European Marijuana and CBD Market Opportunities: Reflections from Spannabis and the World Cannabis Conference in Barcelona
While marijuana and hemp continue to be burgeoning markets in the United States, international markets are also beginning to emerge offering additional opportunities to entrepreneurs in the cannabis space. The global legal cannabis industry is predicted to be a $32 billion a year market by 2022. Just as understanding and navigating the siloed state regulatory regimes is critical to a national strategy, it is essential that any company exploring opportunities internationally have a robust appreciation of the international legal landscape and target markets. In a series of articles, we will explore the current legal status of marijuana and hemp around the world, starting with Europe, and specifically, Spain where Drummond Woodsum Attorney Malina Dumas recently attended the World Cannabis Conference and Spannabis.
Spannabis and the World Cannabis Conference
On Friday, March 15th Drummond Woodsum attorney Malina Dumas attended Spannabis, the largest cannabis event in Europe, as well as the World Cannabis Conference that took place in conjunction with this year’s event. Spannabis has been held in Barcelona, Spain since 2002 and this year more than 25,000 people from around the world walked the festival grounds over the course of three days. There were 282 companies showing off their products and services at the event, but it is still illegal to buy or sell marijuana in Spain; it can only be grown for personal use and consumed in a private residence. Consequently, the only marijuana products attendees could purchase were seeds. While the retail ban was strictly followed, the laws prohibiting public consumption of cannabis and the festival’s own anti-smoking policies were, to put it mildly, not enforced. In fact, there did not appear to be a single law enforcement officer on the premises.
Beyond the many seed banks represented at the trade show, exhibitors also included wholesalers, medical clinics, consultants, associations and NGOs, businesses selling nutrients, LED lamps, and other growing products, renters of trimming equipment, media outlets, and retailers selling products such as cannabis paraphernalia and hemp textiles.
As part of the Spannabis festival, attendees could try cannabis-infused beer, ice cream, and chips. In stores across Spain, you can find cannabis chocolates and even cannabis-infused vermouth. While many of the products in Spain are presented as containing “cannabis” with no mention of CBD in the name of the product, the labels note that the products are low in THC and high in CBD.
In most countries in Europe, cannabis is legal if it has less than 0.2% THC content by dry weight, which is even less than the 0.3% maximum allowed in the United States to be considered legal hemp. Switzerland, however, has fully legalized cannabis at levels up to 1.0% THC, making it much easier to harvest high-CBD strains and solidifying the country as the CBD hub in Europe for the time being. According to a representative of the seed-bank Dinafem who spoke at the World Cannabis Conference, the cannabinoid CBG could end up being the next big thing for treating medical conditions in a few years.
Despite the prevalence of CBD-rich food and beverages seen at Spannabis and beyond, the legal status of CBD in the European Union is in fact just as murky as it is in the United States. We will explore this issue in detail in a future article.
Cannabis Clubs in Spain: A Unique Model in Europe
Many people are under the misconception that cannabis is completely legal in Spain, and the country certainly exhibits one of the most liberal attitudes in this area at many levels. In actuality, it is illegal to sell cannabis (other than seeds and some hemp products) in Spain and to consume cannabis in public spaces. It is legal, however, to cultivate and/or consume cannabis for personal use, whether for medical purposes or otherwise.
In order to get around the prohibitions on selling cannabis and consuming cannabis in public spaces, Spaniards decided to create private cannabis clubs in the early 1990s that were purportedly non-commercial entities providing “members” with cannabis to meet their personal needs. Membership fees were designed to cover overhead/service costs rather than the cost of cannabis in order to circumvent drug trafficking laws. By 2017, the city of Barcelona alone was reportedly home to more than 300 of these clubs, with some clubs listing thousands of private members. Annual cannabis industry revenue in the country in that year was estimated at $72 million. In December 2017, however, Spain’s Supreme Court ruled that regional governments did not have the authority to regulate cannabis social clubs and that their activities were essentially commercial in nature and thus illegal. Cannabis clubs continue to operate in the gray market and enforcement actions have been irregular and relatively unpredictable. Historically, cannabis clubs were exclusive to Spanish citizens but certain clubs decided to open their doors to tourists that paid the membership fee and provided an address of where they were staying in Spain. Acquiring and consuming cannabis in such a club was, for the most part, the only way for a foreigner to legally do so. Given that the highest court in Spain has determined that cannabis clubs are illegal, however, tourists take even more significant risks when they seek out cannabis in the country today.
European Market Trends
As noted above, by 2022, the global legal cannabis industry is predicted to be valued at $32 billion. This market is expected to grow rapidly across Europe and beyond over the next several years as more countries push toward legalization.
While Spain consistently hosts the largest cannabis event in Europe, it is Germany that took the helm as the leader of the European market in 2017 when the country liberalized its existing medical program. Approximately 82 million Germans have now gained access to medical cannabis through the country’s 20,000+ pharmacies. To put this number in perspective, prior to 2017 a small number of countries had authorized just a few thousand patients to be treated for specific conditions.
In terms of net legal sales, however, Switzerland is the leader in Europe having reached an estimated $123 million in 2017 with an expected growth of 6% to $163 million by 2022. These numbers are the result of Switzerland’s unique approach, discussed above, of legalizing cannabis that contains up to 1% THC and allowing pre-rolled cannabis cigarettes to be sold in supermarkets and tobacco stores to anyone over the age of 18.
Interested in learning more about the status of cannabis and hemp laws in Europe and possibly entering the international market? Stay tuned for future advisories.