As of March 2, right before the UN punted on reclassification of cannabis at the international level for another nine months, the UK government eased import restrictions for people in search of the drug.
Specifically, licensed wholesalers will now be able to import larger quantities of cannabis-based products and hold supplies for future use by patients with prescriptions.
Previous restrictions meant that patients had to wait for weeks or months to obtain the still highly expensive drugs (an import license from Canada can take 8 weeks).
Essentially, while welcome, this also means that every single potential cannabis patient who does not suffer from epilepsy or MS must import, via private means, a drug that is still unbelievably expensive. Those with the means are subjected to high prices and bureaucratic complications (like a regular thirty-day review of the prescription).
Cynical Cannabis Moves
While those who can afford to pay approximately $1,000 a month now have options, this is not exactly cannabis reform that is inclusive. Indeed, the entire conversation appears to be about making sure that private companies make profits rather than scientific advancement.
While the government is planning to engage with patients and to participate in trials to figure out how the NHS can utilize the drug, this is little help for sick patients now. Particularly in the middle of a global pandemic and almost as surely, global recession.
Soundbites by government ministers are also putting a cheery face on a situation that is dire, not just because of access but because of cost.
Per British Health and Social Care Secretary Matt Hancock, “We still have a long way to go. We need more research into the quality and safety of these medicines, and to do all we can to cut down the costs and remove barriers so that, when appropriate, patients can access it, including on the NHS.”
As recent events, including not only Brexit and cannabis reform, but indeed the now global pandemic have proven, healthcare systems globally are not up to the kinds of threats now thrown in their direction. Designed mostly after WWII, with a far different tax and economic base to support them, as well as far different demographics, most are also clearly not up to the rigors of the 21st century.
It is not just the supply chains for cannabis or even pharmaceuticals that are in the mix of course. Food security in the UK is now also, according to one international expert, Tim Lang, World Health Organization advisor, “in serious trouble.”
The Covid-19 pandemic, in other words, caught the world with its pants down, despite numerous warnings and even models predicting almost exactly this situation as recently as last year. Just like the AIDS crisis. This time, however, there are options available.
The question is, will governments and international organizations rise to the challenge to meet them?
A New World Drug Order
The British, while behind the Germans, are unfortunately, delaying a decision which has been already extended for too long. Relaxing drug import rules are one thing. But recommendations about the uses of the drug are still very narrow in the UK (even more stringent than in Germany).
Beyond that, overall food and drug security (supply chain) issues are in the room and for drugs far from cannabis. As many have begun to point out, cannabis is now prescribed for patients (and in many countries) and these patients are the most vulnerable to a virus like Covid-19. They are vulnerable not just because their immune systems are weak, but frequently because they are also economically exposed.
As the world battles another retrovirus pandemic, perhaps it is time that the lessons of the past be learned by those with the power to make decisions that will ultimately affect billions of people globally.
The recent decision in Germany on the reclassification of CBD (kudos to the European Industrial Hemp Association) as something other than “novel” has now opened an interesting new discussion in Germany and by extension, Europe.
It basically means that hemp plants, if they are European in origin, can be grown (under the right regulatory structure starting with organic) and even extracted without ever being considered a “novel food.”
Look for (hopefully) similar discussions now across Europe and the UK where the Food Safety Authority is also examining similar policies.
What this ultimately means, however, is that the market is clearly opening on the CBD front, but only for products that make the grade.
What should the average producer or manufacturer from North America think about when setting up a supply chain for export?
Thanks to the new treaties in place between the United States, Canada and Europe right now, there are market openings in the cannabis industry in Europe. Starting with the fact that the cannabis bug has clearly hit the continent, but there is actually not enough regulated product to be found yet and just about anywhere.
This is keeping prices high right now, but do not expect that to last.
Regardless, pricing of imports will not be like anything you have experienced if your background is state or even national market in the U.S. or Canada. There are higher regulations in every direction in Europe. Understanding how to translate the same into equivalencies that do not bankrupt you, overprice your products, or worse, get you in trouble with authorities is a critical first step, and not one to be taken lightly.
Get professional guidance from the country you are hoping to export to, at minimum. And that includes the legal kind. Every step of the way, you have to be certified with, at minimum, federal if not at an international certification.
No matter what cannabinoid is in the mix, this is ultimately a plant-based product. All rules one would normally think about when talking about other food products (for starters) are in the room.
While it is far from “this easy” (although thanks to the USDA’s decision about hemp, not to mention the FDA update on its own deliberations, there are now federal standards), think about the problem this way: If you were the world’s best chocolate bar, or even tomato juice, how would you hit Europe right now?
They have tomatoes here, and unbelievably great chocolate already. What is it about your offering that can stand out? This is the million-dollar question. There are a few people and companies doing this right now, but it takes experience, and understanding the multiple regulatory guidelines involved. Once you figure that out, then you need to look at your supply chain, piece by piece and literally from the plant through end production for where you fit, and where you might not, into the regulatory discussion and market you hope to enter.
The Medical Discussion
There is now the possibility of exporting medical grade hemp and hemp extracts from the United States to Europe. However, everything must be GMP-certified to a medical standard, from organic production on up. This is an international standard, not an American one.
That qualification does not exist much in the cannabis industry in the United States (although ISO very much is) yet. Although it is dawning. On the Canadian side, there are plenty of companies in the discussion, because there is already a beaten path to export.
As the German cultivation bid proved, European certification, certainly is a high barrier to reach. Indeed, it is not only GMP certification in the room on the medical side but also rules about the import of all plant products.
