Cannabis Stocks Gear Up For Germany's New Market: Check Out Who's Set To Win Big

Following Germany's vote this past Friday to legalize limited cannabis possession, cannabis stocks got a significant boost before leveling out. Germany is, after all, the largest country in Europe.

Curaleaf Holdings CURLF, the largest U.S. cannabis company by market cap, rose following the news, as did Trulieve Cannabis Corp. TCNNF, Green Thumb Industries GTBIF and Cresco Labs CRLBF.

Tilray TLRY and Aurora Cannabis (NASDAQ: ACB), Canadian companies that supply Germany's medical marijuana market showed mixed results…but that will soon change.

Why?

In an email to Benzinga, analyst Pablo Zuanic noted that despite online clinics and pharmacies making access easier, there are still very few medical marijuana patients in Germany — though with the new regulations, there’s enormous growth potential. He referred to Canadian exporters Tilray and Aurora as among the best positioned to benefit as they are already major players in Germany.

Take Florida As An Example

Zuanic pointed to Florida, where now more than 3.5% of the population uses medical cannabis. "If even 1% of Germans do the same, the German market could explode to €1.7 billion ($1.84 billion) by 2025! That’s 10 times the current size," he said.

"Tilray claims leadership in the reimbursed German MMJ market, and Aurora is on record saying they lead in the cash market," said Zuanic, senior analyst at Zuanic & Associates.

He added that smaller Canadian producers exporting to Germany will also see a boost as will several others that ship to Germany on a smaller scale.  

"Among U.S. MSOs [multi-state operators], a Curaleaf affiliate, Curaleaf International Holdings Limited (68.5% owned by CURLF; the owners of the other 31.5% have not been disclosed) owns a German importer, Four20 Pharma, sourcing from Canadian producers and other countries," he said.

Meanwhile, High Tide Inc. HITI joined the chorus of publicly traded cannabis companies welcoming Germany to the legalization fold.

“We are very excited about the potential to bring our first-of-its-kind innovative discount club model to Germany, which is the world’s third-largest economy and a country with a population of over 83 million,” said High Tide's founder and CEO Raj Grover.

Cannabis Earnings To Watch As Germany Moves Forward With Marijuana Legalization

As 4th Quarter cannabis earnings releases are about to get underway this week, let’s have a look at what Viridian Capital has to say about what is expected for the 12 largest multi-state operators (MSOs).

The blue bar shows the expected percent increase in EBITDA from Q4:22 to Q4:23. The orange bar measures expected sequential quarter percentage growth in EBITDA from Q3:23 to Q4:23, and the green bar shows the expected percent increase in EBITDA from 2023 to 2024. Companies with the lowest Y/O/Y growth are on the left.

Photo Geralt and Kindel Media by Pixabay28