The Status of Legal Cannabis in Europe

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Europe has one of the world’s most developed joint legal, economic and commercial systems. However, its cascade of regulations and international commerce laws have managed to delay the foreseen explosion of legal cannabis in Europe.

Recent analysis by the international cannabis research firm Prohibition Partners, places the European cannabis industry at €115 billion by 2028, thus doubling projections for the entire US and Canadian markets for the same year.

Although almost 30 European nations already achieved some form of decriminalization, today’s situation is far from what most ‘cannapreneurs’ would dream of, with special obstacles set for foreign (i.e. US and Canadian) investors.

A Brief History of Cannabis in Europe

Cannabis is believed to have been introduced in Eastern Europe through nomadic tribes migrating from Persia and the Middle East over 3,500 years ago. This means that people in Europe where taking puffs even before the Trojan War. The plant then slowly spread along with migrations, crossing the entire continent and arriving in the British Isles by the hands of Viking invaders around the year 500.

For the past 1,500 years, people all across Europe have been using cannabis as a medical, spiritual and recreational drug, as well as benefiting from it as a source of natural fiber. Restriction laws arose during the 18th and 19th centuries, following a long era of prohibition that started to crumble in the 1970s. By this time, flexible policies began to appear in some Western European countries, like the Netherlands, where the international wave of legalization saw its prime, until the 90s. In recent years, more and more countries started opening up to decriminalization policies, making Europe the continent with the highest count of countries allowing some form of unpunished consumption.

Today’s Panorama

The mood amongst those seeking cannabis business opportunities in European countries is that of anticipation. The demand for legal cannabis products is clearly there, but parliamentary restrictions are keeping the gates of commerce almost shut. With the exception of the Netherlands, where cannabis is somewhat legal but not entirely, all countries in Europe that have allowed some kind of consumption, have done it in for medical purposes, with strong laws that require patients to get a doctor’s prescription and pick up their weed at a pharmacy, which is itself not allowed to display or advertise prescribed products of any kind, including any cannabis derivative.

Setting up a cross-border cannabis business operation in Europe can result in an ever harder ordeal than planning a cross-state operation in the US. In addition to complying with regulations from every country involved in the enterprise, producers and distributors must attain special certifications in order to qualify for a license, since cannabis is considered a pharmaceutical product.

US and Canadian companies wanting to export products into the European market have it even harder, since they are obliged to follow the rules set by the UN’s Single Convention on Narcotics and Dangerous Drugs, a treaty the regulates the international commerce of illegal drugs for medical purposes. The fact that cannabis is still federally illegal under US law, restricts American businesses from following the rules of the treaty. Canadian companies wanting to distribute their products in Europe even need to get special permits to sell pharmaceutical goods, and deal with a pharmaceutical wholesaler in order to get those products into the pharmacies.

Although signs indicating the future growth of the European cannabis market are clearly out there, that fact that each country has to set up its own legal system, makes it hard to estimate precisely when this boom will actually occur.

Germany

One of the most named players in the European cannabis game this year has been Germany. The country, known for its innovative nature and political influence, introduced a new medical cannabis legislation in March 2017, which allowed for the granting of eleven production licenses.

As of today, over 13,000 citizens hold medical marijuana licenses, a number that climbed from only 1,000 in the first year of the new law. Demand has risen so much that the government is currently evaluating candidates to grant special importing licenses.

Recreational consumption is still illegal but there is some tolerance for possession of small quantities in certain regions. Though there is an active community in favor of legalization, most signs point against recreational decriminalization within the next few years.

The Netherlands

The Dutch have one of the world’s most advanced legislation in regards of cannabis use, but in spite of most people’s perceptions, the country has not yet achieved full legalization, nor a consistent regulatory framework for personal use. Coffee shops in some regions are allowed to sell and house consumers, but supply is not regulated by the state, which forces coffee shops to obtain stock from the black market. Current efforts to regulate this situation are being made by Dutch regulatory bodies.

Medical cannabis has been legal in the country for over 15 years with a doctor’s prescription and is currently supplied by a single producer. Plans to open opportunities to other producers are on their way, but only a second producer will be allowed to enter the game.

Spain

Since cultivation and consumption for personal use are decriminalized in Spain, a new type of venue came about: The Cannabis Social Clubs. These clubs operate under the assumption that, if one person is allowed to have one plant, then a club with 50 members should be allowed to have 50 plants. The idea is not particularly welcomed by the authorities, but still, Cannabis clubs are flourishing, and house both rec users as well as medical, since legislation for medical consumption has not yet been developed.

Commercial production works in small quantities within the Social Club environment, but large-scale industry laws are yet to develop.

Italy

Medical cannabis has been legal in the Mediterranean country since 2013, yet production domestic production didn’t start until 2017, which forced the country to import its stock from the Netherlands for the first part of this period. A military monopoly was established in 2017, which allowed the army to be the sole producer and distributor. This year, as demand started exceeding local supply, new licenses emerged for importers to bring cannabis from abroad once again.

Cultivation and consumption of high CBD, low THC cannabis is legal, which has paved the way for the opening of several Cannabis Social Clubs in Italy as well, which are all legally regulated.

France and the Czech Republic

Both of these countries are major cannabis consumers, yet recreational sales are still banned nationwide. The Czech Republic has with some decriminalization policies for possession of small amounts, and France, though is one of the countries with the highest numbers of regular pot consumers, fines smokers on spot.

Both countries made cannabis legal for medical purposes with a doctor’s prescription in 2013.

Many other European countries like Portugal, Ireland, the UK, Poland, or Greece have had recent legislative improvements that could change their market dynamics, but have so far reflected negligible news in nationwide production, distribution and consumption, hardly accounting for any actual change, from a consumer’s perspective.

The list of countries set to change the current legislation and open up to some form of legalization is even larger and continues to grow. Still, more efforts have to be made if big change wants to be seen in the European landscape.

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