Bloomwell CEO Niklas Kouparanis On The Cannabis Opportunity In Germany
February 1, 2022Niklas Kouparanis has been building cannabis companies for almost five years in Germany and is CEO of Bloomwell Group. Bloomwell, founded in June 2020, is a holding company that is targeting every stage of the cannabis supply chain except cultivation. Within Bloomwell, Algea Care is a leading telemedicine provider for medical cannabis in Europe. The company recently raised significant funding that came in part from Curaleaf chairman Boris Jordan, who joined Bloomwell’s board. SNDC associate editor Danny Sullivan recently spoke with Kouparanis about cannabis in Germany, the market potential, and the timeline to recreational legalization.
SNDC: What’s the current state of cannabis in Germany?
Kouparanis: On March 10, 2017, medical cannabis was legalized in Germany. After that took place, the patient numbers rapidly increased and we had way more demand than supply because regulatory frameworks are very high in Germany to get medical cannabis into the domestic market. Five years later, we have close to 200,000 patients on the market. Last year I think we imported roughly around 17 to 18 tons of pharmaceutical cannabis to Germany, and the total market value in revenue is around €300 million ($338m) annually.
SNDC: How does Germany stack up to other cannabis markets?
Kouparanis: Compared to the recreational market in Canada or a recreational market in the U.S., the medical market in Germany is still a niche market. But with recreational legalization coming, the picture looks different. Germany has 82 million inhabitants whereas Canada has around 37 million. So Germany is twice that size. Even for the medical market, it’s interesting because I think Germany within the next four to six years will become the biggest medical market in the world and will be bigger than Canada. But if we open up for recreational use in Germany, it will be immediately the biggest cannabis market in the world.
SNDC: What’s the timeline for recreational legalization in Germany?
Kouparanis: I have a very clear timeline for legalization in my head. Even though we have it written in the coalition agreement for the new government that took power in December, legalization should not come overnight–it’s a huge regulatory hurdle to overcome and it needs to be planned properly. What will be important in Germany in Q1 and Q2 of 2022, of course, will be the pandemic, and that will be the focus. After that, we need to keep in mind that Germany also is part of the UN and needs to stick to international law, which includes the Single Convention on Narcotic Drugs, written in 1961, which basically states that you cannot legalize cannabis for adult use. That’s the over the top level issue that we have in Germany, and in general, for UN states to legalize cannabis. There are two ways to get around that UN single convention. The first way is the “We don’t care about the UN single convention” way, which Canada did and Uruguay did. So, basically they just legalized it and that’s it. That’s the first way. And the second way is how Bolivia did it for example with coca leaves–what Bolivia did is they stepped out of the UN single convention, and then they rejoined after they legalized coca leaves. I think that Germany definitely will stick to international law and will take the same route like Bolivia did. So what Germany would need to do is draft a law, and we have a very good law ready, then it needs to be passed through our parliament. If that happens, we can step out of the single convention and rejoin in January 2023. I believe drafting a law, getting it through parliament, and actually implementing it within six months during a pandemic is something that is not quite possible. Even though I’m an optimist, I don’t think that will happen. So what basically happens then is everything will be delayed one year. So my guess is Q1 2024 for the legalization of cannabis in Germany.
SNDC: What specific provisions are you hoping to see in a legalization bill?
Kouparanis: I think the first one is not leaving it up to the states in Germany to regulate the number of dispensaries they are allowing. I think we would make the same mistake as the U.S. still is making, and we would have some conservative states in Germany, which will not have enough dispensaries. The main goal of legalizing cannabis is draining the black market and generating taxes, but that will not happen if we have different states with different rules and too much bureaucracy. For example, Bavaria will only allow two dispensaries for 20 million inhabitants, and then you still have a black market. I also think e-commerce is very important. We cannot only have static dispensaries because we will shift the black market from the cities to the countryside, where there won’t be access to infrastructure.
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