CURALEAF, the US cannabis giant now valued at over $8bn, has officially completed its integration of EMMAC Life Sciences in preparation for what it believes to be the imminent rise of recreational cannabis across Europe.
The company announced last week that its nine-month $350m acquisition of EMMAC, which has now been rebranded as Curaleaf International, has been completed and both companies’ operations are now ‘fully integrated’.
Curaleaf International’s chief executive Antonio Costanzo told BusinessCann this was an important moment for both companies, setting ‘the foundation for expansion of the group beyond the US in Europe’.
“It is important for us at EMAAC but it’s also important for Curaleaf because clearly they made that big step, a big decision back in April, to start going out to international markets.”
Recreational Cannabis Gaining Traction
It marks the latest in a growing number of US cannabis companies eyeing investment in the European cannabis market.
During last week’s Cannabis Europa 2021, Prohibition Partners co-founder and CEO Stephen Murphy said that the progress being made in the region is ‘representative of the growing interest of US companies in Europe… who are now investing and participating in the industry’.
However, unlike many of its peers who opt to focus on the safer bet of medical cannabis growth in Europe, Curaleaf is setting itself up for what it sees as the inevitable legalisation of cannabis for recreational use.
“We think that we are on the verge of seeing the next big inflection point, which is some countries legalising the access to recreational cannabis, we think that is going to happen in the course of 2022 to early 2023.
“We are close to the political stakeholders that are driving this conversation in some way, in some of the key jurisdictions. We see a lot of traction around those discussions,” Mr Costanzo said.
Specifically, Mr Costanzo said pilot projects to introduce recreational cannabis in the Netherlands and Switzerland were happening ‘as we speak’, while
He added that he believes there is a ‘very high chance’ of a referendum in Malta being staged in the first half of 2022 on legalisation of recreational cannabis, and he expects ‘we will have a set of rules for the legalisation of recreational cannabis in Germany’ in the next 12 to 18 months, as reported earlier by BusinessCann.
European Domino Effect
Once one major European country makes the decision to legalise recreational use there will be a ‘domino effect’, according to Mr Costanzo, who likened it to the legalisation of online gambling across the bloc.
“When the first big countries did, in particular Italy and France, there was a domino effect. Other countries said ‘okay, we cannot be left behind this is happening. It’s a global trend, we’re also going to regulate it and I think we’re going to see exactly the same thing happening in cannabis.”
However, during a panel discussion focusing on the prospect of recreational cannabis across Europe at Cannabis Europa, panellists were less optimistic about the timeline regarding legalisation, especially in the UK.
Conservative MP Crispin Blunt told the conference: “For now the government is very firmly against legalisation. Its policy is crystal clear, the United Kingdom government is not going to consider this as an issue.”
He said that while recreational legalisation in the UK was still a long way off, ‘with the way the world is going is a matter of when not if’.
UK Needs A Cannabis Authority
According to Mr Blunt, in order for the government to consider expanding access to cannabis it needs a Cannabis ‘Authority’ to advise its policies moving forward.
“In the United Kingdom, what is missing is the capacity within government to properly advise the government in the space of cannabis based products, as you can tell from the mess we made with regulations around medical cannabis and the confusion that arises from CBD products,” he said.
“We very badly need some kind of cannabis authority that will advise government ministers in an authoritative way on the pros and cons of the various courses of action.”
This authority would ‘form the basis’ on which the debate around recreational cannabis usage can be had, Mr Blunt continued, adding that the decision will ‘very much depend on the licensing, regulation and taxation proposals that would sit around the legal adult use market’.
Speaking at a separate Cannabis Europa panel earlier in the day, Memery Crystal’s senior partner Nick Davis said that he didn’t ‘see recreational cannabis being a big theme in the UK’, but added there was ‘no question’ that some European states would soon open up to regulatory use.
Learning From Canada’s Mistakes
When this happens, both panelists and Curaleaf agreed that the European industry would be able to expand much more rapidly than its North American counterpart by learning from the legislative mistakes made in the US and Canada.
Peter Reitano, co-founder of Canadian cannabis company High12, told the conference that you could ‘probably write a book on the disastrous regulatory framework’ put in place in Canada following legalisation in 2018.
Chief among is mistakes were high taxes which smothered burgeoning cannabis businesses, extremely tight regulations preventing businesses building customer relationships and THC limits which pushed customers to seek out illicit sources.
Mr Costanzo concluded that Curaleaf International was now in an ‘ideal situation when and if recreational cannabis opens up in Europe because we will be able to benefit from the experience and expertise of the Curaleaf team in the US.
“We can hopefully avoid some of the mistakes that they made in the beginning and be faster, quicker and more effective here in Europe,” he added.