Cannabis Start-up: Cologne’s Legal Drug Start-up

Since March 2017, it is legal to sell medical cannabis in Germany. The Cologne-based start-up Cannamedical was one of the first to take advantage of this and has converted the opportunity in millions of euros.

While drug use in Germany is a much debated issue, the new legislation allowing for the medical use of cannabis-based medication has been well received. Still, according to a recent Forsa survey, two-thirds of Germans oppose the legal use of cannabis and the acquisition and possession of the intoxicant is forbidden in Germany. The change of law in March means that only physicians may prescribe cannabis as a drug in individual cases. Dried flowers (or buds) and cannabis extracts help with pain and loss of appetite after cancer therapy.

The Cologne-based start-up, Cannamedical, was one of the first companies to launch in February, just a month before the new law came into force. The founder, David Henn, has stated publicly that he will sell approximately 290 kilograms of medical cannabis in 2017. If the company achieves this level of sales it will earn about 2.2 million euros. For 2018, the company will aim at sales of at least 20 million euros.

One problem, however, is the risk of delivery bottlenecks due to high demand. Henn previously ran a start-up that stored cannabis for individual US and Canadian states so has some experience with the market and supply.

Cannamedical imports the plant parts from the Netherlands and then sells the medicinal intoxicant to pharmacies in Germany. The pharmaceutical start-up has a license for pharmaceutical wholesaling and one for dealing in narcotics.

According to the Federal Association of German Pharmacist Associations, more than 10,000 units of cannabis flowers have been sold and paid for via health insurance in the first four months after legalization. This trend is set to grow. Demand was so high in July that medical cannabis was completely unavailable nationwide.

While this seems like a dream market, the Cannamedical founder has reservations:

“This is an industry where it is not yet clear where the journey will go.”

Photo credit: http://www.colourbox.com. Material used in the preparation of this article has been drawn from Gruender Szene.

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