Tag: Europe

Next week, on January 13, the first cannabis ETF will launch in Germany on the Deutsche Börse in Frankfurt. Created by Canadian asset manager Purpose Investments and HANetf, the Medical Cannabis and Wellness Ucits ETF (CBSX) is well-timed at least, to take advantage of the developing shape of the market for the next several years. CBSX is domiciled in Ireland with passported sales to the UK and Italy.

This is, obviously huge news and from a number of fronts beyond being a first mover in what is likely to be an interesting basket if not a portfolio of opportunities scattered all over the continent.

The second reason this is significant of course is that this marks the first time the Deutsche Börse in Frankfurt has actually seemed to embrace the idea of cannabis stock trading at all. This has been hotly fought battleground since 2018 when the exchange briefly delisted all North American cannabis stocks before putting the entire sector on probation ever since.

However, that was so two years ago. These days, with cannabis reform afoot in every European country right now and of even the first inklings of the recreational kind, the world is clearly changing.

Further, that such an announcement comes after a fall of almost continual scandals from the Canadian side of the world, and a regulating industry on this one, cannot be overlooked. The industry from this side of the ocean is in the thick of accepting and meeting the challenge of a regulatory landscape that is not only higher than in North America but also changing thanks to harmonization of global standards.

ETFs, or exchange-traded funds, hold huge potential for investors looking to invest in the vertical but afraid of the cross-class volatility of the industry in general. Sure, cultivation in warmer, cheaper labor climes is afoot, but not all cultivators understand the distribution game. And of course, distribution is currently seen as a “hot ticket” but there have been several flameouts already.

That said, of course, for all the bumps and bruises of an exploding if not establishing industry, and inevitably more to come, the way appears to be smoothing for a regulated financial trade market in the heart of Europe. 

And that is a very cheerful way to welcome in a new decade of reform.

Be sure to book tickets to Europe’s hottest cannabis conference, the International Cannabis Business Conference, held in Berlin, Barcelona, and Bern this year!

For all the delay and all the obfuscation about all things cannabis, even in Germany, there are signs this Christmas that things are changing faster (at least unofficially) than anyone could really predict.

Cannabis reform has come to the European continent this year in a big way, even if the first initial gains were small. There are more patients than ever before and in more countries, and even though “CBD” still remains a dirty word to some, there are clearly signs afoot that the market for these products is happening whether regulators want it or not.

CBD stores are opening in Germany, and even advertising on the sides of streetcars. In Frankfurt (far from the hipness of Berlin) two opened this fall in the middle of the city.

Right before Christmas hemp rum was found in a mainstream German grocery store, and imported to Germany not from Jamaica, but from the UK.

Such unusual hybrids are also still the norm in this market.

It probably won’t be much before 2021 that Germany again takes up the question of recreational reform. But in the meantime, other products are finding their ways in, slowly but surely.

Beyond streetcars, medical cannabis advertisements are appearing in medical-only publications, and even further for generic, white-label kinds of medication. The battle for pharmacists and doctors is clearly on.

The Battle For The Soul And Market Entry Of Cannabis Is On In Europe

For all the drama, and all the noise, it is clear so far that the cannabis industry has barely broached the continent, on any front. That said, it has made landing.

2020 may not bring any great strides forward, but don’t knock slow and steady progress, which is happening just about everywhere.

There are also clearly markets that will drive others. Germany will continue to be a powerhouse, on all fronts, just because of the insurance question and its economy. With Britain brexiting, look for all kinds of experiments on the recreational front, although don’t expect the NHS to massively step up on reimbursements beyond GW Pharma product any time soon.

With 2021 clearly on the agenda however as a turning point year, the industry in Europe has, for all the retrenchments of the Canadians this fall, only one way to go. Up.

It is also clear, from the products now making their way onto German shore shelves, at least, that the creativity and entrepreneurial juice is just beginning.

Be sure to book your tickets to the International Cannabis Business Conference in Europe next year!

As 2019 comes to a close, what happened of note this year in Europe in regards to cannabis and what does this bode for next year? 