From this perspective, it is also easier to import “finished” product rather than plant.
The Recreational Discussion
Before anyone gets too excited about recreational reform, the reality is that Europe is not going to step ahead of the UN (which has now pushed its next deliberation on the topic to the end of 2020). Yes, there are trials in a couple of places, but far from earth-shaking (recreational trials in the land of the coffee shop anyone?)
More interesting, of course, is what has just happened on the CBD side. But before American hemp farmers get too excited about this, they have hemp and farmers in Europe. And quite a few people have seen the light on this one already.
Sure New York state exports to Europe are probably in the offing, but so are hemp exports from the Southern states where the weather is warmer and the labor cheaper.
Certified labs, processing and extraction, and labelling are all in the mix. And every step must be documented as you go.
How to Proceed?
Whatever your crop or product is, take stock of the certifications you have now. If your plant was not organic, forget export anywhere. You are out of the international game.
However, with this taken care of, look at the certification requirements in Europe for extraction, processing and import of food and plant products and obtain production partners with the same – either in the US or abroad.
With luck, patience, skill and knowledge, yes, the doors are slowing opening, even to U.S.-based cannabis trade of the international kind.
Just don’t expect it to be easy, and leave lots of time for workarounds, pivots and even re-engineering at every point of the way.
HMS Great Britain has now set forth from its European home port for another intriguing and very British escapade on the high seas.
So far the jury is out.
It could be the beginning of the next British Golden Age, Spanish Armada and all that. Or could it could end up (more likely) somewhere up the Khyber Pass (a sordid misadventure of British Imperialism that did not go well in the 19th century with global implications still reverberating to this day). For Netflix fans of The Crown, think “Suez Crisis” as a more recent and apt analogy. Starting with as much as a 6.7% reduction in domestic GDP already on the horizon.
Snarky historical analogies and nostalgia aside, how will Brexit influence and shape a global cannabis industry, starting at home?
The UK Is Not Actually in Regulatory Free Fall
The first thing to realize is that most of the puffery around Brexit was that with the exception of labor conditions, there is little free choice in the world of trade anymore. The players who get export and import licenses, for anything, have to conform to basic equivalency rules, no matter what they are called.
This applies to cannabis in a big way. No matter how the UK market develops domestically in other words, and that is a separate discussion.
Currently, shamefully, the domestic medical guidelines for prescription of cannabis exclude chronic pain patients and a few other obvious groups. The NHS medical market in other words, is a monopoly, set up by the current and previous governments, mainly serving GW Pharmaceutical patients who qualify for Sativex and Epidiolex. Not to mention company shareholders.
Everyone else, including those for whom these drugs do not work well, or work less well than other alternatives, are left in an international trade negotiation in their living rooms as they and or their children suffer.
The import barriers for cannabis – both from Europe and from Canada are absolutely in the room and in a very personal way for the British right now.
How they actually define cannabis, will also clarify. This will be driven now by the UK’s biggest import partners – namely Europe, the United States and Canada (although South Africa and Australia of course, will always be in the picture).
Which regulatory scheme the UK adapts, including for cannabis and of both the THC and CBD variety (not to mention other cannabinoids), in other words, will at minimum have to be broadly equivalent with all of the above. Not the other way around. No matter how much the Food Standards Agency (FSA) wants to fuss and fiddle with “Novel Food.” That alone is a canard.
Cannabis is a plant. It is time to start acting like that. And it is no more “novel” than tomatoes in many, easy-to-understand environments, including commercial ones. Not to mention will increasingly be regulated like commercial food crops – even if those crops are then also bound for dual purpose medical use.
The regulators will eventually get there – but not without a lot of tortuous twists and turns.
A “New” Market? Not So Much…
There is a lot of consultant palaver and baloney in the room right now. There is no more a new market in the UK as there was in Germany (or Canada or Colorado). Local producers are already organizing, and on the hemp front. The big ones are hip to regulations and are getting certified to enter it. Everyone else is being left on the dangerous sharp end of police raids, even with prior local approvals.
That said, foreign producers are of course looking at the UK right now, and in a big way. The lock GW Pharmaceuticals has on the domestic market will not hold long. European producers are absolutely in the room (starting with Tilray in Portugal and Alcaliber in Spain). Not to mention what is going on in other places right now, even if of less well-known corporate branding.
Every big Canadian company is already in the room in the UK, and many Americans are now beginning to show up in the market.
However, for the most part, such ventures are doomed outside of conference sponsorships until the regulatory questions are answered if not met.
And that includes federal certifications that are easy to find – there is no one single authority that handles cannabis internationally. And there never will be. Supply chains are already global.
A Perfect Export Market
One of the biggest, so far widely discussed questions is who in Europe will start exporting to the UK (forget Holland for the moment). Not to mention producers in Spain, Greece, Poland if not Macedonia. That conversation is also on the table now. For the first time, so is Germany, and on the medical side.
Pharmaceutical producers in particular who meet international pharma standards may be the best hope yet – although right now policy makers are still looking at cars rather than cannabis to help keep Germany’s trade export quota where it feels “comfortable” domestically.
That too will change. And fairly quickly. See Greece, if not South Africa.
The political roil of branding and politics afoot in Germany right now makes this new kind of export market idea as a part of economic development, an inevitability.
Not to mention, at least for the present, a reverse trade in regulated British CBD products – if producers are smart about regulations – throughout the continent right now.
Of all countries, outside Switzerland, the UK has the ability to develop a broad and intriguing market in the EU – but only if they are compliant with regulations in Europe.
