Home to more than 740 million people, Europe is all set to become the world’s largest industry for cannabis over the next five years. Experts say, the European cannabis market is estimated to be worth €123 billion by 2028. Europe has invested more than €500 million in the marijuana industry thus far, and six countries have declared new legislation regarding the consumption, growth, and sale of cannabis. Currently, Spain, France, and the U.K. are reviewing the legislation. Whereas, Netherlands, Germany, and Italy are concentrating more on developing existing medical programs. When comparing Europe and America you have to realize that Europe is made up of many different countries and that different countries in Europe are more similar to the different states in America.
Here are the 19 countries in Europe that have legalized some form of cannabis:
- Czech Republic
- United Kingdom (U.K.)
- San Marino
When compared to the Canadian and the U.S. markets, the cannabis industry in Europe is not as big, but in the coming years, significant growth is expected. In 2018, out of the total medical marijuana sold in Europe — 76% of sales were from Germany, followed by 16% from Italy, and 4% from the Netherlands, while the other countries have only contributed to 3% of sales.
The History Of The Cannabis Business In Europe
In the 1970s, coffee shops facilitated on-site consumption and sale of cannabis in the Netherlands. However, the possession, cultivation, and supply of marijuana were strictly prohibited and regarded as punishable offenses.
With the passage of time, local municipalities licensed and tolerated the consumption of marijuana in the Netherlands to keep adults away from more dangerous drugs. Looking at this, locally developed civic groups in other European countries like Spain formed ‘marijuana social clubs,’ which are now legal in the country.
Over the past two decades, the public opinion of medical marijuana in Europe has greatly changed. Immediately after cannabis was legalized in California, Europeans also pressurized their lawmakers to allow the use of cannabis for medical treatments. The regulation and legalization of medical marijuana helped countries suffering from economic crises such as Portugal, Greece, and North Macedonia, to boost employment opportunities and promote the cannabis industry. In 2018, the cannabis industry was the fastest growing industry in the United States, and this will affect the European markets as well.
Sub-Industries Of The Cannabis Market In Europe
Undoubtedly, medical marijuana is the driving force of the cannabis industry — the scientifically-proven health benefits and its popularity, makes this industry appealing to investors. However, other sub-industries in the European marijuana market could reach or surpass the figures produced by medical cannabis.
Here are the popular sub-industries of the cannabis market in Europe:
- CBD (Cannabidiol)
CBD (cannabidiol) is a type of cannabinoid, which is found in the cannabis plant. It has various health benefits, including improved sleep, anxiety relief, pain relief, and is also known to treat dermatological related issues. One of the main selling points of CBD is that it does not get you high; instead, it produces several effects based on medical marijuana. Nowadays, the CBD industry is gaining a lot of popularity in Europe because it is legal and can be easily extracted from the cannabis plant. For this particular reason, many hemp farmers have cropped up.
As per a report shared by Orian Research Group, the CBD industry in Europe brings in €450 million per year and represents about 31% of the global market. This shows the higher demand for hemp in Europe. At the same time, when it comes to consumption and production, CBD is not evenly distributed across the continent. A few countries like Switzerland have more tolerant legislation as compared to other countries, which encourages both consumers and producers. Also, Swiss lawmakers allow tobacco shops to commercialize CBD, thus making Switzerland one of the most vital players in the European marijuana industry.
Hemp, is one of the oldest and fastest-growing crops on the planet. It is basically a strain of the Cannabis sativa plant, which is refined into clothing, plastic, textiles, food, paper, and fuel. Both marijuana and hemp come from the same cannabis species, but are genetically different and are further characterized by its use, cultivation methods, and chemical structure. Hemp oil and hemp seeds are mostly processed into food and beverages due to their high nutritional value. Hemp is also rich in minerals and is an excellent source of Vitamin E. As stated by Grand View Research, the industrial hemp market worldwide will reach up to €9.4 billion, with a growth rate of 15% every year.
Recently, hemp has gained more popularity because its extracts can be used for both recreational and medicinal purposes. In January 2019, Europe’s Novel Food Catalogue was modified by the European Commission. The new version states that the products containing cannabinoids and hemp extracts will be considered ‘novel foods.’ Whereas, hemp seed oil and hemp flour will not come under the category of novel foods. This revision makes the hemp extract safer for the average consumer. Still, it may prevent small businesses from entering the market because the PMA (premarket approval) may cost up to €300,000 per product.
- THC (Tetrahydrocannabinol)
THC is another type of cannabinoid, which can be found in cannabis. It is the main compound in marijuana that produces psychoactive effects and gives the high sensation. Tetrahydrocannabinol can be consumed by smoking marijuana. It is also available in capsules, oils, tinctures, edibles, and more. Pretty much anyway as long as the THC reaches a certain temperature.
