Canopy Growth Surges And Falls On Germany Cannabis Legalization
The German government has granted final approval for the legalization of cannabis, set to take effect on April 1, 2024. This will officially recognize cannabis as a non-narcotic substance, allowing adult consumers to partake in its consumption without fear of legal repercussions.
The announcement has been met with widespread celebration, particularly within the cannabis industry. Canopy Growth Corporation (TSX: WEED), among those hailing the decision, calling “it a very important and long-overdue step”
For the firm, the legalization presents a unique opportunity to expand its foothold in the German market. The company’s German-based subsidiary, Storz & Bickel, known for its vaporizers, is poised to capitalize on the growing demand for cannabis-related products.
Jürgen Bickel, Managing Director of Storz & Bickel GmbH, expressed pride in the legislation, emphasizing its importance in ending the criminalization of cannabis and providing consumers with a safe and legal environment for consumption.
“With more than 20 years working in the cannabis industry, constantly advocating for legalization in Germany, I’m proud that consumers will now have a safe and legal environment for cannabis consumption and that Storz & Bickel will be there to provide the highest quality vaporization devices from a proud German brand,” said Bickel.
The company witnessed a trading volume of approximately 24 million shares on Friday, experiencing a substantial surge in its share price. However, on Monday, the trading volume decreased to 13.8 million shares, accompanied by a significant decline in share price.
Nevertheless, the firm’s shares have risen more than 50% in the last five trading days as of this writing.
In addition to recreational use, the legalization is expected to bolster the medical cannabis market in Germany, offering new opportunities for Canopy Growth’s medical division, Canopy Medical.
“The re-classification of cannabis as a non-narcotic is a game-changer for patients and physicians who will be empowered to better explore cannabis as a viable treatment option for an expanded range of condition,” said Tara Rozalowsky, Chief Growth Officer.
The recently passed German law essentially allows legal possession and home cultivation of marijuana. Additionally, the law permits social clubs to distribute cannabis to their members.
Yet, uncertainties linger regarding how cannabis companies, predominantly based in Canada, will navigate these regulatory shifts. The provision allowing individuals to grow marijuana for personal use poses a potential limitation on the anticipated gains sought by pot stocks.
Aside from Canopy Growth, Aurora yesterday also saw a 7% drop, and Tilray dipped 2% following an initial surge. Other pot stocks experienced more modest losses, down less than 2%.
This comes on the heels of the report released by an independent expert panel overseeing the review of the Cannabis Act, highlighting recommendations for refining the law and its accompanying regulations and policies in Canada.
Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