And this is where the policy makers in Parliament and 10 Downing Street have already misjudged if not broadly misled, not in a regulatory environment of their own, but in fact in a diplomatic “room” where the rules are already set via international standards and certifications, not to mention treaties.
It is obviously not just at conferences but now on the ground in Germany and across Europe that Americans are heading to the industry here. And it is not just the “new” cultivation guys at Demecan in Berlin (currently hiring), or in Guernsey, but in truth, throughout the industry.
Wish you were here? Here is the broad skinny to actually getting (and keeping) a job in the industry in Europe.
Get A Job Before You Come
By far, the easiest and safest way to come to a new country, like Germany (or the UK for that matter) is to have pre-arranged employment. That is also beginning to happen, as large companies set up grow and manufacturing facilities throughout Europe. That said, these are hard to come by (there are many Germans and other natives vying for the same jobs). However so far, certain kinds of experience in the U.S. (or Canada) beats anything that has gotten going here so far from the cultivation side and many other aspects of the biz.
But – and this is a big one – you have to have the kind of experience that counts. Regulated industry participation is a must on your CV if this is your preferred route of travel. Pharmacists in particular, could have a fascinating career path here not open in the United States at all yet. So will doctors – but that certification has to be earned here to practice.
It is also far easier to deal with the paperwork that is required than it used to be ironically – in that there are new qualifications being set out for the same in both the UK and Germany at the moment. Understanding them, however is another matter, and interpretation at the immigration office is not something you want to sign yourself up for. In any language.
However, immigration law is just the beginning on the regulation front. Regulations across the cannabis industry are also changing fast – and not just under the heading “cannabis.”
Nothing, really is “easy” about being an expat. You have to want to do this.
There are now starting to be numerous European job postings in the industry on Linked In. It is a great place to start. Having B1 Deutsch (third level, very hard to pass, intensive German language certification) is usually a must for employment (not to mention getting around in the country).
Disclosure: This journalist failed A1 German in Germany (introductory level) twice. Starting from scratch is not recommended, because the rest of your class (usually with previous German training) will kick your butt in numbers bingo by the end of the first week. Learning – including punctuation and spelling 50 new vocabulary words a week is pretty standard. And that is before the grammar. All taught in German too! Four hours a day, five days a week.
Yes, your class will laugh at you, even if they think you are otherwise cool as a North American.
It also helps if you have taken at least one German language course (as in college semester level) before you come. Otherwise you will hit unbelievably intimidating compound words that take up a great deal of space on a page and four different tenses that even native Germans do not really understand by the end of the second week (and it is mind-blowing). You learn to appreciate Mark Twain’s humour about the dratted language very quickly, not to mention that the umlaut is really the only thing you have any freedom of expression with.
Be prepared to sign up for language courses when you land with the local VHS (Volkshochschule) – which is sort of like German community college for anything you want to take classes in. It is also the cheapest deal on language courses around. The private ones are pricey.
That said, master the lingo, even passably, and Germans are super pleased about the same. No matter how badly you mangle the language, they are just happy to hear you try.
Student Visas and the Educational Path
By far, the easiest path to starting your journey overseas, is luck. The second one however, is actually one way to go if you are prepared to work yourself to the bone, and do it while learning German intensively. Plus get a university level or graduate degree along the way.
If Cannabis Europe is your dream job and vocation, you will make it happen. Just don’t expect it to be easy, or just like anywhere else.Go first as a language student. That gets you two years, fairly easily, as long as you have €8k in your bank account at all times, and do not work at a German job. That is verboten. However, as an American, particularly in Germany, you still have the right to come here and learn.
There is also about to be a fairly ground-breaking immigration law that comes into effect as of March in Germany that allows highly skilled foreigners to earn their way to citizenship. There is a list of requirements that go along with this, of course. The path to being able to stay includes getting a higher German degree or special German training. Expect pretty much the same thing from post-Brexit Britain too – just in the same language.
You also have to have health insurance and a lot of other things taken care of. It is not a sudden move or jump. For all the amazing things that come with this, also be prepared to think about looking in the mirror at least a few times and thinking “am I stupid, what on earth have I done?”
Then there is location. A Kreuzburg address may impress the folks back home, but those are not cheap these days, and extremely hard to come by. Rent, in general, and not just in Berlin, is beginning to be a real issue in every German city. Finding an accommodation that you can afford in “starting out” circumstances – is not easy right now anywhere.
But it’s not just about rent or the buzz you might have heard. Don’t just put Berlin on the map (or even Munich, also a growing professional scene). Both cities are far from the center of the cannabis scene in Europe, much less Germany although there is a lot going on all the time there. Dortmund, and the Ruhrgebeit in the former “Rust Belt” of Germany are much cheaper, full of students, and popping with cannabis reform all over. Cologne is also a very interesting city right now. So are Bremen and Stuttgart.
The Differences Are Large Besides the Language
No matter what you think you can expect, the only thing you can rely on is that just about everything will not be the same. Yes, German beer fests and bratwurst are comfortingly familiar to be accepted easily. But when it comes to really immersing yourself in a country well enough to think of it as “home”, let alone understanding the vagaries of this business in particular? Just about everything is different. This ain’t Kansas, (or Colorado, for that matter) Dorothy.
Bottom line? If Cannabis Europe is your dream job and vocation, you will make it happen. Just don’t expect it to be easy, or just like anywhere else.
