Europe blooms to world’s largest legal cannabis market
In the next five years, Europe is set to become the world’s largest legal cannabis market. With a population of more than twice the size than the United States and Canada combined, the market is ripe, and the industry has grown more in the last year than the last six combined, according to a recent report.
More than €500 million has been invested in the cannabis industry to date, and six countries have announced new legislation regarding the growth, sale, or consumption of cannabis. France, the UK, and Spain are reviewing current legislation, while Germany, Italy, and the Netherlands – countries considered industry leaders – are focusing on expanding existing medical programmes. The market is primed and ready for harvest – one that could be worth as much as €123 billion by 2028, say researchers at Prohibition Partners in a report titled The European Cannabis Report.
Prohibition Partners was founded in 2017 with a mission to open the international cannabis industry through reliable data and intelligence. The organisation has grown to become a leading provider of market insights and consultancy. It aims to unlock the societal and commercial potential of cannabis.
Cannabis investments in the US and Canada quadrupled in 2018, catching the eyes of European policymakers. Simply stated, good bud brings good money – While Europeans do not expect a similar regulated recreational market [as those in some states in the US and throughout the entirety of Canada] in the immediate future, policymakers and businesses do anticipate substantial growth in the medical area.
A lack of clinical data regarding the usefulness of medical marijuana is an obstacle facing the industry, meaning funding for reliable and effective research is essential. «Europeans also expect levels of regulation and standardisation across medical cannabis products to be perfected,” the report states. “A forthcoming review of the evidence surrounding medical cannabis from the World Health Organization (WHO) and the European Union (EU) could lead to a recommendation on its legal status.”
The report points to the economic benefits of a regulated cannabis industry in countries including Spain, Portugal, Italy, and Poland, which were greatly impacted by the 2008 recession. Countries like Greece and Macedonia could also benefit from cultivating cannabis to support an ailing agriculture industry.
There is also an absence of credible research into the financial (in the form of tax revenues) and employment opportunities provided by cannabis legalisation. In the US, thanks to the rather widespread legalisation of medical marijuana, as well as recreational legalisation in 10 states, the cannabis industry is expected to outpace manufacturing job creation by 2020. In Canada, where a cannabis human resources networking platform recently launched, cannabis industry sales are projected to be higher than liquor and wine in 2019. This extraordinary growth opens a wealth of opportunity along the supply chain, «as well as ancillary products and platforms» such as smoking devices and online retail portals for both consumers and healthcare professionals, such as Zeacann, a New Zealand-based cannabis start-up currently seeking funding.
Breaking down the bud
Per the report, there are four categories of cannabis: medical, pharmaceutical, recreational, and CBD. Medical refers to products prescribed by a medical practitioner for the treatment of a specific condition or disease. Pharmaceutical cannabis refers to products such as Marinol, which are produced using cannabinoids and have been through clinical trials and licensed as a medicine. Recreational cannabis is any cannabis used for non-medical purposes, and typically has a higher concentration of THC – the chemical compound that provides the user with a «high».
CBD products are already available in many European markets. It is used for “wellness purposes» such as sleep and anxiety. They do not require a prescription and have been excluded from the report’s market sizing. For its analysis, Prohibition Partners focuses greatly on the potential of recreational and medicinal cannabis.
“With a market of 742 million people and total healthcare spend of €2.3 trillion, Europe will be the largest medical cannabis market in the world,” the report states. The market could be worth as much as €58 billion once proper legislation and infrastructure are in place in all markets. Insurance companies in Israel, Germany, Denmark, and Italy are now covering medical cannabis prescriptions, forecasting that in the near future “fulfilling medical cannabis prescriptions will become a basic requirement of any public healthcare policy.”
“By 2028, we estimate the European recreational cannabis market will be worth €65 billion. New products, distribution, and supply channels have further advanced cannabis consumption and presence throughout Europe over the last 10 years,” the report states.
As a continent, legislation is mostly examining medical cannabis and CDB products. As countries begin to adopt medical cannabis legislation, however, the benefits of a regulated market will become more apparent, in turn shining light on both the appeal and opportunity of a regulated recreational market. “Since the beginning of 2018, Germany, Denmark, Malta, Greece, and Italy have all discussed the possibility of a fully regulated cannabis market, while Luxembourg has promised to introduce a regulated adult use market before 2023.” Employment opportunities, crime reduction, and potential increases in tax revenue are all “key driving forces for the establishment of a legal recreational cannabis market in Europe.”
