Tag: Europe

By Marguerite Arnold

If 2014 was the year that the recreational cannabis market finally got going in the U.S. and later in Canada, 2019 may well be remembered as the same kind of year on the other side of the Atlantic. Despite the well-connected winks and assertions by many of the top cannabis companies in the world that the ball will finally shift circa 2020 or 2021, the first whiff of real change is afoot this year across the European continent.

But what does European reform most broadly resemble? Earlier in the year, big Canadian execs were frequently in the media expounding that Europe will be “just like” Canada. However, that is clearly not the case. In fact, what appears to be shaping up is that the European market will, in general, be much more like the American market path to reform.

However, even that is also not the whole story. Like the Canadian market, each European “state” domino that now flips into the recreational column will also carry national regulatory punch. If not compliance.

Europe is in effect, set to be a distinct hybrid all of its own.

Why?

Beyond EU regulations, each member state will be setting up its own national (not state) system. This has far more impact on local citizens, as well as policy and regulation setting.

Why Is Europe More Like The US Market?

The states’ rights movement aside, most Americans are impacted by their state rules and regs than federal ones. This is true from civil and consumer rights to market regulations. In Europe, while this is also true within countries themselves, the movement of the issue on a “federal” state-level means that the reforms are being baked in at a higher level earlier.

However, it also means that federal reform is also often far removed from those it affects the most. In Germany for example, patients lost the right to grow their own even as insurance companies were then put on the front line of payment. So far, that has resulted in a large medical market where dronabinol is usually the first drug on offer.

This is very much like the United States where dronabinol was first introduced to the medical community during the AIDS crisis. The failings of the drug are well known, no matter how cheap it is.

Unlike in the US, there is at least more possibility of obtaining insurance coverage for the drug. And unlike the US, certainly at this point, patients who do not like or cannot tolerate dronabinol are faced with few options outside of the black market (still).

Why Does Europe Look Like Canada?

To the extent at this point that both American and Canadian companies are in the money, with well-connected lobbyists at the European level, yes, European reform looks a bit like the Canadian model. What is missing, however, is any country declaring that individuals have a constitutional right to access the drug. Canada also does not have any insurance mandate to cover the drug.

Author: Marguerite Arnold

Canadian canna-businesses have had a giant head start, but they do not have a monopoly on international cannabis supply or the supply chain. And competition is on the horizon as a slew of newly budded cannabis companies are targeting Europe.

These newbies, mainly from Thailand and South Africa (and possibly Israel) are weaving their way through the thicket of international cannabis regulations right now. Spain, Portugal, Macedonia, Greece, and maybe even Poland are not too far behind, and many German ganjaprenuers are still looking for ways to get into the game

The “big boys” do not have a lock on any part of the industry, regardless of brand recognition or market presence. In the case of Canadian CannTrust, certainly that can be either a blessing or a curse. But reality is hitting the market.

Canopy is selling dronabinol to German patients (who hate it) and its German vapes to Americans – who already loved Storz and Bickel.

Everyone, in other words, who understands the market, realizes you cannot be everything to everyone.

Yes, the big public Canadians in Europe are sourcing from everywhere else, but this makes them even less price competitive in the EU. Dutcvh Bedrocan has proved that If you have a good presence on the ground in Germany and the UK, you can compete with even the deepest pocketed Canadians. But to compete, you need a good distributor in Deutschland and you need to be selling, or even better, donating cannabis products for medical studies and patient trials.

But with outdoor crops now seeded in Portugal (by Tilray), just as Luxembourg announces its own recreational rule change on the horizon, turning your eyes away from the region for “hotter fish” elsewhere is a mistake.

There are many interesting things afoot right now in Europe. Despite the distractions of the U.S. market and the scandals coming across the Atlantic, Europeans are setting a different pace.

Luxembourg has now pushed the bar for a sovereign discussion of cannabis legalization. Poland is setting up to do something. Swiss, Danish, German, and British medical trials are all on the calendar, and some have already started..