Europe continues to be the new frontier of medical and wellness developments in the cannabis industry, with various sources predicting that Europe will become the world’s largest legal cannabis market over the next 5 years. Key related statistics, include:
A population of over 740 million (over double US and Canada combined)
Total cannabis market estimated to be worth up to €123 billion by 2028 (€58bn medical cannabis (47%), €65bn recreational cannabis (53%))
Over €500 million has been invested in European cannabis businesses (including significant expenditure in research and development, manufacturing and distribution)
To reiterate this belief, this month, hundreds of industry experts and delegates will be attending Cannabis Europa in Madrid, to discuss the expansion of cannabis across Europe and the challenges facing the industry across the member states of the EU and the UK.
Global mainstream leans to European strength
Since late 2018, major global operators have made substantial moves into the cannabis sector. Anheuser-Busch InBev, the world’s largest beer company and maker of Budweiser, entered into a partnership to research beverages infused with two types of cannabis. Constellation, owner of Corona beer, announced a commitment for $4 billion investment in Canadian cannabis company Canopy Growth. BlackRock Inc, through five actively managed BlackRock funds, has invested into Curaleaf Holdings Inc, a dispensary operator, for a not too insignificant investment sum of $11 million (as at March 2019). Such international investments prove that cannabis has moved from the fringes and into the mainstream.
When considering the impact of mainstream cannabis, it should be recognised that major European countries have approved or are planning on implementing, legalisation of medicinal cannabis. The UK, Germany, Italy and the Netherlands already have legal systems in place for medicinal cannabis and France and Spain are currently reviewing key legislative reform to align themselves with international practices. At present the German market is the third largest cannabis market (in terms of size) behind the US and Canada.
In addition to medicinal cannabis, several key European countries have systems in place, or are developing systems, or considering the reform of existing systems, to approve cannabis with THC content at a recreational level. The Netherlands already has a system and Luxembourg’s health minister in August 2019 announced the intention to legalise cannabis for Luxembourg residents. The Luxembourg government is lobbying EU member states to follow suit.
Whilst the EU has a labyrinth of laws in relation to edible CBD (as a novel food) which make the regulatory landscape complex, there has been an explosion of CBD products for vaping and cosmetics. Of course, with each of these products being subject to different local laws (some aligned between EU members states) in relation to vaping and cosmetic related regulations. The Brightfield Group has predicted a 400% increase in the European CBD market (including vaping liquid) from $318m in 2018 to $1.7 billion by 2023. There is also an expansion into applications for CBD with animals with many US manufacturers of CBD-infused pet food.
The European Parliament’s health committee has been calling for properly funded scientific research and there are motions to establish policies to seek to incentivise member states to advance the studies of medical cannabis, with a priority on scientific research and clinical studies – the first step necessary to drafting legislation, designed to better support the industry.
Where does the UK sit within cannabis?
Medicinal cannabis famously saw a legalisation, of sorts, by the then Secretary of State, Sajid Javid, who provided the authorisations for prescriptions for the high profile cases of Billy Caldwell and Alfie Dingley. Subsequently, on 1 November 2018, this was codified into law by an amendment to Schedule 2 of the 2001 Misuse of Drugs Regulations. This allows clinicians to prescribe cannabis as an unlicensed medicine.
There have, of course, been some high profile licensed medicines. The UK company, GW Pharmaceuticals, is the largest exporter of legal medical cannabis in the world, cultivating medical cannabis for production of cannabis-based medicines (e.g. Epidiolex & Sativex). Epidiolex (manufactured by subsidiary Greenwich Biosciences) became the first cannabis-derived medicine approved for use in the US for treatment of seizures caused by Lennox-Gastaut and Dravet syndromes (both severe forms of epilepsy).
When considering the level of research development and investment in the medicinal field, it is no surprise that the UK is the world’s largest producer and exporter of medical cannabis. Research published by the International Narcotics Control Board indicates that the UK produces over 100,000kg a year of medicinal cannabis.
Previous guidance from the National Institute for Health and Care Excellence (NICE) indicated that further research is required to demonstrate the benefit of medicinal cannabis, citing its cost versus evidenced benefit. However, there is now renewed confidence in the UK following NICE’s approval of two cannabis-based medicines produced by GW Pharmaceuticals, Epidiolex (cannabidiol) oral solution and Sativex (nabiximols), for routine reimbursement through the NHS.
Following the re-categorisation of medicinal cannabis in November 2018, a number of clinics have been established where specialised clinicians can start the process of prescribing cannabis based medicinal products (CBMPs). Whilst this route is not fast, and challenges are well documented as to the satisfaction of prescriptions made in the UK, there is momentum behind the development of this as a means for providing genuine and established medical care. A significant step in October 2019, was the CQC registration of one such cannabis clinic, Sapphire Medical Clinics Limited.
The UK medicinal cannabis sector is establishing a research-based approach to expand usage in the UK and across Europe.
How North America compares to Europe
Canada, as a first mover within the cannabis sector, has a multitude of large companies which are well-capitalised and have substantial international footprints. The Canadian exchanges have large listed companies looking to Europe with the intention of acquiring or investing into European operations. As of the date of writing, the 10 largest cannabis companies in Canada have an aggregate market cap of over $23.5 billion (and all registered cannabis companies in Canada having an aggregate market cap of over $46.5 billion).
Listed companies have had a tough time over the last 6-12 months with a slowdown in the market as a natural re-balancing occurs – part of which is due to rapid expansion and heavy investment into cultivation by all the major participants in the market. Over the next 6 -12 months we can expect to see management changes (some of which will be voluntary and some of which will be imposed by institutional pressure) to introduce different skill sets at board and senior management level to facilitate the oversight and leadership necessary for large pharmaceutical companies. Many operations have expanded into highly regulated products and complex supply chains whilst still operating with fundamentally the same team that established the operations with entrepreneurial efforts but, perhaps, a lack of experience in these sectors. The recent announcements by Aurora Cannabis and Tilray demonstrate that these restructurings and costs reductions have already commenced. However, with increased experience at board level and an improvement of profitability focused on sustainable business practices, should come new opportunities on a global scale for these North American operations.
