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New Frontier Data report explores cannabis growth and market trends

New Frontier Data’s new Global Cannabis Report: Growth and Trends Through 2025 features extensive analysis of both the legal and illicit cannabis markets in Europe and further afield.

The global cannabis report has been published two years following New Frontier Data’s previous global analysis of the industry. The industry has seen huge advancements in both regulation and growth since – which the report attributes to “growing acceptance of the plant’s therapeutic value, and recognition of the industry’s potential as a catalyst for economic growth.”

Importantly, the report notes the United Nations’ (UN) decision to reschedule cannabis by one level. Still classed as a dangerous drug, however, the report highlights that the UN’s decision, based on recommendations by the World Health Organization (WHO), recognises that the dangers related to cannabis have been overstated.

The report states: “The vote was based on a series of cannabis liberalisation proposals submitted by the World Health Organization (WHO), and although the UN rejected all the other WHO cannabis-related proposals (including to remove CBD entirely from the schedule of narcotic drugs), the vote was still an important milestone as a tacit acknowledgment by the global body that the dangers to cannabis had long been overstated, and that the plant has more therapeutic value than previously recognised in the longstanding global framework of blanket prohibition.”

Changing regulations in Europe

New Frontier Data highlights that Europe’s “laissez-faire attitude toward cannabis” is slowly becoming more formalised, including the regulation of medical cannabis markets, highlighting Germany as currently having the largest medical cannabis programme, with a current total of 84,237 medical cannabis patients. This number is expected to grow to 260,000 by 2025.

In the UK, it highlights the country is now working toward allowing increased access to the medicine. 

The report states: “Notably, the debate to fully legalise cannabis for adult use has been comparatively muted in Europe, absent the social justice issues (e.g., racial inequity in cannabis prohibition) that fuelled legalisation in North America. However, there too, small movements for legalisation are taking place, with Germany positioned to take Europe’s lead in cannabis liberalisation. Four of the six parties vying in the country’s Bundestag – scheduled for September 2021 – support cannabis reform, making it the first time that cannabis reform will have broad-based support among the legislative body’s candidates. The election is likely to be closely contested, and if no party secures a majority, the leading party will need to form a coalition government, providing the smaller parties with stronger negotiating positions vis-a-vis drug policy reform. 

“As the EU’s largest economy, Germany’s passage of major cannabis reform would have significant implications for European drug policy, and the outcome of the election will be closely watched by cannabis policy reform advocates across the continent and abroad. If Germans elect a wave of pro-reform candidates, it will likely encourage political candidates in other countries to leverage cannabis policy reform as a means to galvanise young voters, reform-minded voters in particular.”

The growth of the European market

Specifically in Europe, the report highlights that the legal market is estimated to have a 19.7 per cent CAGR until 2025. It estimates the medical market to reach (USD)$722.6m and the legal adult-use market to reach $140.5m – a total of $863.1m across both markets by 2025. It also highlights that 6.1 per cent of the population in Europe uses cannabis every year.

Global spending on cannabis accounted for $415bn in 2020 for both legal and illicit markets, with Europe accounting for 19 per cent.

Currently – total spending on cannabis in Europe, which has an estimated 107,356 medical cannabis patients and 44.2 million cannabis consumers, is pinned at $79.5bn, with the average price of flower per gramme costing $11.35. This price point means the continent has the third most expensive high-THC cannabis market.

The United Kingdom

Following legalisation of medical cannabis in the UK in 2018, only a handful of patients have received prescriptions through the NHS, and families have continued to campaign for better access to the medicine for patients.

Despite this, the New Frontier Data report highlights how the country has since become a global leader in the manufacture of products containing cannabis extracts. This has created a split structure of the market in the UK between public and private, says the report, meaning only those who can afford a private prescription can access high-THC products. 

It states: “That regulatory approach has acted as a significant barrier for patient access to high-THC products, and has severely limited overall growth for the legal market.”

The report highlights that in 2020, of the UK’s 67.3 million population, there were 4.1 million cannabis consumers, of which 3,370 are medical patients, spending a total of $9.0bn at an average of $12.16 per gramme of flower. The report estimates the UK market to reach $29.3m by 2025. 

“For a country with a population of 67 million, and an existing cannabis consumer population of 4 million, that is an infinitesimal medical cannabis program participation rate,” says the report of the number of UK medical cannabis patients. 

Germany and the Netherlands

Despite the Netherlands ’ liberal history with cannabis, Germany now is at the forefront of the European medical cannabis market since it legalised use of the plant for medical purposes in 2017. 

New Frontier Data highlights that the country’s programme allows for insurance reimbursements for the product, with health insurance covering around 90 per cent of the population. Patients in the country are driving demand for cannabis products, with flower accounting for around 43 per cent of imported product in 2020, and extracts accounting for around 34 per cent, however, the report notes these figures demonstrate health reimbursements and not private sales. 

In the Netherlands, cannabis is available to adult consumers via coffee shops where sale and consumption is tolerated, however, legal and regulated medical cannabis is available through pharmacies where doctors are permitted to prescribe the product for any condition given they believe the product will be more beneficial than previous treatments, the report highlights. 

Price per gramme of flower in the Netherland’s is around $7.12, and the country has an estimated 1.4 million consumers, with 2,572 medical cannabis patients and a total of $1.9bn spending (2020).

Portugal

Portugal is one of the few countries in the world with fairly relaxed regulations around cannabis, with decriminalisation of personal use of all drugs, and having legalised medical use in 2018. The New Frontier Data report highlights that the country is home to some of the lowest production costs in the world thanks to the country’s climate and light conditions. 

The report states: “In June 2018, Portugal passed a law to legalise cannabis for medical use, with plans to set up a regulated medical cannabis industry. Legalisation and overall progress in the domestic legal medical market have subsequently been slow to materialise, with qualified patients able to access only a few high-THC products. Nevertheless, the country has significant growth opportunity as a future export market.”

The report’s data on Portugal shows that in 2020 there were 490,332 cannabis consumers in the country, with a total of $708.6m of spending on cannabis, however, Portugal has only 672 medical cannabis patients. Price per gramme of flower in Portugal is $8.03.

The report states: “It has been two years since initial legalisation, and while products are still not widely accessible, steps have been made to lay the groundwork for an operating legal market in the next year.” 

It continues: “Last year, Infarmed created the Office of Cannabis for Medicinal Purposes to aid communication; additional licensing has since been underway, with reports of 150 existing applicants waiting in the pipeline for review…

“While the country prioritised the legalisation of production for exporting, the country is finally taking steps to operationalise high-THC cannabis sales for patients in Portugal.” 

To find out in more detail about other European markets including Finland, Denmark, the Czech Republic and more, as well as the report’s insights on the global market, visit www.newfrontierdata.com.

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