As public support for cannabis reform remains strong according to recent data and Europe advances its medical cannabis market, companies like InterCure could be positioned for long-term growth.
The landscape of medical and pharmaceutical cannabis is undergoing significant changes, driven by evolving regulations, increasing public support, and strategic market expansions. Recent developments in both Europe and the United States highlight the shifting attitudes toward cannabis, offering new opportunities for companies like InterCure Ltd. (NASDAQ: INCR), which may be well-positioned for long-term growth in this dynamic industry.
Public Support for Cannabis Reform in the United States
In a notable development, the Drug Enforcement Administration (DEA) proposed rescheduling marijuana under federal drug law, moving it from Schedule I to Schedule III. This shift would change marijuana’s classification from a drug with “no currently accepted medical use and a high potential for abuse” to one with “a moderate to low potential for physical and psychological dependence.” This reclassification would allow doctors to prescribe marijuana or its derivatives as medicine, albeit under continued regulation as a controlled substance.
While some lawmakers have been trying stop this move, the public response to this proposal has been overwhelmingly supportive. During the 60-day public comment period, the DEA received 42,916 comments, with a majority advocating for descheduling, decriminalizing, or legalizing marijuana at the federal level. According to the Drug Policy Alliance, 69.3 percent of the comments supported some form of loosening marijuana laws. Similarly, Headset, a cannabis industry data analytics company, found that 92.45 percent of comments favored reclassification, with a significant portion advocating for complete descheduling.
This broad public support reflects a growing consensus that marijuana should no longer be treated as a dangerous substance. A Pew Research poll from March 2024 found that 57 percent of respondents supported full legalization for both medical and recreational use, while another 32 percent favored medical legalization only. These numbers suggest a strong mandate for policymakers to consider more progressive cannabis policies.
New York’s Office of Cannabis Management has also submitted public testimony urging federal regulators to ease restrictions on marijuana. The push to reclassify marijuana as a Schedule III substance is seen as a crucial step in unlocking benefits, including more widespread medical marijuana treatment and financial opportunities for cannabis businesses. New York officials argue that federal restrictions have long demonized marijuana unnecessarily, and a reclassification would reflect the current understanding of its medical benefits.
European Market Growth: A Game Changer for Medical Cannabis
While the United States grapples with federal cannabis policy, Europe, particularly Germany, is making significant strides in its medical cannabis market. Germany, Europe’s largest economy, recently passed laws expanding its medical cannabis program and decriminalizing possession. Although the new adult-use landscape allows for limited personal cultivation, the real impact lies in the medical reclassification of cannabis.
Niklas Kouparanis, CEO of the Bloomwell Group, highlighted the significance of Germany’s new medical marijuana law. The reclassification means cannabis is no longer a narcotic substance, making it easier to prescribe for various conditions without the need for extensive medical records. Kouparanis expects the market to grow from 300,000 patients to as many as 6 million within the next 12 to 24 months, dramatically increasing the total addressable market in Germany.
Germany’s position as an import market for cannabis further differentiates it from North American markets plagued by high cultivation costs and illicit competition. By importing low-cost cannabis from countries like Colombia and South Africa, Germany can offer high-quality, pharmaceutical-grade cannabis at competitive prices, undercutting the illicit market. This model not only ensures affordability but also supports the regulated market’s growth.
InterCure’s Strategic Positioning for Growth
InterCure Ltd. stands out as a key player poised to benefit from these global trends. Recognized as the leading seller of pharmaceutical cannabis outside North America, InterCure is well-positioned to capitalize on the expanding European market and potential changes in US federal cannabis laws.
InterCure’s recent Overweight rating from Zuanic & Associates underscores its strong market position and significant growth potential, projecting a possible 5x return for investors. The report highlights InterCure’s advanced capabilities in producing high-quality, pharmaceutical-grade cannabis and its strategic initiatives across key regions.
In Europe, InterCure is set to benefit from the burgeoning medical cannabis market, particularly in Germany. The regulatory changes and expanding patient base in Germany present a substantial growth opportunity. InterCure’s expertise in meeting stringent regulatory standards and its established partnerships position it advantageously to capture market share in this rapidly growing market.
Looking ahead, InterCure could significantly benefit from potential changes in US federal cannabis laws. The rescheduling of cannabis to Schedule III could open new avenues for medical use, aligning with InterCure’s expertise in pharmaceutical-grade cannabis production. This potential regulatory shift, combined with increasing public support for cannabis reform, could enable InterCure to enter and succeed in the US market.
InterCure’s strategic value is further reinforced by its extensive expertise, advanced cultivation techniques, and valuable bank of strains and genetics. The company’s vertical integration and robust supply chain capabilities enable it to deliver consistent quality and maintain a competitive edge. InterCure’s international brand partnerships with renowned names like Cookies, Humboldt, Tyson, and Binske also bolster its market leadership.
Despite recent disruptions, InterCure has reported that expects to achieve strong sequential growth in 2024. The company’s production and profitability are projected to increase significantly, driven by growing domestic demand, entry into the German market, and the resumption of production at its southern facility. These strategic initiatives are set to drive substantial revenue growth and enhance shareholder value.
The evolving landscape of medical and pharmaceutical cannabis presents significant opportunities for growth. Public support for cannabis reform in the United States and regulatory advancements in Europe are paving the way for a more robust and accessible cannabis market. InterCure Ltd., with its strong market position, strategic initiatives, and advanced expertise, is well-positioned to capitalize on these developments and deliver long-term growth for its investors.
Photo by InterCure
This article is for informational purposes only and is not intended to serve as financial, investment or any form of professiona advice or recommendation. Please review the full documentations and financial disclosures it is subject to.