The US market, because of the complexity of state and federal laws not being fully aligned, is closer to its infancy than the Canadian market. This is not too dissimilar to the European market. That said, there are a number of well-funded and quite large US enterprises. A limited number of these, such as Tilray, are looking to expand into Europe.
Many of the companies in the US have, and continue to, expand quickly so we can expect to see a number of mergers and acquisitions. We are likely to witness Canadian and US entities merging with one another with the potential for acquisitions for operations within Europe. It is unlikely that the North American companies will risk their capital through organic growth so would be expected to be identifying “turnkey” solutions.
One of the major challenges facing US companies is the complexity of supply and distribution. This is largely a result of the complexities for state and federal laws interacting with one another as well as international importation and exportation with US states.
How you can invest within the UK and Europe
Developments in the fields of research and development are anticipated to add further weight to the lobbying of government and regulatory bodies across Europe.The UK remains, despite the events of Brexit, a major financial hub for Europe. The London market has seen the growth of several investment and operation cannabis companies. This includes private companies such as; EMMAC Life Sciences Limited and the operations formerly trading as European Cannabis Holdings (now demerged into several new entities including NOBL and LYPHE) as well as publicly listed companies; including Sativa Group PLC (the first publically listed cannabis specific company in the UK) and World High Life Plc, both operating on the NEX Exchange.
The Medical Cannabis and Wellness Ucits ETF (CBDX), Europe’s first medical cannabis ETF fund, domiciled in Ireland, and which has been passported for sale in the UK and Italy, has also caused a renewed stir within the market with a further platform for listed investment.
As the regulatory framework evolves further there is an anticipation that more medicinal cannabis and CBD related enterprises should have the opportunity to list on public exchanges, whether in the UK or in European countries.
Despite a period of slow down following the natural rebalancing of the fast-growing North American markets for the cannabis sector, there is renewed confidence in the expansion of the industry. Developments in the fields of research and development are anticipated to add further weight to the lobbying of government and regulatory bodies across Europe.
There is an increased push for a public dialogue and consultation in relation to medicinal and recreational cannabis in the UK, backed by several mainstream media platforms. This is likely to be shaped in some parts by national debates in Luxembourg and other European countries as they consider their own domestic laws.
With European parliaments across the EU (including the UK) hopefully having time freed up to discuss other political matters now that Brexit is progressing, the next 18 months should prove an exciting time within the European cannabis sector.
If you were at Davos this year, you heard alot about CBD. The cannabinoid will again be a headliner in business analysis and bottom line reports this year. But as the market matures, globally, what is the real temperature of the industry? And how fast will regional hiccups resolve?
Regulatory Issues Are In The Room
From the US state markets to the EU, hemp is coming into its own, even though almost everyone also refers to it as CBD (cannabidiol).
In the United States, things are even more murky because of a lack of federal reform and the individual rules and regs of existing state markets. To an extent, the market is being “federalized” on the testing front (see ISO for example) and GMP (at the federal pharmaceutical level), producers are beginning to be able to get certified on a global scale. However, the vast majority of the U.S. market is not anywhere close to the regulatory muster now required of even the most-humble commercial hemp farmer anywhere in the EU.
In Europe, the entire cannabis discussion is already far more defined, and as a result, very much likely to set the rulebook globally, especially as so many people want to import here. And this is going to be a bugbear for the next two years. The rules on EU Bio for starters, are still in flux. And where this ties into GMP downstream, those who brave such waters are in for choppy seas for the time being.
Tie this into Novel Food, and this is an area right now that should only be charted by the most experienced navigators, and not just using the stars.
The Battle Is On – Both On The High Seas And The High Streets
For all the desire to bring “whole plant” into the room, (in other words recreational cannabis and medical cannabis with the THC still attached), CBD fever at least has spread in Europe faster than any pending flu epidemic from China.
There are positives and negatives that come with this discussion. Namely, the ever pounding need to commercialize the legal industry and remove all Drug War stigma and barriers from the discussion.
CBD-only legalization is also a powerful answer to those who claim that if CBD is legit, then the police will not chance busting people, no matter how much THC is or is not in the offending substance in question.
These are also the same people frequently who also have a stake in some level of the industry as it legalizes. And this is also where some of the fiercest battles for regulatory control and definition have also begun to happen.
Where they have come to a head (see Italy), it appears that governments are indeed reconsidering the whole “insurance” if not “home grow” discussion. Not to mention, as a result, recreational after that. The conversation in Italy, of all places, right now, is a good indication of this trend. It is a conservative country in every way, yet it is the first to not only cancel a government controlled monopoly license, but also the largest country in Europe to again tinker with limited home grow of cannabis plants.
Ironically this is also the place where the most dedicated “CBD revolutionaries” have also hit. In places like the UK right now, the lack of appetite for EU regulatory control generally (see Brexit) has resonated, particularly with a pro cannabis crowd sick and tired of more delay on a topic whose day in the sun has finally come. If not more government wobbles on discussion on the medical side (see the recent NHS decision to ignore cannabinoids and chronic pain).
