Moore's Law suggests that computing power doubles in capacity every 2 years. Europe could be considered a Legal Version of Moore's Law. The continent has seen the number of member countries legalising medicinal marijuana double in each of the past 4 years (2 every 2 years).
This is (essentially) the biggest Cannabis market on the planet. With a population of around 742 million, Europe (and its 40 sovereign counties) is double the size of the combined US and Canadian Markets).
Europe will gradually open up over the next three years to become the largest legal cannabis market in the world.
– Prohibition Partners.
There is momentum happening as more and more countries open up to the idea of legalising for medicinal use and from there recreational use. Don't bank on this happening in the next couple of years, however, should the US legalise at the Federal Level, then one might see a more aggressive movement towards legalisation.
With a total healthcare spend of €2.3 trillion, this is a very lucrative healthcare market. The largest medicinal cannabis market is one that is a key target for both Big Pharma and Big business. But it's not an easy process.
First off, all cannabis produced must meet the stringent European GMP certification standards. This represents the highest levels of standards and traceability. But with a medicinal market estimated to be worth €55 billion by 2028, it's a market worth investing in.
One area that Europe is quite progressive in, is the national health insurance's coverage of medicinal marijuana medicines and prescriptions. Currently, Germany, Israel, Italy, and Denmark all offer full medical aid coverage for patient's cannabis-based medicines.
This is in stark contrast to both the US and Canada, where the national health schemes do not cover the costs. This has led to some of the major Licensed Producers subsidising the tax components of the medicines to assist their patient base.
As for recreational, it is estimated to be worth €60 billion by 2028, with Germany, Malta, Greece, and Italy all currently investigating and discussing the potential for full legalisation.
The knock on effects of this would result in increased employment, substantial tax revenue to the national and state governments, a reduction in chimer and the costs associated with the "war on drugs" and allow for greater research opportunities which could significantly impact the medicinal opportunities.
Once full legalisation takes place, this could represent a market worth north of €115 billion by 2028. To put that in perspective, the entire US market is only estimated to be worth $75 billion by 2030 (according to a Cowan Research Report)
But, it would seem this could be a long way off, given the conservative and considered nature of the continent to change.
Germany is (currently) the largest market for medical marijuana in the world (the US would be the biggest if it were to be legalised at the federal level). With a population of more than 80 million, Germany is expected to become a huge market for medical cannabis.
Germany legalised cannabis for medicinal use in 2017. One of the most progressive bills, the list of qualifying conditions is quite broad and this led to an immediate escalation in the number of registered patients.
In January 2017, there were just over 1,000 patients, and this number had swelled to over 13,000 by the end of 2017. It is estimated that by the end of 2018, there will be 30,000 registered medicinal marijuana patients.
Germany is also the first county in the world to cover the cost of medical cannabis – for any therapeutic application approved by a physician – through its national health insurance system.
Although medicinal marijuana is legal at the federal level, commercial and homegrown cultivation and production is still illegal. The tendering process for commercial production licenses suffered a blow in March of this year when the courts decided the tender period was rushed and there were far too many complaints to progress. Delays continue to halt the creation of a local cultivation industry.
The aim was for global Licensed Producers to team up with local German business to create the industry, but given the delays, Germany currently imports all of its medicinal cannabis. These imports come primarily from Canada and the Netherlands.
This is great news for the Licensed Producers (the growers) in Canada that currently meet German demand through imports.
Spain has decriminalised both medicinal and recreational cannabis for personal and private usage, provided there is almost no THC in the products. This has led to a huge network of "social clubs", non-profit, private collective, black market venues, where people can get both medicinal and recreational cannabis.
It is estimated that there are over 800 of these clubs in Spain, with most being in Barcelona. This has led to a booming micro-production, black market industry, that supplies these venues.
To complicate matters further, various regions treat cannabis differently. Some regions have decriminalised it, whilst other regions continue to criminalise it. Spain does not officially endorse any medicinal marijuana companies and hence the market operates predominantly in a "grey area".
"Spain will introduce new medical marijuana laws in the short-term"
– Kenzi Riboulet Zemouli, Head of the FAAAT Think Tank
There is strong public opinion in favour of legalisation, and we will continue to follow these developments closely.
The doyen of the European industry, the Netherlands has led the way in both medicinal and recreational markets. The most famous city is Amsterdam, where every year hundreds of thousands of tourists flock to the city to enjoy the "coffee shop culture"
Coffee shops have been in operation since 1978, but the legislation that governs them is non-sensical. While the shops are allowed to sell cannabis for recreational use, they are not allowed to grow, cultivate or produce their own cannabis.
Instead, they have to rely on the black market supplying them with their cannabis, which has led to the rise of large criminal enterprises that dominate this market. The government has recognised this and subsequently issued just one production license to Bedrocann (bought by Canopy Growth in 2017).
Bedrocann has the monopoly on production for the medicinal marketing the Netherlands, and it also exports product to the Italian, German and Finnish markets.
The Netherlands was the first country in the world to legalise cannabis for medicinal use in 2003. Doctors are allowed to prescribe medicinal cannabis, but only after all other avenues have been exhausted.
