As detailed in the latest European Cannabis Report, 2020 was a significant year for medical cannabis in Europe in terms of patient access and regulatory and commercial progress. Despite the delays caused by COVID-19, Prohibition Partners estimate that 60,000 patients accessed medical cannabis on the continent for the first time during the year, bringing the total number of active patients to 185,000.
- Prohibition Partners estimate that the European cannabis market will be worth €403.4 million by the end of 2021 and will grow at a compound annual growth rate (CAGR) of 67.4% from 2021 to reach €3.2 billion by 2025.
- By the end of the forecast period, we expect several nations to introduce legal access to adult-use cannabis including the Netherlands, Switzerland, Germany and others. These sales could be worth over €500 million by 2025.
- Germany will constitute over half of the European market until 2024 and will be worth over €840 million by the end of the forecast period. By 2025, large countries like France and the UK will have developed their patient access considerably and will represent a significant share of the European market.
Key Events Driving the Industry Forward
The liberalisation of cannabis is accelerating in Europe, and the final quarter of 2020, in particular, saw several important developments. In November, the European Court of Justice ruled that CBD is not to be considered a narcotic substance under EU Law, paving the way for the future CBD markets. Just weeks later, the UN finally recognised the medical potential of cannabis by removing the plant and its derivatives from Schedule IV of the Single Convention on Narcotic Drugs, with all EU nations voting in favour of the motion, bar Hungary.
With legislation now progressing rapidly, 2021 has already brought good tidings for the cannabis industry in Europe. The first patients have received treatment under France’s pilot medical programme. Switzerland has adopted new regulations regarding medical cannabis which has allowed for easier access by patients, and it will legalise the sale of adult-use cannabis under pilot programmes by 15 May 2021. . Portugal recently approved its first medical cannabis product for marketing.
The first quarter of 2021 has also seen massive developments in the commercial side of the industry in Europe. Jazz Pharmaceuticals has agreed to acquire UK-based GW Pharmaceuticals for just under €6 billion. Curaleaf, one of the largest cannabis companies in the world is acquiring European operator EMMAC for €288 million. The London Stock Exchange has opened to medical cannabis companies and several have already listed, opening the way for large flows of capital.
These are just a few of the major events in the European market; covered in more detail in the European Cannabis Report: 6th Edition.
Impact of COVID-19
The pandemic caused a slew of disruptions to the medical cannabis supply chain in Europe, and laid bare some of its vulnerabilities. In the Netherlands, delays to cannabis exports from the Office of Medical Cannabis to other European countries were seen during the Summer of 2020. In Ireland and the UK, special arrangements were necessarily put in place by the Departments of Health so that patients could receive their cannabis medication by post from the Netherlands in order to minimise travel. In Spain, the closing of cannabis clubs across cities such as Barcelona meant that patients who were already sourcing their medicine from a legally ‘grey’ supply chain, had to revert to the black market to obtain their medicines.
The pandemic precipitated a steep decline in global stock markets. At the lowest point, the Vanguard Total Stock Market Index, which can be used as a proxy for the general market, saw a 30% reduction in share prices as compared to 1 January 2020 levels, and took ~six months to recover from the blow. Cannabis stocks took an even larger hit, as proxied by the Alternative Harvest ETF, with more than a 40% drop which took the market nine months to recover from. Since the beginning of the pandemic, the markets have recovered to pre-2020 levels. As reported by Prohibition Partners midway through 2020, cannabis stocks have shown signs of stronger recovery than the market average. This has been supported by major events such as the progress of decriminalisation bills in the US, the democratic victory in the US and the UN vote on reclassifying cannabis under international law.
COVID-19 stalled some progress of cannabis access and reform across Europe. In Germany, the introduction of domestically produced cannabis has been delayed due to the ‘persistent consequences’ of COVID-19. In France, the trial for medical cannabis access did not begin in 2020 as planned but was pushed into early 2021. Regulatory agencies in the UK, Denmark and Germany have scaled back the resources they are putting into inspecting and approving new facilities, which may cause delays to the development of the supply chain for the coming quarters.
The Patients and Products
The European Cannabis Report: 6th Edition contains the most in-depth consideration of the medical cannabis market in Europe to date, specifically in terms of who the patients are and what products they are using. For example, we show how ‘pain’ is the central condition for prescriptions across the board, mirroring the trends seen in North America.
Source: Atalis, various government agencies and scientific papers
Beyond the medical conditions, the report provides an overview of the demographics and gender balance of patients in Europe, and contrasts this with more developed markets in North America. The report also considers which products are most popular on the continent and how this could change over the coming years.
As the patient access to medical cannabis advances across Europe, so too do the opportunities for businesses to embed themselves in niches of the value chain; before the market becomes more established. The European Cannabis Report: 6th Edition is designed to support businesses in doing so, along with the conferences offered by Prohibition Partners Live as well as our consulting services for cannabis and psychedelic ventures.
The European Cannabis Report: 6th Edition takes a deep dive on the current social, economic, regulatory and health trends including:
- The progress of medical cannabis access in Europe
- The progress of adult-use initiatives
- The opening of European capital markets to cannabis
- The impact of COVID-19 on patient access and the industry at large
- The patients in Europe and the products they are using
- The trends in product formulation towards extracts and isolates
- The diversification of the supply chain in Europe
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