AlsterResearch Update: Synbiotic - Legalisation of cannabis

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What’s it all about?

The future governing parties in Germany want to legalise the sale of cannabis for recreational use. The politicians have agreed on this in a published coalition agreement. Accordingly, a controlled distribution of cannabis to adults in licensed shops is part of this agreement. Synbiotic as a unique and broadly diversified player with a clear focus on cannabis and cannabinoids should benefit from legalisation in many ways, even if some uncertainties remain. Nevertheless, the potential legalisation of cannabis is a hot topic and bodes well to the equity story of Synbiotic. We therefore see in this thematic issue the potential for a rerating of the stock, and which thus might close the gap towards our fair value calculation. We keep our BUY recommendation and PT unchanged at EUR 37.00.