In other places like Europe however, and this certainly showed up at Davos, CBD is a hardy foot soldier if not cannaguerilla from the hills that is beginning to chalk up discussions if not yet wide-ranging sovereign victories.
This is absolutely clear to see in places like the African market (and Lesotho is about to become a hot ticket globally if not within the African continent). Indeed, the first seeds were sown several years ago).
Yes, it is ridiculous that CBD is being banned. And it is also obvious that governments are unwilling to be bankrupted over medical cannabis of any kind or THC concentration, and know they must also seek other ways to deal with the issue.
CBD, in other words, is a kind of Che Guevara that is going to take down a few of the established orders in this revolution that is now global. And for that very reason, taking on a character if not place at the table all of its own.
Cannabis as a news story and an industry moved forward again this year, albeit in a rather more halting way than the last few. The volatility of the market in fact was one of the largest stories of the year, particularly after the events of this summer.
It’s Been A Wild Ride Kind Of Year
This time last year, the world was in a tizzy over the literally billions of bucks invested into a few top Canadian cannabis companies. This year, predictions are definitely a little more sober when it comes to the future of cannabis stocks. Most of the industry has taken a major beating this fall.
That said, the current correction was in the cards for just as long. What goes up, dramatically, must come down.
That said, this is not the whole picture of the industry – not by a long shot. Reform ain’t going back. Patient numbers are climbing, albeit slowly.
Here in Europe, the first and so far biggest public tender on cannabis was finally concluded in Germany with Aurora, Aphria and the cannabis company formerly known as Wayland (ICC) winning the bid lots for domestic cultivation this spring.
The British, who waffled around all year on what kind of “animal” cannabis actually is, celebrated that anniversary late in the year with a highly limited scope of coverage by the NHS.
The most interesting discussions right now are clearly emerging on the international front. Cannabis became an internationally mainstreaming commodity this year as patient numbers began to climb on the continent.
This in turn has led to the normalization of the idea at least of an export trade in cannabis not only across Europe but globally as companies target the region. Cross border cannabis companies, in other words, are a “thing” that blossomed this year – and frequently, while sometimes financed by Canadians, called another country home.
The announcement of at least the first German wholesale reference price this year will also do wonders to start to normalize prices across not only the EU but all those hoping to export here.
That in turn will have global impact.
Regulation Is Beginning to Materialize
For those who thought that higher standards were a passing fad, the events of this year, particularly of the latter half of it have confirmed one thing for sure: Regulatory muster is here to stay.
To add to the general confusion, however, international standards on medical products and even food are absolutely in the mix as countries find that standards, measurements and production processes might be similar, but on the ground, still differ. Harmonization is a word many in the cannabis industry are hearing now, and not just in the medical space, but also the food and supplements market.
The initials “GMP” are on the lips of many this year. Not to mention another exciting development the cannabis industry from abroad did not see coming and still broadly does not understand – namely Novel Food.
The War For Reform Is Being Fought On Several Fronts
Inevitably, just as in the United States, the fights in the room right now as well as legislative gridlock are focusing on some strange nitty gritty. For example, cannabidiol (CBD) is just one cannabinoid from the plant. It is a chemical substance. Yet, suddenly, in Europe, this discussion is being bogged down in pseudo-scientific discussions in the name of public policy about whether CBD is a “new kind” of food.
Ultimately this is a discussion about regulation – whether CBD and hemp production should be regulated differently than they are right now – and whether the plant should be put in a different bucket than, say, tomatoes. Or when extracted, tomato juice.
GMP is also a very strange discussion which has still not exited the stage – mostly because of the lack of uniformity internationally between Canada and European states although that is moving in the right direction.
The last issue of course, which has been looming from the Canadian side for several years, including of course all the pesticide scandals, new regulations on the cultivation of all plants for human consumption. Even German farmers are up in arms (with a recent tractor protest in Berlin that paralyzed the city).
Cannabis is in the bullseye on all fronts.
Auld Lang Syne
If there was a theme to the industry as of this summer, it was clearly that things cannot continue as they have. The CannTrust Scandal absolutely encapsulated all that is wrong with the industry.
That said, there is every reason to believe that the most egregious scandals (or at least quite so many of them) are a passing fad. Indeed, many in the industry are in fact committed to turning over a new leaf (for the new year or just because).
The good news? There is every sign of course that it will.
2019 opened with a strange vibe in the air on the cannabis front. Israel and Thailand set the stage with dramatic reform announcements last Christmas. And as the calendar counts down to 2020, the larger players all seem to be licking their wounds (if not stock prices).
But cannabis reform is not just about profits on the public markets. What has gone down and where and ultimately, has the year lived up to its promise?
Reform Marched On In Several Countries
At this point, reform is certainly “too big to fail.” There will be no going back anywhere no matter the laggards still in the room.
From the perspective of opening patient access (and markets beyond that), There were several big stories on the medical front this year – and – in a real first for the EU – of not only the medical, but recreational kind as well.
Germany of course is going, relatively speaking, like “gangbusters” on the medical front although supply, quality and supply chain issues are still in the room. Even more so now because the German government has also announced, for the first time, a public reference wholesale price per gram of floss. That alone is big news, although expect that too to drop (see Aurora’s pricing for Italy, for starters).
In the UK, the NHS finally got down to brass tacks and negotiated a bulk discount for GW Pharmaceuticals cannabis drugs for a very narrow band of patients (mostly child epileptics and MS patients). A tiny minority of the estimated 1.4 million daily British “medical” users including those suffering from chronic pain can afford imports. The rest is all black, or in the case of CBD, gray market.
