EUROPEAN cannabis industry ‘pioneer’ Daniel Kruse believes that Germany is poised to ‘lead the way for a new global drug policy’.
With the incoming German government intent on normalising cannabis use the country will be in a position to spearhead growth across the European hemp and cannabis market.
The veteran of 25 years standing told BusinessCann cannabis is set to become ‘one of the most exciting and successful industries in the coming years’.
This comes as fast-growing German cannabis company SynBiotic announced the acquisition of Mr Kruse’s stable of four business in a deal worth €11.2m.
Its says the acquisition of Mr Kruse’s three well-established, direct-to-consumer brands will give it a cashflow boost and it has raised forecast revenues to €15m from €5.4m.
Retail To Consulting
Mr Kruse has been a key figure in the European cannabis industry since 1995, founding a raft of successful businesses from retail to consulting.
After studying finance in the USA, he opened hemp retail store HanfHaus in 1996, before founding Europe’s first hemp food and convenience brand Hempro in 2002.
“When I started out 25 years ago there was no hemp industry,” he told BusinessCann.
“The first products that we gathered for creating our first assortment were imported from all parts of the world and were composed of twine, fabrics, some textiles, some accessories and very few food products.”
His lengthy experience working with cannabinoids in foods has made him one of the world’s leading voices in the field.
The recently-announced deal – expected to be finalised in the coming weeks – will see SyBiotic acquire 50.1% of Mr Kruse’s four businesses including Hanf Farm, Hempro International and Hemp Factory, all direct-to-consumer retail brands selling a range of hemp products,
It will also acquire half of MH Medical Hemp, which supplies bulk cannabidiol-rich hemp extracts, CBD oils and CBD isolate to food, cosmetic and pharmaceutical companies.
Since 2019, Mr Kruse has also been President of the European Industrial Hemp Association (EIHA), which recently celebrated a new Common Agricultural Policy (CAP) being adopted across Europe, seeing on-the-field, hemp-seed THC limits being increased from 0.2% to 0.3%.
Counsel To Cannabis Entrepreneurs
His extensive market knowledge and international network built through his HempConsult company, which was founded in 2012, has seen him counsel many cannabis entrepreneurs.
These include SynBiotic’s Mr Müller, who said: “This year, we focused our M&A activities mainly in Germany, next year we will roll out to Europe, including Switzerland and the UK.
“Daniel knows every big company in Europe. It’s really important to have strong partners on board to that are able to help me to evaluate new companies, new strategies, and potential acquisitions.”
Mr Kruse is also a strong advocate on behalf of cannabis industry stakeholders to the European Union and German government, and according to Mr Müller will play a key role in informing the development of the recreational market moving forward.
Germany to ‘Lead the Way’
Last month Germany’s coalition government-in-waiting, often referred to as the ‘traffic light coalition’, agreed to introduce legislation over their four-year term which would legalise the sale and distribution of cannabis for recreational use across the country.
With Germany already representing Europe’s largest market for medical cannabis, with figures from Prohibition Partners estimating that over 128,000 patients receive medical cannabis in Germany annually, Mr Kruse believes the benefits will be felt across Europe.
“(Legalisation) will provide a further boost to the European hemp industry and help to end the decades-long stigmatisation of hemp.”
Not only will this potentially provide a significant financial boost for cannabis companies operating across Europe, but Mr Kruse believes it could spark a wave of regulatory and policy change.
“With the new government Germany could lead the way and start European and international initiatives for a new global drug policy.
“Many countries will change their laws to be able to export to the German recreational market, which means that they will also legalise first.”
‘Challenges Yet To Be Mastered’
While Mr Kruse believes that it is ‘highly unlikely’ the government will renege on their plans, and that the ‘road to legalisation is agreed on and will come’, he said there is still lots of work for Germany to do.
“The challenges yet to be mastered are well known, but the resulting opportunities are unlimited.”
This road will become clearer next year when the draft is finalised by the new government.
“With the Cannabis Control Act by the Greens as a blueprint for legalisation, it will be a free market model with licensed shops only restricted by social responsibility and zoning requirements. The coalition agreed on an industry model, rather than a social club model, as the industry can be better controlled than private associations.
“We call on the German government to closely coordinate the new legal framework with its European partners and to advocate for a harmonised commercial hemp and cannabis strategy across Europe. Furthermore, legalisation must be designed to be as socially responsible and fair as possible, also with regard to youth protection, prevention and participation in road traffic,” said Mr Kruse.
Despite German cannabis companies including SynBiotic seeing their stocks spike over 80% following the announcement, Mr Kruse believes that European cannabis stocks will develop in much more ‘stable’ fashion than their North American counterparts.
“The European investment and stock market is more reserved and down-to-earth, this should lead – compared to North America – to less steep but sustained and stable increases in valuation.”