Cannabis Global Q2 Roundup

by | May 31, 2018

With the Canadian recreational market now on the cusp of going “full recreational” what is the state of the cannabis industry in the world today? Sadly, thanks to lack of federal reform, American producers are so far completely shut out globally. Maybe it’s not something that its burgeoning $10 billion domestic market really cares about, but a lack of forward progress still impacts elsewhere. So after two quarters, what have we seen across the world in the cannabis industry?

Where Is the United States?

So far, despite a revoking of the Cole Memo earlier this year, the Trump Administration appears to be playing a different game. Stall and delay are the ultimate result, no matter the motivation. In the meantime, in January of this year, Vermont became the first U.S. state to legalize recreational use via state legislature. Yes, it is The Granola State, but on this issue, Vermonters are actually reflecting at this point the majority of public American opinion. Per recent advocacy polling, 64% of Americans think recreational reform should happen and 90% believe that medical reform should already be here. In the meantime, this year will inevitably see a raft of states begin to decide this question for themselves as federal reform takes baby steps with the recent signing of the 'Right To Try Act'.

Canada Is Going Full Monty

In Canada, the discussion is over and recreational is happening this summer. This in turn, is moving the medical debate forward, although there is still no insurance mandate as there is in other parts of the world (see Germany). Regardless, this sudden opening freedom over the past several years has created a group of multi-billion dollar Canadian unicorns at this point, who are currently looking abroad. The vast majority of medical cannabis coming into the German market right now is coming from Canada.

Europe Continues To Open On Medical

By far the most interesting country right now in Europe just from a volume perspective is Germany. The country is currently integrating medical cannabis into the still functional public health system. The big news on this front? Techniker Krankenkasse (TK for short), one of Germany’s biggest statutory health insurers, has just released a report discussing how and what kinds of conditions they are covering cannabis for, what they are turning down, and with the University of Bremen, looking at issues of effective dosing. The German domestic cultivation bid, for now, at least, is still in a holding pattern where it is expected to be at least through the fall. That means that not only will domestic medical cultivation probably not yield much before at least mid-2019, but this market will be very reliant on (expensive) imports. For a market that zoomed from about 1,100 patients before the law changed last year to 16,000 patients covered under insurance (and another 15k or so with doctors willing to write scripts the insurers are still turning down), that is a lot of money going to buy foreign product.

That said, by next year, the cultivation that is happening in other places will have started to bear fruit, literally. International investment in cultivation is already taking place in Spain, Portugal, Greece, and the Baltics. The majority of that product is still targeted for Germany. Switzerland remains an intriguing outlier at the present as its CBD only market continues to percolate.

Bottom line? The EU is a patchwork of mostly medical reform, with a few outliers that are more focused on scientific inquiry, testing, and results.

The Rest Of The World

Reform is moving in South Africa. The first medical dispensary in the country just opened in Durban this month. Zimbabwe, right next door, is on the same path.

The big news in Asia is not only that Israeli producers continue to chafe at the export ban, but Australia is powering forward on domestic cultivation for a growing medical market. Several Aussie firms appear to be establishing themselves in the Baltics, but like other Canadian and Israeli ventures who are executing on this strategy, is designed to service the Euro medical cultivation market. Not to export back home.

What Does The Rest Of 2018 Look Like?

It can not be denied that medical cannabis will have a cascading effect and probably only be measurable in the longer term. And despite the new discoveries and testing in recreational usage, the reality is that in places where patients have access to insurance covered cannabis, the health markets will continue to rack up wins.

Bottom line? There may be no major surprises this year, but progress is steady as she goes just about everywhere. And that is also a positive sign.