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SynBiotic pops as new German government pledges legalize weeds

Canopy growth

Tom Frank | CNBC

Shares in German cannabis company SynBiotic soared Thursday shortly after the next government promised to legalize the drug.

The Munich-based company’s stake was € 29 ($ 33), up 33% on the Frankfurt Stock Exchange. The company’s market capitalization is currently over 100 million euros.

On Wednesday, a center-left Social Democratic Party, the Greens, and the Liberal Democratic Party reached an agreement for the first time to rule in a tripartite coalition. The so-called “traffic light” coalition has agreed on plans to legalize the sale of cannabis to adults for recreational purposes in licensed stores.

SynBiotic, led by Lars Muller, wants to use cannabis compounds to treat symptoms such as chronic pain, stress, and sleep problems. Cannabis has many negative side effects, depending on its strength, frequency of intake, and individual.

Technology investor Christian Angermeier told CNBC on Thursday that he owns a 45% stake in SynBiotic.

“The biggest profiter [of German cannabis legalization] My cannabis platform company, SynBiotic, is the only cannabis company listed in Germany and one of the largest in general, “said Angermayer.

Angermeier has invested in a company called ATAI that is trying to develop drugs that can be used to treat mental health. ATAI’s share price surged 40% on its Wall Street debut in June, but has been halved in value since then.

Alexander Galitza, an analyst at investment bank Hauck and Aufhauser, wrote in a note to clients Thursday that the German cannabis market is ready for “explosive growth” in the coming years.

Galica pointed out a study suggesting that legalization of cannabis could generate annual tax revenues of € 3.4 billion to € 4.7 billion, while at the same time creating an estimated 27,000 new jobs.

“Obviously, this is great news for the European cannabinoid market, especially SynBiotic, which has already established a strong position in Germany,” he said.

“Thanks to the pioneer advantage in Germany and the wide coverage of the value chain, SynBiotic is in an ideal position to benefit from regulatory changes and establish itself as a market leader in Europe,” Galitsa said. He added.

According to Galica, the recreational use of cannabis in Canada was legalized in late 2018, with annual revenues already in excess of € 2 billion, adding that Canada’s population is significantly smaller.

SynBiotic pops as new German government pledges legalize weeds

Source link SynBiotic pops as new German government pledges legalize weeds

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