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Medicines derived from cannabis are seen by many as a first priority when it comes to legalization efforts. Although Europe currently lacks a common approach to medical cannabis there are developments in this space.

The maturity of European medical cannabis programs differ – for example, the Dutch medical cannabis program began in 2003 whereas the United Kingdom legalized medical cannabis in November 2018. In The Netherlands, patients can get dried cannabis flowers from their local pharmacy but in the UK patients are still battling to get their supply of medicine.

Cannabis cultivation, processing, and distribution for medical use is happening in several European countries and exports are being made within European borders and beyond. Major Canadian and US brands are investing in cultivation, processing facilities and distribution hubs to give established European companies some much-needed competition.

In regions where recreational cannabis has been legalized alcoholic beverages have experienced reduced sales. In Colorado – the first US state to legalize cannabis for adult use – cannabis sales surpassed alcohol within three years of legalization. In Canada – which legalized recreational use in 2018 – sales of cannabis are expected to exceed the alcohol market by 2020.

A few factors could contribute to this. Legalization efforts highlighted the fact that cannabis is a safer alternative to alcohol – in terms of health impact to the individual and those around them. Another factor could be the adverse effects people experience when they combine cannabis and alcohol – once cannabis products are legal and social use is more widely accepted this will likely reduce the net alcohol consumption of a cannabis consumer.

The alcohol industry sees this trend and are seeking ways to reduce the impact on their bottom line. They are forging partnerships with cannabis brands and intend to sell their own cannabis-infused products utilizing established distribution channels. They are actively working on bringing THC infused beverages to market – an act which will cannibalize their existing sales but is seen as a necessary pain to offset products that will inevitably become available from nimble startup competitors.

The tobacco industry is ideally placed to capitalize from a legal global market for cannabis. They already provide FMCGs produced and packaged around a cultivated crop. The demand for tobacco has been decreasing for years – thanks to efforts by health authorities and health-conscious consumers.

Tobacco producing countries could cultivate cannabis to fill the gap left by a lower demand for tobacco – should local laws change accordingly. It is seen as unlikely these countries would have the necessary agricultural infrastructure to provide for the international medical market but cultivation for the recreational market is a realistic expectation – especially seeing a though they are already doing that – albeit for an illicit market. They offer a cannabis-friendly climate, low-cost land and inexpensive labour.

The effects of such large scale cultivation could produce vast profits for companies packaging and distributing what is perceived to be a premium product. These products go beyond dried flowers as the essential components of cannabis – cannabinoids, terpenes, and flavonoids – could be extracted locally before shipping and finding their way into more advanced CPGs such as edibles, beverages or health products – all of which have a higher markup than the raw product itself.

Investment in the legal cannabis topped 12.4 billion Euros in 2018 a figure that increased 295% from 2017, and already, 2019 is on pace to shatter 2018’s record deal flow. Europe’s share of global cannabis investment is growing as more countries adopt medical cannabis laws, and as support for full legalization rises. And as European countries have opened the doors to internationally produced cannabis, Europe has become the top export destination market for the emerging global cannabis economy.

Europe’s cannabis industry is at least 5 years behind the U.S. and Canada, but, population wise, it is a potentially much larger market. It is no wonder that Investors and Financial Institutions have their sights on European cannabis brands and auxiliary companies. Startups are forming and seeking capital to be the first to market in this fast-growing space.

Whether you are looking to invest – or seeking investment – in European cannabis or hemp related companies we can help you navigate the complexities.

Hemp agriculture is well established across many European countries. The European Industrial Hemp Association represents 200 members from 25 EU states (and other countries). Their members are primarily farmers, processors, and manufacturers.

As with any crop, hemp production relies on auxiliary companies to supply technology, equipment, seeds and more. Hemp can be processed by the farmer or other companies into extracts containing CBD, flour, protein, food products, hemp oil, fibres, and raw materials.

Hemp fits a growing trend across Europe for healthy, environmentally conscious foods and other products.

Using hemp as a raw material for manufacturing offers many ecological advantages to other materials such as petrochemical-based plastics, textiles such as cotton, or paper made from wood pulp. Hemp – which can use all parts of the plant – is becoming a more economically viable option for farmers.

Advances in science and technology are discovering new applications for hemp derived products – for example, hemp-based polymer materials (plastics) can be used as biodegradable replacements of plastics in films, injection moulding, vacuum forming, blow moulding, packaging and many other applications that would have previously relied on products derived from petrochemicals.

Automobile manufacturers such as BMW, Mercedes, Porsche, Jaguar and Volkswagen have been using hemp-based composites and plastics for interior door paneling, dashboards, body molding and hemp-based textiles for interior upholstery.

As with any business sector, the cannabis industry requires logistical support. The main hurdle with moving cannabis around – particularly over country borders is the fact that THC is a controlled substance.

Depending on the country you wish you import to will depend on whom you will apply to for a license.

For medical cannabis that is delivered to patients via a pharmacy, they will rely on typical distribution hubs and transportation as used for traditional pharmaceutical drugs – but this is reliant on local laws. Countries in Europe also have different rules for importing CBD and other products derived from hemp.

Using hemp as a raw material for manufacturing offers many ecological advantages to other materials such as petrochemical-based plastics, textiles such as cotton, or paper made from wood pulp. Hemp – which can use all parts of the plant – is becoming a more economically viable option for farmers.

Advances in science and technology are discovering new applications for hemp derived products – for example, hemp-based polymer materials (plastics) can be used as biodegradable replacements of plastics in films, injection moulding, vacuum forming, blow moulding, packaging and many other applications that would have previously relied on products derived from petrochemicals.

Automobile manufacturers such as BMW, Mercedes, Porsche, Jaguar and Volkswagen have been using hemp-based composites and plastics for interior door paneling, dashboards, body molding and hemp-based textiles for interior upholstery.