However, cannabis is not covered by the health insurance companies and can be extremely expensive for the patients. This has led to many patients securing their supply from the Coffee Shops.
Years of experience should put the Netherlands in a prime position to capitalise on the medicinal and recreational markets across Europe. They have pioneered Green House technology and have over 40 years of IP in the form of extensive seed banks and genetically developed strains.
The recreational market is estimated to be worth €1 billion by 2028, with current laws allowing for the possession of under 5 grams, and less than 5 homegrown plants allowed under a system of "decriminalisation". As mentioned above, the black market still thrives as the production of medicinal and recreational products for the coffee shops is still not allowed.
Israel has been at the forefront of medicinal marijuana R&D for the past couple of decades. Their medicinal program was started in 1990 and currently has just over 30,000 registered patients (the highest % of the population of any country).
It is estimated that 27% of the population (aged 18-65) are using marijuana, with the black market estimated to be worth €6 billion.
With a climate that is perfect for growing (lots of sunshine and access to water), no restriction on the amount that can be produced, and one of the most valuable genetic seed banks in the world, Israel is well positioned to be one of the global leaders in the export of medicinal marijuana.
From April 2018, Israeli pharmacies started selling medicinal marijuana and there are currently over 80 doctors that are prescribing it to their patients. Medicinal cannabis is covered under the national health scheme and allows for up to 60 grams per patient per month. However, this is only for 11 qualifying conditions and must be the "last line of therapy".
The unlimited production means that unlike other Licensed Producers who can only grow enough to support their supply contracts/patient base, Israeli producers will be able to grow in large quantities all designed to be exported to other European countries.
With a huge investment in R&D, 8 current production licenses (which could grow to over 40 licenses), Israel is very well positioned to be one of the global leaders in the areas of research, innovation, and technology.
Italy is at the forefront of progressive cannabis legislation. Medical Cannabis was legalised in 2013, however, nearly all of the cannabis is imported from the Netherlands, and is very expensive.
The only producer in Italy is the military who have the exclusive license to produce. In 2018, the government opened up production via license tenders and issued the first of 7 potential licenses.
Doctors can prescribe medicinal marijuana but patients must also gain ministerial approval for any product that contains high levels of THC.
Recreational marijuana in Italy is known as "Cannabis Light". This is a high CBD, low THC version (very similar to Hemp). It is intended to treat anxiety and is currently experiencing massive growth throughout the country.
Full recreational legalisation is still thought to be well off, with the black market estimated to be worth €7 billion.
France is a massive market, with an estimated 5 million users and a black market estimated to be worth €8.3 billion. However, France is a paradox. On the one hand, they have the highest per capita usage of cannabis of any European country, and on the other side, they have some of the most conservative laws and opinions on both medicinal and recreational marijuana.
The French government has one of the harshest stances on medicinal marijuana. Legalised for medicinal use in 2013, not one patient has been able to get a cannabis-based drug.
As an example, Sativex (a cannabis-based drug to treat epilepsy produced by GW Pharmaceuticals) was approved, to be able to be prescribed, in 2014. However, as a result of a pricing dispute, not one patient has yet acquired Sativex.
Recently France decriminalised marijuana and now imposes fines (between €150 – €200) instead of jail time. Full recreational legalisation looks to be far off for the moment.
With ~3.6 million active cannabis users and a black market estimated to be worth $6 billion, this is a very big market. Until recently, the UK was against the legalisation of cannabis for medicinal purposes. However, two high profile cases of childhood epilepsy changed the game.
Billy was having up to 50 seizures a day. After exhausting all forms of pharmaceutical drugs, Billy's mother turned to medicinal marijuana (pure CBD oil with high levels of CBD, while limiting the amount of THC to under 0.5% – meaning that Billy was not incurring psychoactive side effects).
The drugs worked instantaneously and Billy was able to live seizure-free whilst on the cannabis oils. The health department (who had issued a special permit for the use of the drugs) decided not to renew the permit.
Billy immediately began to start having daily seizures. Out of desperation, Billy' mother took him to Canada and acquired the medicinal marijuana oils. On their return to the UK, they had the drugs confiscated at Heathrow. Billy had a seizure in the airport and the media took hold of the story.
The public outcry was phenomenal, triggering the current Home Secretary – Sajid Javid – to escalate the matter. Within 2 months (the fastest timeframe ever), the UK moved from its anti-stance to legalising cannabis for medicinal purposes from November 1, 2018.
"It became about medicine for a child and not about cannabis."
– Charlotte Caldwell
It is estimated that the potential number of medicinal cannabis patients in the UK could be as high as 2.9 million, which clearly underlines just how big this market could be. The drugs will not be covered under Health insurance which makes it exorbitantly expensive for the patients to self-fund.
The irony is that GW Pharmaceuticals, whose drug – Epidiolex – was recently the first ever cannabis-based drug to be approved by the FDA, operates on an 18 hector property in Norfolk and is one of the largest exporters of medicinal marijuana drugs to the European market.
On the recreational side, however, don't expect any sort of legalisation just yet. Cannabis is still a Schedule 1 drug, making it (as it is in the US) completely illegal with severe jail time for trafficking.
Substantial law reform is not expected in the coming years, but post medicinal legalisation, is now considered to be inevitable.
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