The cannabis industry takes over Europe

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05/03/2019 | 05:30 pm
We already discussed in this section how the emerging cannabis industry is organizing itself across the Atlantic, creating its own rapidly expanding codes and standards. The leaders are Canada and America, a supremacy that owes nothing to chance since Canada and some American states have accommodating regulations governing the production and consumption of cannabis for therapeutic and recreational use. This new ecosystem is conquering Europe without much ado, a market which it is rumored to be worth several tens of billions of euros according to various forecasters.
Beyond the studies of specialized firms, industry champions do plan to colonize the old continent, at least that is what can be concluded by studying the actions of the main stakeholders. Indeed, there are many expansion operations carried out on European territory. Below is a non-exhaustive list of these operations:
  • April 2019: US giant Tilray inaugurates a production unit in Cantanhede (Portugal) including outdoor and greenhouse crops as well as research laboratories, processing, packaging and distribution sites.
  • April 2019: Canopy Growth, the industry's star, acquires the Spanish producer Canamo y Fibras Naturales (Cafina) under license. This is one of the many operations of the Canadian producer, which already has a footprint in Germany, Denmark, the United Kingdom and Poland.
  • April 2019: Aurora Cannabis is licensed to grow cannabis for medical purposes in Germany. This approval allows the Canadian producer to start construction of a new production unit in Leuna, Germany.
  • March 2019: Supreme Cannabis is taking steps to obtain a cannabis production license in Malta.
  • February 2019: Aphria produces its first cannabis strains in Denmark as part of its partnership with the Danish certified company Schroll Medical, a strategic agreement signed in September 2018.
  • November 2018: The Canadian ICC International Cannabis is expanding its activities in Portugal through the acquisition of the producer Enigma Unipessoal, based in Castelo Branco. A month earlier, Polannabis Holdings of Poland was flying the Canadian flag.
  • October 2018: The Green Organic Dutchman (TGOD) completes the acquisition of the Polish producer HemPoland under license. In addition, this production unit has recently obtained organic production certification from the Polish authorities.

Industry leaders intend to take advantage of a potential opening of the medical cannabis market in Europe. In this sense, all opportunities are good to seize, the aim being to avoid repeating the mistakes made in their own market. More concretely, the key to success is to control your own supply chain as soon as possible so as not to miss a hypothetically large demand.

Until the European potential awakens, initiatives are emerging, but remain isolated. While more and more countries and governments are considering or taking action to implement more favorable policies in the field of medical cannabis, these procedures are in fact being carried out one by one with a country-specific and product/drug-specific approach. In practice, the prescription of cannabis-based drugs is legal in 21 countries, but access to these solutions remains uneven from one country to another, whether in terms of pathologies treated, social coverage or simply availability.

To illustrate this problem of a multi-speed Europe, the French case is interesting. Lagging behind its neighbors, France is only starting to experiment with therapeutic cannabis, and only in certain clinical situations, particularly in the treatment of multiple sclerosis or in certain cases of severe epilepsy.

European countries are therefore currently highly fragmented as each country sets its own standards. However, it is this diversity of national approaches that tends to fuel the political debate within the European Union. At this stage, we cannot ignore the willingness of stakeholders to speak a common language and impose a universal European regulatory framework. It is in this context that the European Parliament adopted last February a text aimed at defining the use of medical cannabis and at removing regulatory, financial and cultural obstacles to research on the medical use of cannabis and cannabis research in general. This resolution also reinforces the conclusions of the European Monitoring Centre for Drugs and Drug Addiction, which, in its latest report on the medical use of cannabis, urges policy makers to fill Europe's gaps in this area.
Jordan Dufee
MarketScreener.com 2019
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