For all of the doom and gloom, if not scandals, on the Canadian cannabis front, it is clear that the cannabis industry has at least established itself in Europe in the last three years, albeit via niche rather than mainstream market entry strategies. Next year, while it is unlikely to see any “blockbuster developments,” it will be a building period yet again.

Scandals Were Inevitable

With laxly enforced, if not changing, regulation and Health Canada regulators overwhelmed, it is not surprising that there were both disasters and scandals this year, beyond any deliberate “bad actors” (although there were clearly those in the room too). That said, although the response from official sources has, so far, been slaps on the wrist, do not expect that to continue. 

In Germany, as of the end of the year, cultivation bid winner Aurora had zero cannabis in the country thanks to a GMP investigation at the source by German officials. This trend, and in countries far from Deutschland is likely to be a dominant theme in 2020.

In Europe at least, it is not just rules about cannabis that are changing. Harmonization of food and medical standards, which includes discussions about everything from pesticides to labeling, are in the room next year across the region because of European law and international harmonization.

Brexit will throw more questions into the mix.

Cannabis Europe, in other words, is set to have another growth year in 2020 – and in equally strange, one step forward, two steps backward kinds of ways.

The timetables for reform of greater kinds are now in the room, however, there is clearly a holding pattern too which is shaping up, as previously widely predicted, to be at the end of 2021. That is when Luxembourg is expected to allow the first national recreational market in Europe outside Holland.

With this stake in the ground, both non-EU countries of Denmark and Switzerland, also are likely to move in tandem but with probably not too much ahead.

In the meantime, smaller distribution deals are afoot, even in Europe’s most conservative markets.

Also, local producers, not backed or affiliated in any way with large companies (of either Canadian or even European extraction) are eyeing a clearly opening market, no matter the pain, stutters, and retrenchments that still inevitably will be found along the way.

Be sure to book your tickets for International Cannabis Business Conference Europe in 2020 in Berlin, Barcelona, and Bern!

The international cannabis scene is many things, but one thing is for sure as the industry heads into 2020 – regulation, inspection, and certification are in the room, and further in a way so far unseen in either Canada or Europe so far.

Why is this trend now clearly on the horizon for the next year, if not a few more beyond that?

Part of it has to do with cannabis as an industry and part of it has to do with much larger currents afoot in the form of global trade treaties. 

Europe Is More Highly Regulated

For those who have never visited the continent, and in particular for Americans, there are more regulations in the room in Europe compared to other parts of the world. These are designed to protect human health, no matter how frustrating the discussion about CBD and Novel Food is these days.

Further, this is not just a discussion about one certification or regulation, but many.

There are several big issues in the room beyond any one certification.

Harmonization Is Afoot Globally

In addition, the global discussion on “harmonization” is well underway. Basically, countries who trade food and medicine with each other want to know that their production, packaging and testing standards are more or less the same. 

This is absolutely true for any medical cannabis crossing the Atlantic or international border.

Bio and Organic Are In The Room

Bio means a great deal to Europeans – even if German farmers right now are peeved at the increasingly levels of regulations against certain kinds of pesticides, and bio is a watchword for the cannabis industry here.

However whose bio matches whose internationally is just as fraught a discussion as the one about GMP, and indeed frequently crosses over.

Cosmetics And Food Are In Some Ways Tougher Than Medical

No matter the difficulties on the GMP front, the recreational and lifestyle discussion remains a lot tougher. For one thing, authorities across Europe are playing semantics with cannabinoids. Namely in the more conservative parts of the continent (see Austria and Germany) authorities have gone so far as to say they do not see any positive effect of any part of the plant, or that cannabidiol, even when applied topically, is a strange new beast in the history of human consumed and applied products.

All of These Issues Will Still Be Here For Recreational Reform

None of these issues will disappear anytime soon. Food and medicine production is getting more regulated beyond cannabis. However, because the cannabis industry is the new kid on the block and because of the growing connection of the plant to health products if not a healthy lifestyle, expect this conversation to continue to shape and impact the industry. Everywhere.

