CANNABIS Europa London 2022 opened its doors to over 1200 delegates from over 30 countries yesterday morning at London’s Old Billingsgate, bringing together the leading voices in European cannabis for the first of two days of insight and debate.
CEO and Co-Founder of Prohibition Partners Stephen Murphy addressed a packed conference hall this morning, welcoming the increasingly diverse audience which he said spoke to the growing interest in European cannabis.
Setting the tone for the day’s events, Mr Murphy said that in an economic and political climate where ‘we all need reasons to be optimistic’, he believed the ‘European cannabis industry gives us that hope that things are, and can get better’.
Pointing to the recent developments in Spain, which last week all but confirmed plans to legalise medical cannabis, alongside Germany, Switzerland, Portugal and Denmark’s evolving plans for a recreational market, he said he believed this was ‘our course to change drug policy in Europe and international law forever’.
Amid calls for optimism, he acknowledged that there was still work to be done to enable the cannabis industry to reach its potential, and that he knew ‘first hand that money is tight right now’.
“We’re in a bear market economically, but European cannabis is a bull, and it’s only getting started. Europe is still yet to significantly scale, valuations are still very attractive for international investors. So stay committed and stay focused. It’s impossible to succeed alone.”
Spotlight on Germany
Two successive sessions focusing on the rapidly evolving developments in Germany followed soon after, including an interview with Kristine Lütke MdB, member of the Free Democratic Party and German Bundestag.
Ms Lütke, who is currently attending expert hearings with the Ministry of Health in Germany to determine the future of the legal market, began by assuring the audience via a live video link that she was ‘quite optimistic that we will legalise cannabis within this legislative period’, should a draft law be submitted by the end of the year.
Brushing aside concerns surrounding the pandemic, war in Ukraine and inflation raised by the session’s host, Krautinvest’s Editor Moritz Förster, she added that the coalition was still ‘willing to fulfil the tasks we gave ourselves’, including the legalisation of cannabis for recreational use.
Despite the optimism around the pace of discussions, Ms Lütke said the complexity of the issue and the various authorities involved meant it was important ‘not to rush things too much’, adding that it ‘doesn’t help anyone if we run out of breath on the last metre’.
While Ms Lütke refused to be drawn into detail on the intricacies of the legislation, as the ‘hearings were confidential’, she said in her eyes the the most crucial element was ensuring Germany can ‘provide enough legal cannabis to meet the needs of the market and the consumers’, adding that she was ‘counting on the private companies to open up this new market.’
Pressed on what she believed to be the biggest hurdle facing the roll out of the market, she said she believed the ‘biggest issue still is the UN Single Convention and the Schengen agreement.’
Her optimism was not shared by all the members of the following panel discussion, including Carlsquare Group’s Managing Partner Arnold Holle, who said he doubted the Government could achieve all its goals by the end of the legislative period, estimating a legal market would emerge around 2026.
However, he added that he believed German cannabis companies would be ‘at least as strong’ as their US counterparts when the market was eventually launched, while calling for patience he added that ‘a year here or there won’t make much difference’.
The panel’s other members, including AlephSana’s Co-Founder Boris Moshkovits, suggested the date would be closer to the end of 2023, arguing that if it wasn’t achieved by the end of this legislative period, it might not happen at all.
The discussion turned to the session’s core question, whether Germany should pursue a ‘California or Caution’ strategy, with all members pointing to a need for balance.
Finn Hänsel, Founder of Sanity Group, said that nowhere has yet found the perfect compromise, adding that being too restrictive will boost the illicit market, but being to lax will lead to an unhealthy influx of people using cannabis for the first time.
When asked whether the proposed €10 per gramme price tag would allow companies to be profitable, Mr Moshkovits said he believed customers would eventually be willing to pay for the greater quality.
He explained he believed the same level of ‘sophistication that entered California’ would eventually emerge in Germany, with Mr Holle agreeing that the price gap between the legal and illicit market will eventually be justified by the end product.
In order for the market to succeed, Mr Hänsel argued that attaining legal cannabis had to be as convenient as a ‘dealer who will deliver to your door in 10 minutes’, and that the ‘if we don’t achieve this the law has failed’.
A Global Market
Following sessions focused on the possibility of a global cannabis market, and how unified global cannabis regulation could look.
Chris Murray, Principal at Fox North argued that the recently released Hodges Review could provide some guidance on how a global regulatory framework could be explored.
Later, during a session focusing on global supply chains, Cannavigia CEO Luc Richner suggested that only when we ‘have a harmonised global system’ can we effectively stamp out the global illicit market.
Metrc’s Chief Strategy Officer Lewis Koski added that these global regulations and ‘best practices’ would be established in Europe, rather than the US, thanks to its strong medical market.
He added that other industries could learn from the cannabis industry, which was one of the few markets in which supply chains managed to weather the storm of the pandemic.
Towards the end of the day discussion turned to timing, specifically the ‘right moment’ for companies to push into Europe.
Co-Founder of Artemis Growth Partners William Muecke said that while ‘first movers’ often get a head start in the market, they can often also be the first to fail.
“You could do everything right, and if the market isn’t there when you’re ready to go, you’re going to be sitting and waiting. You do have some advantages by picking the right steps early on, but it’s not the panacea to be early.
“It’s great news for Europe right now, you’re not too late. If you’re an entrepreneur, if you’re an investor, you’re not too late to the market at all.”