‘EUROPE IS OPEN’: CANNABIS EUROPA GOES TRANSATLANTIC TO BRIDGE THE GAP BETWEEN THE WORLD’S TWO LARGEST CANNABIS MARKETS

‘EUROPE IS OPEN’: CANNABIS EUROPA GOES TRANSATLANTIC TO BRIDGE THE GAP BETWEEN THE WORLD’S TWO LARGEST CANNABIS MARKETS

As the North American cannabis market begins to rise, so too does the cost of doing business. With consolidation buoying the markets in Canada and the US, savvy operators are looking abroad for expansion opportunities. Europe, the world’s largest potential cannabis market, is now open for business. Cannabis Europa arrives in Toronto this November 5th, and New York on November 7th, against a backdrop of international change as the European market begins to command the attention of the international industry.

Medical market growth

22 countries in Europe have now legalised medical cannabis in some shape or form, making up about half the legal cannabis markets in the world. It is still early days and approaches differ. The programmes are closely integrated into each country’s healthcare system so rollout is slow and regulations are layered, rigid and complex. 

For example, in the UK, medical cannabis has been legal since November 2018 but it can only be prescribed in restrictive circumstances by a specialist doctor. As a result, very few patients who could benefit from medical cannabis are able to access it. Even if they do, costs are so high they are forced to grow their own or buy from the black market. NICE and the NHS, the governmental bodies who could green light further cannabis prescriptions in the UK, both cite a lack of clinical evidence for this stance. They call for more clinical trials, which is not likely to break this deadlock any time soon.

Elsewhere in Europe, other countries, such as Denmark, are taking a more pragmatic approach and have granted safe access to medical cannabis patients. They are crunching the data gathered from consultations to prove efficacy and establishing pilot programmes for domestic cultivation projects. If such an approach were taken by all European countries the data gathered would be substantial – not to mention the demand.

More countries in Europe are seeing the potential of the German medical market and are granting cultivation licences to enable them to not only provide for domestic needs but to profit from an emerging European demand for medical cannabis products. Such cultivation licences have been granted in Portugal, The Netherlands, Italy and Greece, with other European countries coming online on what feels like a regular basis.

CBD entering the mainstream

At this point in time, CBD is the most lucrative segment of the cannabis industry in Europe, although the legality of products is not always clear-cut. At a European level, CBD is listed as an unauthorised novel food in the EU Novel Foods catalogue. This means that CBD extracts must undergo a safety assessment from the European Food Safety Authorities (EFSA) before they can be approved for use. However, despite 17 applications no novel foods authorisations have been granted and many companies still remain noncompliant.

Certainly some countries, such as Spain, Austria and France have clamped down on CBD products but others, such as the UK and The Netherlands, have been more hands-off. This leaves the growing industry in much of a grey regulatory area. However, estimates place the value of the UK market anywhere between £300 million and projected to grow up to £1 billion over the next five years, becoming too large to ignore.

Adult-use debate continues

Luxembourg is the only European country that has committed to legalising cannabis for adult recreational use. Earlier this year, the land-locked Benelux country announced plans to legalise recreational cannabis by 2021, while calling on neighbours to relax their laws. While Luxembourg is the 28th smallest country in the world, the move is influential and has sparked debate amongst other European countries, including The Netherlands and Germany, around recreational legislation.

Although a step in the right direction, the proposals laid out by Luxembourg are quite restrictive. Speculation mounts as to which will be the first country in Europe to follow Luxembourg’s lead and to what extent.

What’s the opportunity for North America? 

Across CBD, medical and recreational markets, Europe is moving in the right direction. While legislation and regulation remain both fragmented and complex, opportunities are developing for international operators across the bloc.

A perfect storm is brewing in the European market, but North American manufacturers, distributors and investors must act on available market insights to get ahead of the competition. Businesses must educate themselves on the most up-to-date methods of working with regulators region-by-region, start discussions now with the best logistics firms and understand how other businesses have succeeded in an increasingly competitive landscape. 

Join the key innovators, operators and investors from both sides of the Atlantic, as Cannabis Europa Toronto: The Transatlantic Forum and Cannabis Europa New York: The Leaders Summit arrives in North America this November. Limited tickets are now available, book yours now.