As the Weihnacht (Christmas) markets enter their second week auf Deutschland and the world prepares to say goodbye to the first decade of serious, if not modern, cannabis reform. Where is the European market heading next year and what should investors be looking for?

Particularly with all the drama going on in Canada, what is cooking where and what is worth evaluating for investment across the EU?

Regulations Are Still A Bear

While it is easy to get bullish on news that Luxembourg is pushing the recreational agenda in the middle of the continent, also remember that this is just a tiny country of about half a million people, which also must conform to the laws of the European Union around it.

Don’t expect anyone to launch a Cannexit – i.e. departure from the Union because of cannabis reform. Indeed, at least one country, notably North Macedonia, is using cannabis as a bid to enter the union, not leave it.

Don’t expect things to get easier on the regulatory front either, starting with the news that the EU is indeed making every country within the union give up certain kinds of pesticides. This is currently causing German farmers in general, far beyond cannabis, to literally protest in the streets of Berlin. The Tractor March notwithstanding, it behooves the cannabis industry to be in front of these regs, not behind them. Starting with the medical market but not limited to the same.

Novel Food is also in the room and will continue to confound the rest of the world outside Europe who do not get a grip on what this means about sourcing, production, and manufacturing far beyond the plant.

There Are Emerging Bright Spots

No matter the doom and gloom coming from the Canadian side of the room there are many bright spots developing across the map. The key here is to understand the regs and the temperature of the market. It is not enough for growers to want to produce cannabis. They have to meet several critical barriers, including obtaining a first license, before they are really worth anything. That said, there are projects underway from Portugal to Greece right now that are starting to fit that bill.

However, no matter how much the cultivators need capital, it is not, as everyone realizes, the raw plant that is where the “money” is. Distribution right now is the key to obtaining a spot on the map, and that means good sourcing and good contacts on the ground in the moving markets.

That still, largely, means Germany, but it is not inclusive of the same. The UK is opening glacially, Poland is coming fast, and do not, of course, forget either about sunny Spain or interestingly neutral and independent Switzerland.

Innovative cannapreneurs in all of these regions are progressing the discussion, if not moving their companies forward, no matter the setbacks, delays, and bickering about rules in the room.

Be sure to book your tickets for the best cannabis industry conference in Europe – the International Cannabis Business Conference held in Barcelona, Berlin, and Bern in 2020!

For all of the hurdles that exist in the European market, there is one avenue that has, so far at least, remained remarkably unexplored. That is certainly the case on the financing end.

Yes, European family offices are conservative, and “equity” (at least as it is thought of in the North American sense) remains less interesting in the free for all of public markets among Europeans compared to their cross Atlantic peers.

However, for the right canna-entrepreneur, the most attractive thing about European financing so far has remained largely off the table. Namely tax credits, especially of the R&D and tech kind (although there are other kinds of credits on the table when crossing into related fields.)

Yes, there are rules about this kind of thing (and a lot of regulations). But as a vehicle for helping to offset the risk of evolving medical cannabis projects in particular, the pursuit of obtaining these tax credits has so far remained in its infancy.

It won’t for long. 

Where, Why and How Will This Impact Industry Growth?

For an industry that so far has financed its highest fliers via the public equity markets (and exotic financial instruments like reverse mergers), the European financing options now on the table are intriguing, if not much more attractively legit. 

Tax credits have already shown up of course. The largest firms from Canada are hip to this game. But increasingly so are the smaller players, and that is where tax credits and other financial instruments and structures here will start to play a bigger difference.

Writing off the construction of a GMP facility may not be entirely “experimental,” yet putting a new drug into it certainly could qualify. That’s especially true with any kind of qualifying research attached.

Right now, that is a siren’s song to a green industry that has frequently been short of cash.

Who Can Use This Kind Of Financing?

The best thing about tax credits is that they operate as a kind of insurance for investors looking for some way to offset the risk of investing in a new market. Cover the investment with a multi-year tax credit just in case? That is, for those who have a need for such vehicles, a no-lose proposition.

