Europe will be the largest cannabis market within 5 years

According to the new report from Prohibition Partners, Europe, a market of 720 million consumers, will be the world's largest cannabis market within five years. It is estimated at 123 billion by 2028 under the guise of widespread legalization. As far as medical cannabis is concerned, the latter could well be induced by the European institutions which are currently discussing the question of.

An increasingly recognized industry

According to the report, the European cannabis industry has seen greater growth in the last 12 months than in the previous six years. More than 500 million euros have been invested in European companies, and six countries have made changes to their cannabis legislation.

Generally speaking, the Governments and legislators are increasingly supportive of the introduction of medical cannabis as it gains popularity with patients. «The European cannabis market is undergoing major transformations driven by exploding demand. This has led national governments across the continent to take action, and Europe is set to become a hotbed of development,» explains Stephen Murphy, co-founder of Prohibition Partners.

Nor are political decision-makers blind to the development of the industry, which has the capacity to significantly boost national economies by creating jobs and wealth throughout the production and distribution chain, as well as in ancillary industries. Recognition of the industry's economic potential among political circles acts as a virtuous circle, which in turn brings «visibility and credibility» to this emerging industry.

Besides, cannabic events in Europe. Following on from the recent Davos summit, political decision-makers, industry leaders and medical experts will be meeting in Paris for the Cannabis Europa. The report also highlights the contradictions in the French position: «France is emblematic of the hypocritical position displayed by Western European countries. The French government has maintained a conservative position on medical and recreational cannabis, despite the fact that France is one of the world's biggest cannabis consumers and hemp producers».

Number of cannabis users (in millions) by country

The place to be

Only theor the time being, Luxembourg plans to legalize recreational cannabis. (its use is also tolerated, to some extent, in the Netherlands and Spain). The development of the European market therefore mainly concerns medical cannabis. The three main European markets are Italy, the Netherlands and Germany. The Dutch market is the oldest, but the report predicts that it will be overtaken in terms of patients and value by the Italian and, above all, the German markets. It is currently worth 133 million euros and includes 130,000 patients, but it is estimated that these will double next year and that its value will exceed one billion by 2020.

Most countries that have authorized the medical use of cannabis are implementing domestic cultivation schemes to develop their domestic industry and avoid dependence on foreign imports. In Germany, cultivation licenses should be granted in June despite major delays and Italy, the government will open up production, currently managed by the army, to private companies.

The Mediterranean countries are also building up a production industry, taking advantage of their climate and workforce to attract foreign companies wishing to trade on the intra-European market. This is the case of Greece and Malta for example, which are in the process of granting licenses, or are about to do so. The economic dynamism that results from the creation of this industry could benefit countries that have particularly suffered from the crisis, such as Spain and Italy. Portugal states the report.

Business opportunities between now and 2028 and in the event of a regulated market

A long way to go

Stephen Murphy points out, however, that despite «the legalization of medical cannabis in a number of countries, very few have the infrastructure or regulations in place to supply patients effectively». With the exception of the Netherlands, all European countries that have legalized rely to some extent on foreign imports to meet patients' needs.

The report also stresses that more research is needed to better understand the effects of medical marijuana and effectively promote its legalization: «Although we know that cannabis can be effective in over 60 pathologies, we lack the clinical data needed to unveil the market's maximum potential. Reproducible and safe research will be vital to persuade conservative governments to initiate reforms».

So far, 14 European countries have legalized medical cannabis in one form or another, representing half of the 28-member European Union. For the time being, this patchwork of legalization is complicated for the industry, but it is likely that production and distribution standards will eventually be harmonized across the Union. Medical cannabis is currently being debated in the European Parliament and, if it decides to issue regulations in favor of medical cannabis, this could force reluctant states to take action.

Countries where medical cannabis is legal in Europe