The United States’ adult-use cannabis market, which is now active in 24 states following the recent addition of Ohio, was worth US$17bn last year.
According to Prohibition Partners latest Global Report: 4th Edition, total cannabis sales (including medical) in the US are set to top US$33bn this year, while adult use sales in Canada are already nudging $6bn.
Though both of these relatively mature markets are expected to see continued growth through ‘medical-to-adult-use conversion’, attention is increasingly turning to the accelerating stream of countries across the Europe which are soon set to launch their own adult-use markets as new methods to overcome regulatory hurdles develop.
“To bypass international regulatory barriers, countries in Europe have framed adult-use cannabis legalisation for scientific research, as seen in Switzerland, the Netherlands, and Germany (Pillar 2), which aim to use pilot projects to examine the social, health and youth protection effects of legal commercial supply chains of adult-use cannabis,” the report states.
“With these structures in place and with countries being able to interpret international laws to a certain extent, it will be exciting to see how other countries in Europe, as well as globally, will justify and frame adult-use legalisation in the future.”
Europe’s adult-use cannabis market
The global cannabis industry has seen ‘incremental, rather than abrupt, changes in cannabis-related regulations and activity’ throughout 2023, according to the report.
In each global region, ‘recognisable patterns of development that characterise the industry’ have begun to evolve, and 2023 has seen each region generally follow a ‘familiar path of development’.
North America remains the global powerhouse of the legal cannabis industry, but the US persists with its pursuit of international isolationism, while Canada continues to struggle with a hostile domestic environment despite its more open international approach.
Many of Canada’s largest players are as such turning to the nascent European market, which has seen ‘significant developments continue to be made on a consistent basis’.
Although Europe continues to be a ‘somewhat fragmented and heavily regulated business environment’ with only a small number of countries reaching the advanced stages of adult-use legalisation, two broad models for doing so are beginning to emerge.
The first, Prohibition Partners suggests, involves the establishment of ‘not-for-profit private organisations’ which have registered memberships and handle their own cultivation and distribution.
This model, as seen in Malta and in Germany’s upcoming Pillar 1, also enables citizens to grow their own cannabis at home.
The second involves ‘spatially restricted and tightly controlled supply chains which will run for a set period of time’, a method currently being tested in Switzerland, the Netherlands and being proposed by Germany in its upcoming Pillar 2.
First fully legal adult-use supply chains emerging
As reported earlier this week, Switzerland has recently seen an additional pair of its pioneering pilot trials begin selling legal, adult-use cannabis to patients.
With four active pilot trials, and three more with approvals that are ready to begin in earnest in the coming months, these represent the ‘first fully legally compliant adult-use supply chains in Europe’.
Prohibition Partners estimates that the current trials currently include approximately 4100 participants, a number which could rise to 10,000 ‘in the coming months’.
While this would make Switzerland’s effective adult-use market larger than many European medical cannabis markets, this number is soon set to be dwarfed by the Netherlands.
The country recently made an announcement regarding its long-delayed but highly anticipated adult-use pilot. Within weeks, all the coffee shops in the Breda and Tilburg regions will be able to legally receive supply from two licenced domestic producers, with additional producers set to come online imminently.
These coffee shops will be able to continue sourcing their cannabis from illicit suppliers for a six week ‘transition period’.
Around 400,000 citizens across the region will thus be able to legally purchase cannabis for recreational purposes, representing the ‘first time that there will be a significant adult-use market in Europe which is supplied by a fully legally compliant supply chain, from seed-to-sale’.
After the initial results of the trial have been evaluated, the project is due to expand to a total of 10 regions.
Other countries make their intentions clear
Germany is continuing to push ahead with its landmark CanG bill, albeit in a more watered down form than initially proposed, with Pillar 1 expected to come into force early next year.
Meanwhile, expert groups in the Czech Republic have been busy fleshing out the details of a key cannabis reform bill, which would authorise the commercial cultivation of cannabis and the establishment of special clubs for adult-use.
“The primary barriers to getting the framework passed into law in the Czech Republic revolve around complying with rules set by the European Commission, which earlier this year curtailed Germany’s ambitions for a wider legalisation and licensed production frame- work for adult-use cannabis. If these obstacles can be navigated successfully, the Czech adult-use market could quickly develop into a relatively large industry.”
Portugal also recently announced its intention to develop a working group for adult-use legalisation, aimed at engaging stakeholders and experts to conduct a comprehensive analysis, with results expected by the end of the year.
Additionally, Belgium’s Deputy Prime Minister and Minister of the Economy and Employment, Pierre-Yves Dermagne, has called for adult-use regulation to be considered in the country, pointing to the progress made on the topic by its three neighbouring countries, Germany, the Netherlands, and Luxembourg.
With a number of countries on the verge of passing core legislation, and even more holding back potential reform until other frontrunners like Germany take the first step, 2024 is set to be a milestone year in the evolution of cannabis across Europe.
Prohibition Partners’ ‘The Global Report: 4th Edition’ will be available to purchase tomorrow (Thursday December 13th), but you can pre-order the report right now here.