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State Of The Cannabis Industry: Spring 2021

Written by Marguerite Arnold on . Posted in Business.

Green shoots and leaves are poking up all over the place as the industry figures out how to survive the Pandemic as well as other powerful forces.

There is a sense within the industry these days that the long tail of the Pandemic might last for another couple of years, but this is no excuse for slowing down. Indeed, all over the continent, from business development meetings to organization of another kind, there is a sense of resolve that is evident. Namely, that while Covid might be still kicking ass, the industry is determined to power forward. After all, the veterans have seen bigger challenges go down (starting with any kind of legalization). Covid may be a global health emergency, but it is not the first that has helped shape the industry (starting with AIDS). 

For this reason, from the medical side to those on the CBD side of the discussion, those in the thick of business development are having a busy spring just about everywhere in Europe.

Things to Be Aware Of:

Here are a few big-ticket issues that are certainly making a difference:

  1. The CBD industry is certainly taking off and going mainstream in interesting ways – no matter the still existent hurdles (and they exist, starting with Novel Food).
  2. The medical industry is still in the nascent stages of formation – starting with compliant cultivation and production.
  3. The entire conversation is going to get far more interesting thanks to the recreational trials in Luxembourg and Switzerland. Namely, other European countries are going to be given a model to begin to follow or adapt in the face of tailwinds from a Pandemic where almost every form of economic development is on the table. This includes cannabis – and even in Germany. In the meantime, the medical conversation will continue to go forward, no matter how frustrating it can be from the front end of the trenches.
  4. Paths to market and accessibility will continue to improve, but behind all these developments is certification. Financing will become more and more dependent on the same (including going public). See the activity on the London Stock Exchange. 

The entire industry in other words, is pulling its proverbial socks up and getting ready for the next stage of development just about everywhere. Europe, certainly, is at a turning point.

The firms that will prosper in the next 24 months are those who can swiftly adapt and turn to changing market conditions.

Be sure to book your tickets now for the return of the International Cannabis Business Conference to Europe in July!

German Pharmacists Support Medical Cannabis, See Market Growth

Written by Anthony Johnson on . Posted in Berlin, Business, Medical, Vancouver.

The German cannabis patient community has grown by leaps and bounds since the program was approved a few years ago and the International Cannabis Business Conference is so pleased to have witness the growth firsthand, holding our first annual conference in Berlin just after medical legislation was approved. Despite a lot of bureaucratic red tape (that has loosened over time), there are now about 50,000 cannabis patients and that number could easily increase to hundreds of thousands in the coming years as cannabis goes more mainstream and prices drop.

The robust growth of Germany’s medical cannabis program isn’t only evident by the increase in the number of patients, but in clear signs that the future growth of the program is very bright. First, the increase in exports has surged dramatically as the European Union powerhouse has imported nearly as much cannabis from Canada and the Netherlands in the first six months of 2019 as it did in all of 2018. Also, very tellingly, licensed German pharmacists, those actually dispensing the medicine, not only support medicinal cannabis, but three-fourths see the market growing, as reported by Marijuana Business Daily:

According to the paid report, the majority of pharmacists in Germany generally favor medical cannabis – as long as they’re the ones responsible for dispensing it.

Three-quarters believe the German medical cannabis market will continue to grow, and among that group, 15% said growth will be strong.

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About half the pharmacists believe they are well informed about medical cannabis, but fewer than 5% responded they are “very well” informed. The rest said they were poorly or very poorly informed.

With cultivation companies in Germany now getting licensed, with homegrown cannabis expected to be on pharmacy shelves in 2020, prices will come down, variety will increase, and local lobbying efforts will strengthen. With the industry growing, as German pharmacists and virtually everyone expects, advocates will become more influential with policy makers, and the bureaucratic hurdles slowing the medical program will start to be removed. Eventually, the lobbying effort and public support will garner enough votes to legalize cannabis for all adults. When they do, will German pharmacists still be the sole dispensers, or will the market open up to more retail outlets? Only time will tell.

The International Cannabis Business Conference is THE industry event to learn the latest and to network with top investors and entrepreneurs. Next up: Vancouver, British Columbia, Canada, this September 15-16. Purchase discounted early bird tickets by August 21st to save.  

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263 Million Cannabis Consumers and Taxation – A Delicate Balance

Written by ICBC Staff on . Posted in Berlin, Business, international cannabis business conference zurich.

With 263 million estimated global cannabis consumers and a total addressable market of $344 billion (illicit and legal combined), cannabis is poised to make a material impact on the global economy. As the cannabis markets in Europe, Latin America, Asia and even Africa are beginning to take shape, one commonly overlooked regulatory detail is the effect of taxation on the potential success of these new markets. Specifically, how higher than needed taxes can not only inhibit new market entrants ability to operate effectively, but can also fuel growth within the illicit market.

To that point, while still federally illegal, existing U.S. state cannabis markets provide crucial lessons for emerging legal markets. California, for example, imposed an effective tax rate of nearly 40-50% on retail products causing many consumers to stay loyal to the illicit market. It resulted in a massive dip in projected state tax revenue in their first year of legalization- nearly 90 million dollars short of their goal.

“Tragically, this is not the first time we have seen poorly thought-out imposed taxes have the exact opposite effect than intended;” said Giadha Aguirre de Carcer, Founder and CEO of New Frontier Data, “during our early years observing new U.S. states legalize, consumers in both the states of Oregon and Washington turned to local illicit producers offering more affordable pricing, leading the states to experience growth in their respective cannabis black markets instead of generating additional tax-revenue for the state.”

Anticipating the elasticity -the sensitivity of consumers to prices and price changes -along with other crucial factors such as identification of consumer preferences, is critical when establishing new cannabis markets. Without understanding such delicate market drivers, countries and states alike will fail to meet projected socio-economic goals. Leveraging lessons learned from existing cannabis markets, policy makers can today better plan ahead and avoid such pitfalls to instead maximize growth opportunities of a healthy and balanced legal cannabis domestic market.

“Data and reporting” Beau Whitney, Senior Economist at New Frontier Data says, “are crucial for understanding how to generate maximum revenue, to identify and to eliminate bad actors, and to ultimately better serve consumers and patients so that they do not turn to the black market.” Oregon’s standardization process is one program Whitney believes is currently effectively utilizing data management. For example, Oregon’s model on certifying testing labs and standardizing laboratory testing help elevate minimum quality standards expected by consumers and making it difficult for bad actors to compete.

In short, regions and nations with heavy pockets of cannabis consumers, looking to transition into a legal and regulated market, must better understand consumer preferences, including price sensitivity, so that state imposed taxes work in favor of domestic and regional socio-economic goals, rather than fuel crime and continued illicit trade.

For more insights into the global cannabis industry, follow along with New Frontier Data’s research at www.newfrontierdata.com.

Next up for the International Cannabis Business Conference: Zurich on May 15-16. Discounted, early bird tickets are on sale until April 24th.