Tom Frank | NBC Finance Channel
German cannabis company shares Synbiotics Soon after the incoming government promised to legalize the drug, stock prices rose sharply on Thursday.
The Munich-based company’s share price on the Frankfurt Stock Exchange rose 33% to 29 euros (33 U.S. dollars). The company now has a market value of more than 100 million euros.
Reach an agreement On Wednesday, the center-left Social Democratic Party, the Green Party and the Liberal Democratic Party will jointly govern for the first time in a tripartite alliance. The so-called “traffic light” alliance agreed to a plan to legalize the sale of recreational marijuana to adults in licensed stores.
Under Lars Muller’s leadership, SynBiotic hopes to use cannabis compounds to treat chronic pain, stress, and sleep problems. Cannabis has many negative effects, depending on its intensity, frequency of use, and the individual.
Technology investor Christian Angermayer told CNBC via email on Thursday that he owns 45% of SynBiotic.
“The biggest profiteer [of German cannabis legalization] It’s SynBiotic, my cannabis platform company. It is the only cannabis company listed in Germany-and one of the largest cannabis companies,” Angermayer said.
Angermayer invested in a company called ATAI, which is trying to develop drugs that can be used to treat mental health conditions. ATAI’s share price soared 40% when it debuted on Wall Street in June, but has since halved in value.
Alexander Galitsa, an analyst at investment bank Hauck and Aufhauser, wrote in a report to clients on Thursday that the German cannabis market is expected to achieve “explosive growth” in the next few years.
Galitsa pointed out that research shows that the legalization of marijuana can generate between 3.4 billion and 4.7 billion euros in taxes each year, while an estimated 27,000 new jobs will be created.
“Obviously, this is good news for SynBiotic. They have established a strong position in the European cannabis market, especially in Germany,” he said.
“Due to its first-mover advantage in Germany and extensive coverage of the value chain, SynBiotic is in an ideal position to benefit from regulatory changes and establish itself as a European market leader,” Galitsa added.
Galissa said that the recreational use of marijuana in Canada was legalized at the end of 2018, and the annual income has exceeded 2 billion euros, and then added that Canada’s population has been significantly reduced.