The reality for those with any sensitivity to a European wide conversation at the moment, is that, despite the occasional flare ups over medical efficacy and cost, Europe is on the brink of a breakthrough, and it seems that systems, rather than strains, are what will be the differentiator here for some time to come.

There are challenges in the European markets. Spanish health insurers are not the same as Dutch, German or the British NHS. But the medical cannabis market is rising at the same time as adult-use cannabis legalization is gaining ground in country after country.

People are tired of wasting money on a war they don’t want to fight – especially when there are so many other more looming and pressing issues. Plus there are the local economic bennies.

Europe is pondering some basic questions that everyone knows must be considered. Yes, sales are slow, but right now European cannabis sales are all a function of restrictive medical cannabis programs. Given the history of medical use leading to recreational use as seen in the USA, can full legalization be far behind? Conversations impossible just five years ago are in the room. And the industry is getting organized and stirring.

The sense of green ownership across the continent, in other words, is a great green giant that may be a bit “slower” in the offing. But it is awake and rumbling.

The International Cannabis Business Conference is the best industry event to learn the latest and to network with top investors and entrepreneurs. Next up: Vancouver, Canada, this September 15-16, featuring top experts in the field, PLUS a performance on a luxury yacht by Cypress Hill’s DJ Muggs at the after party. Don’t delay, purchase tickets today!

Written by: Marguerite Arnold

International Cannabis Investment Hotspots That Aren’t Canada

Canada always has a lot of buzz as a great place for folks looking to invest in the international cannabis market. However, Investing in Canada can be tricky, and some would say that it’s almost too late to get in on the ground floor. Germany is hot, but there are also many countries just east of Germany that merit strong consideration from international investors. While these countries may require good research and an attorney well-versed in international law, there are opportunities sprouting – if you know how to look for them.

Due diligence is the first step, of course. While the same can be said of all canna investments, these countries require a little extra work, especially for those used to much laxer standards in Canada and the U.S. Particularly as you begin to head east and even more particularly, if you are looking outside of the EU (Hello, Macedonia!). Germany is, of course,a great place to start, but there are other opportunities just now starting to bud.

One more thing: If you expect to become an overnight millionaire, forget it. This new frontier is where low costs are driven by labor, and exports to Germany are the name of the game. A 10x ROI is not a multiplier to expect, although (especially if you have a great team), there are plenty of good returns to be had, and Eastern Europe is intriguing in part because very few people really understand or know much about what is happening right now.

Where should investors be looking?

Poland. This little sleeping gem to the “right” of Germany is about to pop. Powered by a burgeoning domestic medical population and export opportunities right next door, Deutschland’s “little sister” is positioned to become (among others) Jens Spahn’s best friend. For those who do not recognize the name, Spahn is the Health Minister of Germany. He just upped the import quota from Holland twice in the last nine months as German bids have decreased and been delayed by lawsuits and regulatory hurdles. Upping Holland’s import quota (Twice!) sends a strong message to the Canadian industry – at least from a pricing perspective. Combine that with a rash of “scandals” involving Candian cannabis companies, and mow the entire North American industry is under double secret probation. Some investors see Canada headed for another rocky summer and are looking east for new opportunities.

Greece. The Israelis, Canadians and a few other folks are already there, but Greece is still a goldmine of because the Greek government – still recovering from the Great Recession – has thrown open its doors to foreign investors, especially investors looking to combine cannabis with construction, land purchase and the tourist industry. The potential is staggering/

Croatia. Still early in the game, but German tourists love Croatia. Some see it as the Nevada of European cannabis.  Reciprocal medical rights anyone?

Macedonia. Macedonia is not a member of the EU, but that is part of its appeal for the right investors. Because Macedonia needs to step up its economic game to fulfill its dream of joining the EU, many in the Macedonian cannabis industry (although there are still a few bad actors – diligence is important) take compliance with EU standards very seriously. This industry is a boon for the country.

Written by: Marguerite Arnold

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.