Believe it or not, Europe looks set to transform into a legal weed haven in the foreseeable future.
According to a recent report from Prohibition Partners, the European cannabis market will emerge as the world’s biggest within the next five years.
Politics is acting as a catalyst for growth in Europe’s cannabis market; the European Parliament Committee on the Environment, Public Health and Food Safety is in the process of drafting “region-wide regulatory framework on medical cannabis,” which would ensure properly-funded scientific research into the plant’s medicinal benefits.
What’s more, a handful of countries in the European Union have begun or are – at the very least – contemplating amending their cannabis laws. Progress is undeniable, what with the World Health Organization (WHO) having rescheduled CBD so that it is no longer considered a controlled substance. Although no rules have been enacted for EU-wide medical/recreational cannabis legalization just yet, investment opportunities are abound.
Some European markets have already introduced CBD products for “wellness purposes”A non-psychoactive cannabinoid that can be derived from both cannabis and hemp plants has taken the wellness market by storm lately. Of course, we are talking about cannabidiol, A.K.A. ‘CBD’. On a global scale, the CBD market is projected to soar in value to $2.3 billion by 2025 (data gleaned from a report authored by QY Research).Slowly but surely, CBD is becoming a must-have ingredient to be found inside food cupboards, stocked on the shelves of health and wellness stores, and adorning pharmacies. This cannabinoid is not a mind-altering substance, unlike its psychoactive cousin THC (tetrahydrocannabinol). As CBD progresses to various mainstream avenues – such as the infused drinks market and the cosmetics market – its potential is being noticed by the European Commission. Recently, the Commission announced that CBD-containing foods will now be defined as novel foods under the European Novel Food Directive.
This means that CBD-enriched food supplements are now classed as novel foods. It doesn’t, however, mean that ingestible products are exempt from the necessary analysis, checks and registration. Over in the snow-capped European country of Austria, however, CBD-containing products are available only with a prescription. “New products, distribution, and supply channels have further advanced cannabis consumption and presence throughout Europe over the last 10 years,” Prohibition Partners’ report states. With 747 million prospective consumers to target, it’s not surprising that analysts predict such great levels of success for the European cannabis industry.
Many European companies are venturing into the legal cannabis space and capitalizing on what has been dubbed “The Green Rush” without even coming into contact with the plant. Ancillary cannabis companies are tapping into the profit potential of weed by providing services that assist cultivators, extractors and retailers. For example, Heliospectra – a Swedish company that specializes in providing commercial greenhouse growers and horticulture producers with LED lighting solutions – is profiting from cannabis before it fully hits the European market. Medical cannabis aside, the recreational segment is also blossoming and if industry analysts are correct, the European recreational cannabis market could eclipse other global markets by 2028.
How to Invest in the European Cannabis Industry
The competition regarding European cannabis investing is – for now – not as stiff as it is in Canada and the U.S.: the legal cannabis markets in these North American countries are much more well-established. For these reasons, among many others, stock market analysts, traders and investors should keep a close eye on the following pot stocks amidst the rise of Europe’s cannabis market:
The Yield Growth Corp.
On July 10, 2019, this vertically-integrated wellness asset growth company revealed that it has entered into an agreement with Melorganics to distribute Urban Juve products throughout Cyprus and Greece; making it a good stock to monitor for value appreciation.
A publicly-listed company in Canada since 2017, HEXO has come on leaps and bounds since its inception in 2013. The company recently announced its foray into the European cannabis market after receiving a medical cannabis installation license from the Greek government. With this license, HEXO MED can kickstart cultivation, processing and manufacturing operations in the Greek region of Thessaly.
ICC International Cannabis Corp
In December 2018, this cannabis company announced that it had expanded the land on which it cultivates plants. The company unveiled plans for the development of a 150,000 square-foot certified Greenfield cultivation, processing and manufacturing facility in Møldrup, Denmark.
The Danish facility will be capable of churning out 20 million grams of premium dried cannabis flower when operations commence fully.Cannvas MedTech Inc. – This cannabis company recently changed its ticker symbol and even its name.
Cannvas will now trade on the Canadian Securities Exchange under the ticker “EURO.” As part of its rebranding strategy, Cannvas wants to be known as “Eurolife Brands Inc.”, thus indicating its confidence in the European cannabis market.
This pot stock is one to watch, since the medical cannabis producer Freyherr is preparing to list in London. Freyherr is the British parent company of a number of medical cannabis firms based in Slovenia.
The company will use just over $2.5 million to establish standalone medical cannabis operations in southern Europe.Alternative Ways to Invest in Europe’s Cannabis MarketIf you aren’t a fan of the stock market and want to search for opportunities elsewhere, you’ll be pleased to know that there are numerous ways to capitalize on Europe’s cannabis market. Listed below are a handful of avenues that you can venture down if you want to get a slice of Europe’s pot pie:
Cultivation and/or Extraction
Industry analysts say that investors can make their safest bet by focusing on European cultivation and extraction facilities. Numerous facilities are cropping up throughout Europe, many of which are capable of cultivating the plant over large surface areas, as well as extracting high-quality cannabinoids from raw material.