In France, the country finally got on the reform bandwagon with a “medical trial.” This means that all the major countries in the region are finally on board with some kind of reform. That too is a meaningful move.
Poland is also opening – a good sign for the remaining conservative countries in Europe still on the fence.
And in a real first (although do not get too excited just yet), on the “recreational” front, it is not just Holland that is in the room any more. Both Denmark and Luxembourg announced that they were opening this conversation. In Denmark and Holland’s case, this is in the form of “trials” in places where operational grey markets have already been established. In Holland, this is of course, regulating the “coffee shop” trade in large cities like Amsterdam. In Denmark, the new “trial” will be on the grounds of a revived hippy experiment called Christiana, that morphed predictably into the control of gangs over the last generation.
Luxembourg, however, seems intent on setting the benchmark if not timeline and is moving aggressively in one direction. As a result, as of this year, the strategic “heart” of Europe is now on the schedule to go full monty by 2022. That said, it is a country of about half a million people. Further, no matter the inevitably hype on the way, don’t expect the country to turn into a big cannabis hub- nor encourage pot tourism even from neighboring Europeans.
The end of 2021 is the time to watch for all things recreational. In the meantime, including next year, look for increasing “experiments” in other places. Particularly of the Swiss variety (where both recreational and medical products are sold via pharmacies.)
THC Is Being Accepted As Having Medical Efficacy
No matter the controversy in the room, and the strange inclinations of the British NICE to try to undo forty years of medical knowledge about the impact of THC on chronic pain, medical cannabis and specifically medical cannabis with THC has made its global medical debut as of this year.
That said, the push is on to “pharmacize” the product.
Flower (floss) is in the room, in other words, but the future is looking towards oils and distillates – at least for the medical market long term. And a lot of that will also come increasingly to this market from places like Portugal, Spain, Greece and other European markets now moving into the cultivation space seriously.
Then again, there is still a lot of road to travel. Wags who predicted that German health insurers would never pay for floss cannabis just five years ago were wrong.
CBD Is Not All Its Cracked Up To Be
For all those who sang “Free the CBD” this year, Europe has taken a rather conservative and concerted push back. From Austria to Italy and Sweden to Poland, the path to market for any product containing CBD has been a tough one this year.
That said, perhaps it is a call for more standardization- no matter how painful that might be economically. At a presentation given at this year’s IACM medical conference in Berlin, a medical researcher revealed the results of a study he had conducted on the accuracy of labelling of these products in several European countries. The industry has not standardized, labelling is all over the place in terms of accuracy – and the claims about “medical efficacy” are hard to swallow for substandard over-the-counter product.
If the CBD-based part of the industry is to thrive here, it will have to find a way to establish and certify itself. That appears to be going on in Italy right now. It also impacts every cultivator from Portugal and Spain to Eastern Europe looking at the possibilities right now.
However, with labelling and other EU cross currents in the room, this route to the industry has been fraught this year with all the cross winds and those are not likely to dissipate next year or indeed for the next several.
The Cannabis Winds Of Trade Are In The Air
While it may be a bit ironic, given that international trade has pretty much always been a hallmark of the development of the modern cannabis industry, next year will undoubtedly be the year of “International Cannabis Trade.”
No matter the problems “back home,” as of this year, a German-based manufacturer of GMP-certified product got fully underway (see ICC/Wayland’s success this year). That, along with the final decision on the first German cultivation bid, has clearly shaped a market that is still changing. And that change is driven by the admission, even by authorities, that there is not enough legal cannabis grown in the country.
That means that the strength of the German market will continue to drive policy (see the recent announcements on wholesale pricing) as well as demand that will be met across the continent.
Along the way, cannabis reform is also being driven locally. And that means, no matter the trials and tribulations of the Canadian part of the sector, which perhaps can be considered aptly warned for getting a bit too big for its britches, and no matter how faulting, the winds of reform are still afloat. Just perhaps, on the cards for next year and those to come, blowing from many more points on the globe.
You have to hand it to the Brits right now. There is nothing that seems to be working in a land caught in the gray zone of “Brexit or Not.”
That absolutely can be said for cannabis prescriptions and the subsequent availability of the drug, via the National Health Service (NHS). For all the hand-wringing and drama so far, it has only taken a year between possibility and execution. That said if Brexit were that “fast” who knows what might have already happened to the NHS to begin with?
Regardless of the many deservedly snarky comments in the room (from both the British and elsewhere point of view), here are the basics:
Cannabis-based medicine will be available only to treat two relatively rare forms of childhood epilepsy, Multiple Sclerosis, or chemo-induced nausea caused by cancer treatment. The drug can also only be prescribed by specialist doctors (not GPs).
Perhaps they should have attended the 10th biannual IACM conference in Berlin at the beginning of the month. There were certainly reform-minded Brits who did.
What Were They Thinking?
When reading the recommendations from NICE, it is hard to imagine how a medical policy body could get most of the cannabis discussion so wrong. While it is nice to know that dying children seem to be highly effective in setting drug policy in the UK, that is hardly comforting to the potentially millions of adult Brits who have absolutely been left out, this time.
This begs the question why an adult in chronic pain or suffering muscular spasticity of a kind not caused by MS (much less adult epileptics) is somehow in a different basket of care? Indeed, the idea of recommending against the use of THC specifically for chronic pain is, at this point, a sign of at minimum gross inability to read even recent medical studies from just about everywhere, not to mention patient evidence and testimony. Those adults who managed to get coverage, at least so far, will be given the right to continue treatment until their doctor decides otherwise. Not a very comforting place to be.
