they are compacted and then dried.

“I really like this job because it is different,” said Sven Sköris, 34, marijuana stalk in hand, who is also studying gardening.

Hiring is no problem here for hundreds of job openings in a region marked by aging and labor shortages. “This is a trendy product with a lot of interest,” says Goebel.

“This is a new sector, I am interested in it,” confirms 25-year-old Jana Kleinschmidt, cutting cannabis flowers with scissors.

Demecan delivers small boxes of dried cannabis balls to pharmacies for patients to smoke to relieve pain.

The company also has a license to import 20 tons of cannabis from Canada to the German market.

“We supply 55% of the German market,” says Mr. Goebel, who therefore believes that if legalized, he is in the “pole position”.

Snoop Dogg

According to a study by the Heinrich Heine University Düsseldorf, the annual turnover of recreational cannabis in Germany could reach 4 billion euros per year.

Thus, in recent months there has been an increase in fundraising to prepare for this launch.

Berlin-based startup Cantourage, a maker of cannabis-based drugs, listed 15% of its capital on the Frankfurt Stock Exchange in mid-November.

Cansativa, the only German platform for the online sale of therapeutic cannabis, raised $15 million (€14.2 million) in February… specifically from American rapper Snoop Dogg.

And the Berlin-based Sanity Group, one of the European leaders in CBD, raised $37.6 million (€35.7 million) at the end of September.

And legalization will be profitable for the state.

Researchers at the University of Düsseldorf estimate public finance gains from cannabis legalization at around $4.7 billion.

But the project retains many opponents in Germany.

At the end of October, Klaus Reinhardt, president of the well-known German physicians’ association, denounced the “cynical” project.

“It is shocking to legalize a substance that we know that it (…) can cause addiction and mental disorders,” he lamented.

The conservative opposition is also upwind.

The Minister of Health of Bavaria, Klaus Holetschek, called the government’s initiative “a dangerous signal for the whole of Europe.”

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