Perhaps the best extraction options can be found in Italy, where cultivators are allowed to process hemp flowers for the creation of CBD isolate that can be sold in the EU B2B market. Since the cost of CBD isolate appears to have sunk over the past year, consumers won’t be as hesitant about buying extracted cannabis products from the European market.
You don’t have to touch the plant to profit from it. “Plant-touching” roles in the cannabis space include production, manufacturing, cultivation and product processing. Conversely, ancillary companies are tapping into the potential of cannabis investing from the sidelines.
What does this mean, you ask? It means that you could invest in the European cannabis market by dabbling in marketing, media, technologies, equipment, transport and security for “plant-touching” businesses. If you’re still pondering over the idea of cannabis stocks, consider investing in publicly-traded ancillary cannabis companies, such as security and compliance specialist Helix TCS, Inc. (OTC:HLIX) or testing/laboratory company Digipath Inc. (OTC:DIGP).
Consumer Packaged Goods (CPG)
Fancy creating a product that consumers truly love? If so, the European CBD-CPG market could be right up your street; particularly the hemp-derived CBD segment. Amidst the transition from illegal to legal cannabis sales in various European countries – inclusive of health, wellness and medical markets – the CBD-CPG market harbors long-term opportunity for growth. Since the non-psychoactive cannabinoid CBD possesses a plethora of uses in the mainstream market, CBD-infused products could potentially replace traditional everyday goods; the cannabinoid is a suitable ingredient for use in topical skin care products, beverages, edibles and vape products, to name a few.
Mass Consumer Markets
Not everybody is sitting on a mountain of cash that they can inject into the European cannabis market. However, if you are lucky enough to be financially blessed, why not go full steam ahead and target the mass consumer demographic?
Succeeding with mass production requires a strategic marketing technique, an approachable market, smart shipment options, thorough planning, and a range of products that can be continuously updated, e.g. technology/gadget upgrades and new/limited edition drink flavors that serve a broad market. Moreover, if you collaborate with world-recognizable brands, there’s nothing to say that you can’t become the next big dominant firm sprouting out of Europe!
The green, leafy plant that is cannabis has – in recent times – been acting as a catalyst for the pharmaceutical industry’s growth. In particular, CBD has been touted for its medical potential; the European CBD market is on-track to grow 400% within the next four years, based on a report by the Brightfield Group. On that note, keep an eye out for pharma-related cannabis investment opportunities, such as companies that produce/manufacture plant-based chemicals and synthetic chemicals, or companies that utilize equipment for cannabis-testing purposes.
Support for Cannabis Legalization in Europe is At An All-Time High
It seems that Europeans want to follow in the footsteps of North America, which has paved the way for legal pot and continues to do so. In 2019, North America’s cannabis market was valued at US$ 12.9 billion; equivalent to GBP £10.5 billion. With Europeans watching people across the pond gaining increased access to legal cannabis – while they wonder if their country will adopt similar laws – it was only a matter of time before support for cannabis legalization in Europe ignited.
A prime example is the Netherlands, which is without a doubt the most popular European tourist spot for cannabis connoisseurs; thanks to its relaxed drug laws. Based on the results of a poll conducted in 2016, an impressive 70% of Dutch residents supported the idea of cannabis legalization. The cannabis coffee shop scene unfurled across the Netherlands and, in particular, Amsterdam during the 1970s.
Over in Great Britain, twice as many British adults support legal weed, as opposed to those who don’t. This is based on the results of a Populus poll commissioned by the Centre for Medicinal Cannabis and Volteface. The poll also indicated that three in four (or more) people are willing to try cannabis with a doctor’s approval.
In Germany, approximately 72% of people aged above sixty are in favor of legalization; 37% of those people below the age of 30 supported cannabis legalization in Germany. The statistics were pulled from Research Institute Forsa, which also discovered that 34% of Germans believe that up to four ounces of adult-use cannabis should be available to purchase in licensed specialist stores.
Of the 44 countries that are snuggled within the European Union’s borders, only Switzerland presents its residents with the opportunity to participate in voter initiatives for cannabis legalization. Citizen-initiated ballot measures have led to legalization unfurling across 17 U.S. states. An additional 16 states have legalized the plant by means of legislative action; this has stimulated progress for Europe’s budding cannabis market, where regulations and laws pertaining to the plant’s use are still being straightened out. In February 2019, a non-binding vote was cast by the European Parliament to provide people living in the continent with better medicinal-grade cannabis access.
The vote triggered a bout of research into the plant’s health effects. In addition to this, Parliamentary members urged the European Commission to lift the barricades that are currently obstructing cultural, financial and regulatory progress in Europe’s cannabis industry.The year 2020 could mark a pivotal moment for legal pot in Europe, with cannabis industry analysts predicting that the grass could quite possibly be greener on the other side after all.
If the market estimates outlined in this article are anything to go by, investors ought to pay close attention. Plus, with reports of the WHO advising a rescheduling of cannabis and amending various facets of international drug treaties, there are plenty of signs pointing to the likelihood of legalization blooming – eventually – across Europe.
Written and published By Bethan Bee Rose In Weed World Magazine Issue 146