Here Comes The Gray And Black Market
All this will do of course, is push those who do not qualify for NHS coverage into either the private market (if they can afford it), or more likely, the existing gray and black market. The former of which of course, is, like other places, underground.
And while GW Pharmaceuticals has everything to cheer about, the rest of the established industry, at this point, surely should be ready to take a concerted stand.
The ridiculous posture of the NHS beyond that on cannabis in this day and age is hard to understand. Even the Germans are ahead of them. And Deutschland is hardly a country where the use of cannabis is anything like mainstream yet.
But then, welcome again, to the wacky world of cannabis reform where it is possible to take one step forward and then many back.
Is This The Face Of The British Conversation Post Brexit?
If there were a single conversation to unite a country right now, the medical coverage of cannabis for the country’s poorest and sickest might be it.
Unfortunately, this does not appear to be a conversation that will progress in the UK until it moves in the United States. Federal reform in America would of course open the doors, and immediately, to a state-like “recreational” market, where, theoretically, patients could buy any kind of cannabis they want.
Just like Colorado. Or California.
But here is the rub. In the United States, federal reform has not come yet. And even then, what health insurers decide to cover or not, and for what condition, is a topic many Brits have never had to really contemplate. And certainly not when it comes to cannabis. This new decision by the health authorities might just be a terrifying glimpse of what is yet on the agenda if and when Britain “divorces” the continent.
Is The Dream Of Medical Coverage For Cannabis Just That?
Here is the good news. Cannabis always makes progress, no matter how long the slog has been. If the Brits are determined to sit this one out while their citizens suffer, the conversation is still alive, if struggling, elsewhere. Notably Germany. And Israel.
These are, to date, the only two countries who have jumped in, seriously, on the issue of insurance coverage of cannabis, and for a broad range of conditions, although even here in both countries, there are still issues and controversies galore.
The terrible reality in the room however, is clearly writ large for all those who are brave enough to grasp it. Most patients are going to be on the hook for the cost of their medical cannabis for a long time to come.
You have read the press releases. You may have heard about such ideas at a recent cannabis conference in and around the EU of late. Or you may have encountered new distributors coming into the game with a German presence and a decidedly interesting ex-im plan that sounds a bit, well, off the map.
No matter how geographically creative some of these plans are, the problem is that many of these ideas literally do not make economic sense. Either for the companies themselves (if not their investors), and certainly not for patients. Not to mention, truth be told, the looming price sensitivity issues in the European market that North Americans, for starters, seem to still just be waking up to.
Some Recent Examples….
Yes, exports from Denmark have been much in the news lately (including into both Germany and Poland). Truth be told, however, this makes about as much sense, economically, as importing ice to eskimos. Why? Denmark, for all its looser regulations and less-uptight approach to the cannabis discussion generally, is one of the most expensive labour markets in Europe. Fully automated production plants are one thing, but you can build those in other places too. Especially warmer climates, with lots of sunshine. German production, as it comes online, will also make this idea increasingly ludicrous.
Who on earth got on this bandwagon? It seems that the enthusiasm in the room began when Denmark began to import to Germany (where the disparities in wages in production are not so noticeable). However, lately, several Canadian companies with a Danish footprint have been eying Poland of late.
And on that particular topic – there are many who are doing the math and trying to figure out, as the alternatives get going, if even Canada makes much sense, or will in a few years.
Low Wage Markets With Sunshine Are Hotspots For European Cannabis Production
Like it or not, the European market is extraordinarily price sensitive – namely because it is not “just” consumers called patients picking up the tab but health insurance companies demanding proof of medical efficacy.
That starts, a bit unfortunately, with understanding wage economics across Europe. The warmer the climate, in other words and the further east on the map, wages drop precipitously. That is “good” for an industry looking to produce ever cheaper (but more compliant) product.
It is also good, at least politically, for countries whose elected leaders are being forced to admit that cannabis works, but are less than copacetic about encouraging local production. See Germany for starters, but places like Austria, Poland and most recently France (which has just embarked on a first of its kind medical cannabis trial).
Here, no matter the temporary buzz about Denmark, are the places that cannabis production makes sense:
Portugal: The country is a newcomer in the cannabis discussion this fall, although in truth, the seeds of this reality were sown several seasons ago when Tilray began to build its production plant in the country in 2017. They are far from the only company who has seen the light, and these days, farmers are getting hip to the possibilities. Especially if they are already exporting crops throughout Europe.
Spain: The industry that can afford GMP certification is getting going, but everyone else is stuck in a limbo between pharmaceutical producers and the strange gray market (see the patient clubs in Barcelona). That said, political groups are beginning to discuss cultivation as an economic development tool, if not sustainable food and medication strategies.
Greece: The weather is warm, and the investment climate welcoming. Of all the countries in the EU, Greece has embraced the economic possibilities that cannabis could bring. How that will play out in the next years to come is an intriguing story.
Italy: The southern part of the country in particular is ripe for cannabis investment and it’s full of sunshine. However, as many have noted, organized crime in this part of the world is a bit fierce and starts with the letter M.
Malta: The island is a comer, but does importing cannabis from here really make economic sense? There are trade routes and economic treaties tying the island both to the apparently Brexiting British and Europe. Why not, right? Just remember that along with labour, transportation costs are in the room here too.
And Just Outside The EU…
The country now (sort of) known as North Macedonia and struggling to get into the EU if France would just get out of the way is also going to be a heavyweight in this discussion for years to come. Wages, of course, will increase as part of EU membership, but in general, this country just north of Greece is going to play a highly strategic role in exports throughout Europe.
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