Most European countries restrict the use of THC, but some countries have set their own standards for THC. Many countries in Europe comply with the Union’s recommendation and have banned the use of products containing more than 0.2% of THC. However, some member states do not abide by the EU’s rule. For instance, Switzerland permits the consumption and possession of cannabis extracts that contain up to 1.0% THC. This allows manufacturers to produce products with high-THC for customers who are looking to get high.
- Other Cannabinoids
Cannabis extracts are becoming increasingly popular day by day. A large number of consumers in Europe are willing to try other cannabinoids like CBG (cannabigerol), CBN (cannabinol), and more. These cannabinoids are less popular than CBD or THC, but they are slowly becoming known amongst the European public.
Legal Status of Cannabis in Europe
- Recreational Cannabis
Recreational cannabis refers to any THC cannabis that is used for non-medical purposes. Presently, the use of recreational marijuana is illegal in Europe, but trends are changing, and there is a slight possibility of legalization in the next three to five years. It is estimated that the recreational cannabis market in Europe will reach €65 billion by 2018. Also, over the past ten years, new products, supply channels, and distribution have improved the presence and consumption of cannabis throughout Europe. Ever since 2018, countries like Italy, Germany, Greece, Malta, and Denmark have considered regulating the cannabis market fully. Whereas, Luxembourg has promised to regulate adult use of marijuana before the beginning of 2023. The major driving forces for the introduction of a legal recreational cannabis market in Europe include employment opportunities, the potential increase in tax revenue, and reduction of crime.
- Medicinal Cannabis
Medicinal cannabis refers to the plant-derived or plant-based cannabis products prescribed by medical practitioners. The medical cannabis products are produced in the form of capsules, plant materials, tinctures, oils, or edibles. Many countries in Europe have legalized the use of medical marijuana, and the ones that are left will legalize it soon, probably within three years.
With a total healthcare expenditure of €2.3 trillion and a market of over 740 million people, Europe will be one of the largest cannabis markets in the world over the coming years.
Insurance companies in Italy, Israel, Denmark, and Germany have already started covering medical cannabis prescriptions, predicting that in the future medical cannabis prescription will be an essential requirement of the healthcare policy.
Most Renowned Organizations in the European Cannabis Market
Endoca was established in 2006 by Henry Vincenty. This company has been around for a much longer time than other CBD organizations in Europe. Moreover, it was the first company that started selling CBD online. The headquarters of Endoca is based in the Netherlands, and its hemp fields are situated in Denmark. Besides, the company ships the CBD-based products throughout Europe from its warehouse in Germany. All in all, the company is involved in all stages of production of CBD, following a seed-to-shelf business model.
Royal Queen Seeds is one of the fastest-growing and the most famous European cannabis shops online. This organization sells a variety of cannabis-based products, including CBD oil, feminized plants, medical seeds, and more. The company also operates various stores in Barcelona and Amsterdam, and it ships products all across Europe.
In the European market, Storz & Bickel is the largest manufacturer of vaporizers. This company is recognized as one of the best in the industry of vaporizers. You can find their products in all head shops throughout Europe.
Agropro is presently the largest hemp supplier, processor, and producer in Europe. This company was established in 2007, and it expanded its profile in 2013 when they started with food production and agriculture. Agropro handles all the steps involved in the production process, from cultivation to delivering products, following a grain to table policy. This organization is located in Lithuania and collaborates with several European companies.
The Future of the Cannabis Industry in Europe
The cannabis industry is poised to grow in Europe rapidly, but this growth will also bring some changes along.
In February 2019, the European Parliament acknowledged a motion for medicinal use of marijuana, which would focus on scientific research of cannabis and will make the European Union members reconsider the legalization of domestic marijuana. When it comes to exporting and importing marijuana, the landscape of the cannabis industry will entirely change, especially when Germany will start harvesting cannabis for sale purposes. Meanwhile, the Netherlands is working towards increasing the cultivation of medical cannabis by establishing a cultivation application process. Additionally, the big cannabis-based organizations of Canada are purchasing lands in Europe to expand their activities. Popular companies like Aphria and Aurora Cannabis have been selected to grow marijuana in Germany for four years. Also, the company named Demecan, which is located in Berlin, received a contract of four-years to cultivate marijuana in Germany.
All in all, the European cannabis industry has a high potential for growth, mainly when referring to the cultivation, distribution, production, or sales of marijuana. And it’s only a matter of time until Europe will become the best place in the world for cannabis businesses.