The only catch is that entrepreneurs need the right team (experts, including lawyers, and financiers are a must.) This is not something you do at home, or by yourself.

For the latest in Euro-financing strategies, be sure to attend the International Cannabis Business Conference 2020 in Europe in Barcelona, Berlin and Bern!

While the big Canadians are taking their beatings there is a new hum of something green and growing afoot in Europe. Namely, with all the buzz in the air about cannabiz business by the Canadians, the Americans, and just about everyone else, European farmers are not waiting things out.

The cannabis industry rules are starting to change and fairly drastically. Those on the ground in opening markets such as Malta, Spain, Portugal, Denmark, and Greece are doing the math. Traditional agricultural crops or medical cannabis, especially in an oil-based or distillate form. You don’t have to be Einstein to “do the math” and see the potential of cultivating cannabis.

Corporations saw the potential long ago, however, private farmers are eyeing the lucrative cannabis cultivation sector too. Those in the 10-30 million euro range are amply equipped to go to the bank for a loan at a standard European bank, to convert greenhouses already purposed to meet European food production guidelines.

That means that the party, as they say, is in fact just getting started. Calling all European family offices. 

A Turn In a Very Green Tide

For those who have not been watching, the world is changing fairly rapidly. Beyond the clean-up, let alone admission of the Great Garbage Patch, there are icebergs melting rapidly. All of those zombie apocalypse Netflix zingers have an awfully realistic view of what appears to be becoming reality rapidly.

You don’t have to be a 16-year-old girl to understand that the world is literally, melting.

This means a couple of things. For the cannabis industry, it means that local production of local medication is a political must that is showing up in a lot of international, if not transatlantic, discussions right now.

To people that honed their teeth on local, state, and even federal politics, the international perspective is equally bizarre. On the ground? It means that the local business communities left out of the conversation so far (from Germany and Spain to countries far from there) are finding a green vest cannabis voice that will not be stopped.

For all its hiccups and bumps, in other words, local European production is now in the room. And it isn’t goin’ back.

Be sure to attend the global 2020 International Cannabis Business Conferences in Barcelona, Berlin, Bern, San Francisco, and Vancouver, B.C.!

The newest announcement that Tilray has arranged the largest cross-European border transfer of medical cannabis to date is cause for celebration for more than just the two firms on either end of the deal. Cannamedical, the second oldest cannabis specialty distribution firm in Germany was on the other end of the deal.

The news is actually bigger than just this one announcement. It officially marks a new day in the greater cannabis industry in general.

There are many swirling currents in the international environment right now – perhaps the biggest of which are both CETA and the EU-US MRA Trade Agreement, which just kicked into full swing in July. That along with the 1961 Convention and existing MRA (pharmaceutical trade) agreements mean that there are new pathways for canna products opening up as reform hits on either or both ends of established pathways. 

But as of this fall, much like the now melting icebergs are creating new transatlantic pathways through the Arctic, the cannabis industry is entering the marketplace through all sorts of interesting passageways, and there are plenty of treacherous, mostly submerged hazards to navigate.

Who Is Coming Up To The Plate?

‘Who is getting involved’ is an interesting question, as European farmers are realizing, pretty much all over the map, particularly on the large commercial greenhouse side of the equation, that they are also in the running for the medical business. If your main business is tomatoes or peppers, for example, medical cannabis crops sound like a compelling idea right now.

Cross European trade of EU certified crops is on the upswing in other words, just as South African and Australian producers are also entering the market. And Israel is, of course, waiting to pounce.

Certification Is Key

While EU GMP regulated CBD producers in the U.S. right now are lining up for a bonanza on the medical side, there are many in Europe who see the writing on the wall and are aiming to play the game too. Greek produced medical CBD for example, may well beat anything out of the U.S., at least on cost. And who knows? Most of Eastern Europe is still in the running as a dark horse candidate in the medical market as the attention of the big players shifts towards recreational reform.

Regardless, for those with the right certs and audits, the map is opening, and further on a fairly global way, for a new trade whose day has most certainly come.