“Germany will be the flagship market for cannabis in the world,” Niklas Kouparanis boldly predicted in an interview last week. “I think the new language of cannabis will be German.”
Kouparanis was speaking in English at the time, but as the cofounder and CEO of Frankfurt-based cannabis holding company, Bloomwell Group, this executive – a citizen of both the U.S. and Germany — may soon have less need of his American mother’s native tongue.
That’s owing to the energy and media coverage growing around expectations of the huge new legal market Germany will create. This transition will take effect in early 2024, Kouparanis says, owing to the legislative schedule of the Bundestag and Bundesrat (Germany’s two houses of parliament). Yet it’s almost a certainty since Angela Merkel’s anti-marijuana government departed after last November’s election.
The new coalition taking charge may be largely conservative but it’s pro-cannabis and is joined by the Green Party, which has already drafted a cannabis legalization law that’s generally been accepted by lawmakers, Kouparanis said.
One big motivation is the tax revenues that legalization could bring. German economist Justus Haucap has projected that the country could see a demand for 400 tons of cannabis annually and realize more than €4.7 billion euros from cannabis, along with tax revenues and savings on criminal procedures. Haucap has also predicted that 27,000 jobs could be created.
For all these reasons, Bloomwell Group is gearing up. Kouparanis founded the company in 2020 but was previously active in the cannabis space after Germany legalized medicinal cannabis in 2016. Today, Bloomwell presides over Algea Care, a telemedicine platform that pairs patients with doctors who prescribe medicinal cannabis. “Basically we are fixing the need of the patient on one site in Germany,” Kouparanis said. “We still have only a few doctor who are focused on medical cannabis therapy who know how to treat patients… only 2 percent have ever prescribed cannabis.”
Kouparanis says there are 100,000 cannabis patients in Germany at present with the potential for many more.
Bloomwell’s other entity besides Algea Care is Ilios Santé, which supplies medicinal products, both CBD and THC, to the regulated pharmacies in Germany certified to sell them.
The last part of what Kouparanis calls the holding company’s “vertical integration” will be the creation of a delivery company, to be announced in two to three months. He says he’s not interested in cultivation – “We want to be the company who brews the beer” – but clearly his interest in a delivery service reflects a confidence that legalization will occur.
Others share that view. Bloomwell last year had close to €5 billion, Kouparanis says. And in October the holding company closed a $10 million (USD) seed round in what Kouparanis called the biggest seed round in Europe to date. “For investors, this space is now opening up,” the CEO declared. “They see the huge opportunity which lies in the German market. We have a lot of consumers; we have a huge market; we have 80 million inhabitants, and with Boris Johnson aboard that’s perfect for us.”
Recruiting Boris Jordan, chairman of the U.S. wellness company Curaleaf, as a major investor and member of his board has been a coup for Kouparanis. Jordan as of December 2021 listings is worth $1.6 billion, according to Forbes and has been called the only billionaire in the cannabis space.
Kouparanis expects help from Jordan in realizing his vision. “He saw the transition from a medical cannabis market to a recreational market and he can give us a lot of insights and a lot of support,” the CEO said, referring to what lies ahead for Bloomwell Group. That future, he said, includes the challenge of dealing with international law – an important factor in Germany – especially the United Nations Single Convention of 1961 which covers narcotics and prohibits member nations from legalizing cannabis for adult use and distribution. However, Germany may legally “step out” of the Convention temporarily to do that, Kouparanis
“We need quality assurance for our customers,” he explained of the requirements for passage of legalization in his country. “We want to drain the black market, and that can only happen if we legalize in the right way and we have distribution channels up and running.”
To the new governmental coalition, the right way means selling cannabis products only through certified outlets, taxing it appropriately, selling only to adults and using tax revenues for drug education.
Pricing also has to be done right, Kouparanis emphasized, noting his personal view that pricing has been a problem in Canada. The other “must” he described is a federal approach rather than state-by-state legislation, which has been the chaotic scenario in the United States up to now. “I’m very keen about [that federal approach] when it comes to talking to politicians in Germany,” Kouparanis said. “I always use the example of the U.S. and tell them, ‘Listen, guys, we should not make the same mistakes.’”