Plant the seeds
Signs of marijuana’s impending legalisation are increasingly apparent, but there are several actions that must be taken to secure a stable foundation for the industry. Some are farther along than others. After Canada’s decision to fully legalise recreational cannabis in 2018, the WHO began to review the plant’s legal status. The European Parliament Committee on the Environment, Public Health and Food Safety is working to establish a «region-wide regulatory framework on medical cannabis,» which could lead to multinational regulation in 2019. There is a need for educational programmes for medical professionals, which are not yet established. Doctors and other healthcare professionals must be knowledgeable and informed as to the benefits and uses of cannabis if it is to be properly introduced into a medical setting.
European countries also must create an intra-EU cannabis trade network. «Industry leading EU nations, Germany, Italy and the Netherlands are developing tenders for domestic cultivation licenses, seeking to build a domestic industry with a localised supply of medical cannabis». Growing cannabis within the continent will mean that there will be less dependency on product imports.
“Cannabis is slowly but surely entering new European markets,” the report states. As cannabis, medical and recreational, is introduced, regulated, and legalised, market penetration will occur all but naturally. “Health, beauty, and wellness were the first to capitalise, but food, beverages, and financial markets are creeping in. Announcements and investments from AB InBev, Constellation Brands, and BlackRock are evidence that cannabis stocks are becoming mainstream.”
In other words, it’s high time to buy in. Companies are making big moves for a chance to toke up on an emerging, almost certainly lucrative market. For now, it’s a waiting game – but by the looks of things, it’s going to be a relatively short one.
According to a study by A.T. Kearney in the US, 76% of consumers would be open to trying legal cannabis as a therapeutic product. Meanwhile, an analysis by Deloitte found that the legal marijuana market could next year grow to $4.3 billion.
The above article was first published by Consultancy.eu. Norway Today does not necessarily support the views and findings expressed therein. We, however, have contacted the Norwegian Department of Health on the matter.
Response from the Norwegian Department of Health
Is there any investigation, justification or similar for a general ban on medical marijuana (CBD)?“
The CBD isolated from the cannabis plant (cannabis extract) is regulated as drugs according to the United Nations Convention on Drugs (1961) and the Regulations on Drugs §3. According to Section 2 of the Drug Regulations, the Act on Medicinal Products and Regulations issued pursuant to this Act applies to drugs. Basically, the CBD (from cannabis extract) as included in the drug definition is also considered.
CBD (synthetic) is not regulated as a drug, as it is not covered by the drug definition in §3 of the Drug Regulations.
By a concrete assessment of whether a product is a drug, one will, among other things, take into account the dosage of the CBD. The Norwegian Medicines Agency has so far not assessed products containing the content of CBD and can, therefore, at this time, not say anything about which dosage means that a product is classified as a drug.
If the dose is so low that the product is not covered by the medical definition based on content (function), the product may be regulated as either «new foods» or [regular] food. The regulations related to «new foods» and foodstuffs are managed by the Norwegian Food Safety Authority.
If the product is considered «new foods», it cannot be traded in the EEA area unless the product is approved by the EU Commission and included in the Union list of «new foods». If the product is considered food, the criteria in the Norwegian Food Safety Authority’s regulations must be met before it can be traded.
Why are even cannabis plants with extremely small amounts of THC banned, given the many benefits of using the plant instead of fossil fuel and more?“
CBD products based on cannabis extracts often contain tetrahydrocannabinol (THC, the active ingredient in the cannabis plant) listed on the drug list. THC is regulated as a so-called prohibited drug and it is therefore not permitted to manufacture, acquire, sell, introduce, carry out, store, possess or use the substance without special permission.
Products containing THC (regardless of quantity) are currently regulated as [prohibited] drugs in Norway. As of today, products with a content of CBD isolated from cannabis will be regulated as [other] drugs, while synthetic CBD will be regulated as a [medical] drug.
(The previous question was not about that, but never mind).
Are there any ongoing investigations, concerns or the like regarding revoking the general ban on cannabis, including THC and any lawful medical use, in light of all the conditions that can be treated with it?“
There is no investigation in which the purpose is to abolish the general ban on cannabis. In terms of medical use, the authorities receive many inquiries from people who wish to use or sell products with Cannabidiol (CBD) and other products based on industrial hemp.
Several have asked the authorities to clarify what opportunities exist for using, importing, marketing and producing CBD and hemp products in Norway. There is a need to study the possibilities that exist within the current regulations for using, importing, marketing and producing (except cultivation) products with CBD and products based on industrial hemp.
The Swedish Medicines Agency has been commissioned to investigate this in the letter of award for 2019. Since the boundary between drugs and food / dietary supplements is a central issue, the work must be carried out by the Norwegian Medicines Agency in collaboration with the Norwegian Food Safety Authority.
More information on the matter is available at the Norwegian Medicines Agency website.
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