The legalization of cannabis for adult use in Europe is coming faster than you think

The legalization of cannabis for adult use is gathering pace on the American continent. On Wednesday, July 14, Senate Majority Leader Chuck Schumer released a bill which would legalize cannabis at the federal level in the United States.

At the beginning of the year, New York State joined the ever-increasing number of American states where cannabis for adult use is already totally legal. Last June, Mexico's Supreme Court ruled that the government was to legalize the recreational use of cannabis, This brings the country closer to becoming the world's largest legal adult-use cannabis market.

And Europe? It's lagging behind. For the moment, no EU country allows the legal production, marketing and consumption of cannabis for adult use. However, things are beginning to move on the Old Continent too.

Some governments are taking the first steps towards legislation authorizing cannabis consumption by adults (at least on an experimental basis). In June, two Portuguese political parties - the Left Bloc and the Liberal Initiative - voted in favor of the introduction of a cannabis law. have each put forward proposals for the legalization of cannabis for adults.

Seven potential candidates

At the end of the debate, it was agreed that both bills would be sent to the Health Committee for a 60-day period, during which public hearings could be held, amendments submitted and negotiations conducted before the decisive vote in Parliament.

Luxembourg, Switzerland and the Netherlands have all adopted regulations to kick-start the legalization process. In Switzerland and in the Netherlands, The new laws make it possible to launch pilot projects in which cannabis can be legally produced, imported and distributed to registered users.

These pilot projects are likely to be underway, with products available within one or two years. The two countries will thus be the first to authorize de facto a totally legal supply chain for cannabis for adult use.

If the legalization process goes ahead as planned, Portugal - along with other European countries such as Spain, the Netherlands and Luxembourg - will be the first country in the world to adopt the legalization process, Germany, Switzerland and Malta - could be well on the way to introducing legal access to cannabis for adult use in the next few years.

What will be the effects of legalization?

The potential effects of cannabis legalization in Europe are vast and far-reaching. From an economic, social, political and medical perspective, the opportunities created by legalization could be transformative. Let's take a look at some of them now.

A sales boom

First, let's look at the potential commercial impact of cannabis legalization in Europe. Put simply, the potential market for adult-use cannabis is huge. One in ten Europeans smoke cannabis every year, while a quarter of people admit to having used cannabis at least once in their lives. The annual turnover of the cannabis black market is estimated at around 11 billion euros.

It seems likely that many countries will focus on developing infrastructures for the domestic production of cannabis for adult use. This is the path being followed by Switzerland and the Netherlands, to enable stricter control of all stages of the supply chain and maximize tax revenues.

Although fragmented legislation may in some ways prevent the market from quickly reaching its full potential, the gradual legalization of cannabis for adult use will mark a significant turning point for the industry, and opportunities will flow from it. As The European Cannabis Report: 6th edition, Prohibition Partners forecasts that adult-use cannabis sales will reach 200 million euros by 2023, rising to 800 million euros by 2025.

To put these figures in context, when cannabis was legalized in Canada, the illicit cannabis market was worth 800 million euros. It took only two years for the legal cannabis industry to reach adulthood. to capture half the market share.

Product differentiation will be a natural consequence, as we have seen in the USA and Canada. There are many ways to consume cannabis for recreational purposes, many of which are currently made impossible by prohibition.

This diversification could lead to an increase in cannabis consumption more generally - after all, many people are put off by the illegality of the trade and the lack of alternatives to smoking flowers.

The drive to satisfy diverse consumer needs will involve a wide variety of sectors. The sectors most likely to play a role are consumer goods, food and healthcare. Profitable investment opportunities will be available to create a functional value chain from scratch.

A plethora of medicinal uses

The legalization of cannabis in Europe will not only create a new market, but will also have a significant impact on the medical side of the industry. The relationship between these two segments has always been controversial.

In the U.S., medical cannabis has sometimes served as the basis for broader arguments about legalizing cannabis for adult use. We've all seen the photos of medical practices in neighborhoods like Venice Beach offering quick cannabis prescriptions for a few dollars. This practice has helped to normalize cannabis consumption, while damaging the image of cannabis as a medicinal product.

The situation is very different in Europe, where cannabis for medical use and cannabis for adult use have remained largely separate. Cannabis is authorized in many countries for medical purposes, while recreational use is still stigmatized and largely left to the illicit market.

However, we can expect the legalization of cannabis for adult use to have an impact on the medical cannabis market in Europe. One likely effect is the increasing medicalization of these cannabis markets. Patients and doctors will increasingly move away from flower - still predominant in Europe - towards products such as extracts, edibles and more refined pharmaceuticals that align medical cannabis with more traditional medical practice.

This is a natural process, but also a necessary one for the evolution of the pharmaceutical cannabis industry. As more and more patients will be able to find satisfaction for their consumption needs elsewhere, medicinal cannabis will have to differentiate its offering. A similar trend can already be observed in a more mature market like Canada, where the opening of adult-use cannabis stores has led to a drop in the total number of registered patients.

Social and political transformation

Finally, it's almost certain that the legalization of recreational cannabis will lead to greater normalization and social acceptance of cannabis across Europe, fanning the flames of a market that is already set to grow exponentially over the next few years (Prohibition Partners predicts it will be worth over 3 billion euros by 2025).

As with all things, the social stigma attached to cannabis is largely due to its illegality, and has begun to disappear as countries move towards legalization.

It's also entirely possible that countries will begin to see the political and legislative benefits of legalization, leading other governments to follow suit. Countries that embark on the road to legalization are likely to feel the immense benefits of direct tax revenues and a significant reduction in pressure on the judicial system.

Colorado, a state with an economy the size of Norway, has sold 1.6 billion dollars worth of cannabis by 2020. This industry supports the creation of thousands of jobs and boosts the economy of many communities.

It's unlikely that legalization will completely transform the market all at once. It's far more likely that countries will gradually adopt a hybrid solution or implement new legislation in stages. But this is a story we've seen time and time again. When we reach a legislative tipping point, change comes thick and fast.

It may be that no European country will legalize recreational cannabis this calendar year, but the process is underway and it's hard to predict how fast things will move when they do. For anyone hoping to ride this wave, now may be the time to start preparing.