Europe. Europe potentially is set to become one of the biggest cannabis markets in the world with its 742,517,277 population of which at least 12% are already its’ active users and this is apart from medical, edible and industrial uses of cannabis. Legislation in Europe is moving in favor of legalization of cannabis marijuana, while hemp has enjoyed in Europe for a long time the legal cultivation and usage.
Remarkable event took place in February 2018 when Germany legalized medical and industrial use of cannabis joining two European countries which so far approved large scale cannabis cultivation – Netherlands (not for the whole country though) and Czech Republic. From now on German pharmacies like in some other countries will be granted the permission to “overtake” the street sales of illegal cannabis and turn it into controlled and secure business. Of course this process will be followed by the growth of R&D in the plant application in medical and other industries, one more niche for prospective investments.
In Netherlands, where medical usage of cannabis is permitted (so far only by prescription) the Parliament this year has passed the bill allowing 10 provinces to grow cannabis.
Generally European cannabis marijuana market is expected to grow very fast to hit by 2020 a high mark of $52,6 bln. Cannabis hemp market in Europe has always been legal and even more – it was subsidized by EU as part of the green initiative. European hemp acreage has surged by 450% from 2011 to 2016. And with other European countries launching its production this growth is expected to increase exponentially. Though for now France boasted 50% of the total hemp production in Europe.
In UK the situation is very contradictory. Though cannabis (marijuana) is still illegal, the country became the world leader in its production for medicinal and scientific needs (44,9% of the global total) and export. Recently UK became a home for the first investment company in the country dedicated to the investments in cannabis medicinal use – Sativa Investment which raised 1,1 mln pounds in IPO, the fundraising estimates 4 mln pounds. Also UK is a home for the one of the world largest medical cannabis companies GW Pharma, which listed on NASDAQ USA with a market valuation of $3,1 bln.
Italy. The Parliament of the country few years ago approved only the medical usage of cannabis marijuana, by prescription and in Florence they have one of the biggest in Europe cannabis marijuana cultivation facilities which are operated under the Military Forces supervision. Though recreational usage is illegal, still Italy counts the highest number of teenagers smoking “the weed”. In January 2017 Italian Government passed the Law on regulation of cultivation, processing and sales of cannabis and cannabis derived products with less than 0,2% of THC, the drug component of cannabis marijuana. It opens a road to the fast growth of emerging businesses in Food and Beverages industries along with the essential oils production.
Czech Republic. Medical usage of cannabis marijuana is allowed strictly by prescription and recently the cultivation of the medical grade cannabis was permitted by the Government. Edible cannabis for candies, beverages and other products also is allowed provided that it will contain no or a very small fraction of THC, which is the “drug” component of cannabis marijuana. Recreational usage is prohibited. But still the cannabis cultivation is permitted and grows due to the rising demand for the product and its derivatives.
USA. On a Federal level cannabis (including medical, industrial edible and recreational) use is prohibited, but let us see what is happening in different states of USA. In spite of recent threats from the USA Government on Law enforcement actions cannabis production and processing is growing.
30 states already have allowed cannabis medical use. Now 9 states (Alaska, California, Maine, Massachusetts, Oregon, Nevada, Vermont, Washington, Colorado) and Washington DC legalized the recreational one. New generations of marijuana entrepreneurs with various backgrounds like finance, medical, law, politics emerge in the country. Recently the former US House Speaker John Boehner and former Governor of Massachusetts Bill Weld joined the Board of Advisors of one of the biggest USA cultivation, production and dispensing operations company working so far in 11 states of USA.
Other states are lining up to join the legalization. Cannabis (marijuana) becomes a really big business in USA. In 2017 being only in the infancy state cannabis market legal sales reached $10 bln but that was before the huge California market approved the cannabis business in January 2018. By 2021 it is expected to surge at least to $21 bln. And according to the estimates 12 more states are lining up to legalize cannabis.
Israel. Since 2017 medical marijuana has been acknowledged as a legal farming culture, granting to the growers access to state grants, training and aid. Accordingly the extensive clinical research of the marijuana has taken place in Israel. In fact this kind of research is a unique in the whole world and it of course contributed in the willingness of international investors to pour more than $100 mln dollars in the Israel’s cannabis industry.
Israel cannabis companies not only grow cannabis but also produce and export inhalers, skin care and cosmetics products. According to some evaluations Israel is the biggest potential exporter of the medical cannabis in the world, but still the question of legal export is not solved on the Governmental level, due to some disputable issues. Resulting overgrowth of cannabis stock assigned for export involuntarily pushing all this stock for sales in the black market.
Latin and South America. Medical use of cannabis was legalized in many countries of the continent in 2017, though only for prescription or through subscription in some therapeutic clubs which were permitted to cultivate medical cannabis (as in Chile). Generally it is allowed to cultivate, produce and sell cannabis-based medication in Argentina, Brazil, Peru, Chile, Paraguay, Colombia, Uruguay (recreational use has also been legalized), Puerto Rico, Mexico. In the latter it is expected legalization of recreational use and cultivation of cannabis to take place this year.
Africa. Lesotho is a leader in cannabis cultivation and export to South Africa and some other African countries. Canadian companies looking for new opportunities for cannabis growing to some extent boosted the process of cannabis legalization (especially for medical usage) which is expected to happen in many countries this and next year.
Our brief survey of cannabis usage legalization in various jurisdictions suggests that macro conditions for the cannabis Mega trend development in fact have been and continue to expand globally prioritizing different cannabis applications in different countries. A growing number of the jurisdictions which strictly prohibit any cannabis usage become more and more tolerant to the idea of reconsideration of their laws and in the first place in medical and edible applications of cannabis.
Next: cannabis market overview, trends in various markets, companies, M&A.
Part 1. Please click here.