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The world’s largest cannabis grower and distributor is exploring a secondary listing in Europe, including in Frankfurt and London, to capitalise on growing investor interest after the drug became legal to use in Germany on Monday.
Germany now has some of Europe’s most tolerant laws on recreational use of the drug, with adults permitted to carry 25 grammes. Commercial cultivation is still illegal but medical prescriptions and production have been liberalised.
“We’re very much interested in a European listing”, said Juan Martinez, the head of Curaleaf International, who added that current restrictions meant “the only listing in Europe that is possible is a very limited listing in the second board of Frankfurt”.
But the company added: “We are actively exploring avenues to bolster shareholder value, which includes discussions with various exchanges, including those in Germany and London.”
Curaleaf is listed on the Toronto Stock Exchange in Canada, which legalised consumption and limited production of cannabis in 2018. Cannabis is banned at federal level in the US, although it is legal for recreational use in 24 states.
Many cannabis companies have struggled to raise funding owing to rules, including from the UK’s Financial Conduct Authority, that prevent investment into groups that make money selling recreational drugs.
Curaleaf is the world’s largest cannabis company, with a market capitalisation of C$4.6bn, and its shares have risen 40 per cent in the past year. It grows cannabis in the US, Portugal and elsewhere and has recently made acquisitions in Canada and Poland, to capitalise on the wave of cannabis legalisation and the growing numbers of people who use it for medical or recreational reasons.
Although Curaleaf said last year that it was planning to sell cannabis as a recreational product in Germany once that became legal, Martinez said the company’s priority would be the country’s medical cannabis market.
“Curaleaf has the benefit of having a playbook because we’ve done this before in the US,” said Martinez. “We understand how markets develop from a very limited medical program eventually to a wider medical program and then eventually to a recreational cannabis program.”
The company predicted that the market for medical cannabis would grow rapidly in Germany and elsewhere in Europe where the drug was cleared for medical usage. He noted that almost 4 per cent of the population in Florida used medical cannabis, far higher than the level in Germany.
“There is still a lot of work to complete in order to increase patient access and make cannabis a first line treatment under the current medical program in Germany.”
Martinez emphasised that telemedicine and e-prescriptions for ailments such as chronic pain were big opportunities for Curaleaf’s products, hailing the possibilities where “you can go in a telemedicine platform and in 15 minutes you have your prescription”.
He said its products complied with the EU’s “extremely strict” production standards and that its factories were comparable “to the Pfizers of the world”.
Another cannabis company, Frankfurt-based Bloomwell Group, said its telemedicine platform’s servers temporarily crashed this week after 50,000 people visited its site and 10,000 registered for discounted medical cannabis treatment.
Fuelled by the wave of legalisation of recreational use in the US, the global cannabis market has expanded rapidly from $21bn in 2019 to $47.1bn last year, according to Euromonitor International.
But Linda Lichtmess, a consultant at the market research company, said there was still “confusion around . . . what is allowed and what isn’t” under the German law. It only allows people to consume what has been produced domestically, prohibiting imports from countries like the Netherlands, which decriminalised cannabis in 1976.
“There has been disappointment among the industry which had been preparing for production abroad,” she said, adding that competition for medical use was expected to grow as there was limited business opportunity in the recreational market.
The Frankfurt and London stock exchanges declined to comment on individual potential listings.
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