Frankfurt, June 2021
After a prolonged absence of major events in Europe, the international Cannabis community ﬁnally had the chance to get together for “Cannabis Business Europe” at the exclusive Dorint Hotel near Frankfurt. The event took place over two days, from 22nd to 23rd of June, and was limited to 200 participants and 50 speakers. Even though hygiene regulations were kept to high standards, participants had the chance to network, share ideas and develop new partnerships.
Many excellent speakers offered personal insights into this emerging industry. I want to share my key takeaways for all medical cannabis enthusiasts who were unable to attend the event:
European Legal Framework
Tjalling Erkelens, CEO of Bedrocan, made us aware of the situation around Brexit and how suddenly UK patients lost their access to cannabis medicine due to political changes. From 2018, UK patients were able to buy CBD oil from Dutch pharmacies, however after Brexit, this was no longer the case, and many patients had to purchase products via other non-standard routes.
Erkelens supports the consistency of cannabis laws throughout Europe. Nonetheless, he points out that we had standardized rules when all cannabis medicine was prohibited everywhere. Thus, we should not only focus on the standardization of laws but also the content of these laws governing the sector. Lastly, he reminds us that we need higher quality standards for cultivation to ensure pharma-grade standards and patient wellbeing.
- The UN Single Convention on Narcotic Drugs of 1961.
- GACP standards for cultivation.
- GMP standards for post-harvest processes.
All other laws around medical cannabis are not uniform across the European Union. The EU has already signed a resolution in 2017 to agree on a common framework to regulate the whole medical cannabis market; however, this framework is still being developed.
Few German cannabis wholesalers have agreed that the European cannabis market has not been growing as fast as the predictions would have suggested. The challenging pandemic situation along with a complex European regulatory framework are common causes mentioned for this shortfall.
However, Giadha deCarcer, who is CEO of the intelligence service New Frontier Data illustrated with a graphic on global spending in specific industries that Cannabis already has a huge impact. She compared annual global spend of Cannabis US$408BN shy of tobacco US$785BN, fast food US$617BN, beer US$593BN, but already above TV&VIDEO US$325BN and wine US$302BN. Cannabis has not only the potential to disrupt these industries but also overtake them with more popularity. The data has been collected over the last five years and refers to annual global spending. The European Cannabis industry is still in its early stages and has high growth potential.
The most significant transactions which are shaping the medical cannabis industry these days have been the Canopy/Acreage merger which created the ﬁrst American conglomerate with a combined market cap of US$17BN+, the Tilray/Aphria merger creating the world’s largest cannabis company with a combined market cap of US$8.2BN, and the strategic investment of Flora Growth to become Hoshicap Portugal’s preferred supplier.
Investment in Cannabis
Finn Age Hänsel, who has raised a total of 60 Mio € for the Sanity Group, shared his valuable insights into fundraising for European cannabis startups. Still, there are many concerns for investors to invest in medical cannabis companies:
The regulatory environment remains unclear in Europe, and market growth has been much slower than expected. Apart from that, Canadian LPs have disappointed investors with very optimistic projections on the other side of the pond, and many cowboy companies are ﬂooding the market. Last but not least, cannabis in Europe still suffers a massive reputation problem, and in many cases, companies don’t distinguish their storytelling between medical, recreational, and wellbeing. Finally, it is an entire industry built around a single plant.
On the ﬂipside, there are even more reasons why investors should invest in the cannabis space: Every month, there is a new government somewhere on this planet legalizing medical/recreational cannabis. As a result, there is a significant trend towards natural healthcare and wellbeing, and cannabis has the potential to disrupt many huge industries such as pharma, tobacco, alcohol, and cosmetics. Furthermore, cannabis entrepreneurs in Europe are still ahead of their time. Unfortunately, the sector will remain highly undercapitalized as long as the stigma of the last decades about the plant persists.
Extracts and dosage forms
Among the German wholesalers, many are getting ready for Cannabis 2.0, meaning delivering smokeable ﬂower to pharmacies and working on extract formulations and products that allow patients to better dosage their medicine. Stefan Feuerstein, CEO of AMP, is in favor of promoting the usage of extracts. He started out explaining that historically the use of cannabis extracts in medicine has always been essential. However, nowadays, it’s just 4% of the German cannabis pharma market, compared to 75% in Australia, where research of cannabis extracts has been elaborated on over the past years.
Sebastian Kamphorst, who is CEO of Becanex, also trusts that the extract market is rising. With his company, he is in a position to serve the growing CBD pharma, food, beverage, and cosmetics industry with their unique extract formulations. His studies suggest that customers are most concerned about quality, dosing accuracy, contaminants, consistency, taste, and legal status around CBD products.
In conclusion, thanks to the organizers of Cannabis Business Europe for hosting such a fantastic event during these challenging times. The cannabis industry is looking forward to getting together again in Berlin at the ICBC at the end of August 2021.