Comments from Giadha A. DeCarcer, co-founding member of CTrust and founder of New Frontier Data, about Europe’s role in the global cannabis industry, evolving markets, and the future of medical cannabis.
About Europe’s role in a global cannabis industry compared with other regions…
Europe’s role is very much evolving, and Germany’s play in the market is expected to be a deciding factor in its ultimate role.
When assessing how the global cannabis industry has been developing over the past decade or so, those of us who have been fortunate enough to have front-row seats in its evolution have begun to see patterns, I certainly have.
North America is without a doubt, and will continue to be for at least the next 3 to 5 years, the cannabis consumption epi-center, and as such much of what we see in terms of B2C innovation and expertise stems in great part from American companies.
Turning South, when looking at Latin America, while there is a strong push for nations such as Mexico, Panama, Jamaica, Colombia, Chile and of course Uruguay to position as more cost-effective producers looking to meet North American (and possibly even European) consumer demand, the verdict is still out on whether they will be able to do so. What is however interesting is that the region seems to be turning into a trading ‘pass through’, whether legal or illegal to both the U.S. and European consumption markets, and that tax havens are quickly emerging for non-Latin American companies to establish themselves in and leverage the existing trading routes.
Looking East, Asia Pacific is bifurcated into cannabis medical research and development -manly in Australia-, and industrial hemp applications born of traditional hemp fiber cultivation in China and Asia. While Australia’s research into cancer-focused cannabis medicine seems to be leading the way globally, second only to possibly Israel’s research, and some smaller projects across Europe, China and India are both still in the early stages of effectively positioning themselves as industrial hemp producers. That said, India, given its strong technologic development foundation, is making strides and looking at Europe as an attractive export target, specifically for the automotive and the avionics sectors as it pertains to bio-plastics.
Disclaimer: krautinvest.de is media partner of this year’s ICBC Berlin, which will take place on June 29 and 30, 2023 in Berlin. Our readers receive a 25 percent discount on tickets via this link. Giadha will discuss “how to create a cannabis brand with lasting power navigate the regulatory landscape”, Thursday, 29th of June, 3.10pm CET.
Europe, as an expected soon to be large consumption market has a unique opportunity to, if not responsibility to, be very thoughtful and deliberate in choosing what its global role should be. On one hand, as possibly the second largest medical cannabis consumption market in the world, it can certainly look to compete with American brands, which have already begun to strategically and tactically position themselves in various markets across the region. On the other hand, given European nations’ traditional leadership position in health and beauty research and product development, one may wonder if becoming the ‘experts’ in processing technology, something still lacking worldwide, may not be the most profitable path to least resistance in an increasingly competitive and intertwined global cannabis market.
Last, but not least, African nations, much like Latin American nations, have been looking to leverage what are primarily agro-based economies, many focused in declining tobacco cultivation, to meet European cannabis raw material demand. While we are beginning to see bridges built from South Africa and possibly Zimbabwe amongst others, it remains that European GMP requirements present high barriers to entry. As such, an interesting question, especially as Europe decides what its ‘sweet spot’ will be in the global cannabis arena, is whether a partnership amongst African nations and European processors may marry cutting-edge processing technology and low cost cultivation to make a material mark in the global cannabis ecosystem.
Adult-use cannabis, medical, CBD or hemp for industrial purposes – thoughts about the fastest growing segments…
This depends on which market you are looking at, national, regional or global, whereby not only would growth differ accordingly, but visibility into the actual figures would also vary materially thus impacting the accuracy of the assessment. All of that said, more observationally, and at very much a macro level assessment, recreational use has grown at a much more aggressive rate in the U.S. over the past decade or so, yet the medical segment is expected to make up the largest share of the market across Europe, especially as it is presumed, as has begun to happen across North America, that recreational users will end up being pulled into medical consumption.
As far as industrial hemp, it may still be too early to tell with much certainty as the number of sectors to which its applications apply seems to increase daily and those sectors tend to, in many cases, be very large scale ones at a global level such as the automotive, avionics, and packaging sectors.
About the German cornerstone paper 2.0, called legalization “light” – the planned pilot projects and cannabis clubs…
The German mom and pop rollout has alas not been as successful as expected in other countries such as for example Spain, or more specifically the region of Cataluña in Spain. Too small in scope, it has become too insignificant to move the market needle. Social clubs with home grows do not seem to be attracting investors, consequently the investment community is likely to ultimately continue to watch the medical programs, and place their bets accordingly.
Thoughts about the German medical market – based on a consultation with CKO Dr. Amanda Reiman at New Frontier Data…
When a medical only state introduces adult use into the market, the revenue from medical programs as well as patient counts usually decline or stops growing. This is due to current patients having access to cannabis without having to pay for a medical card. However, this is variable by state and a big factor in determining the impact of adult use sales on the medical market lies in the tax differential for the consumer. For example, in AZ, MI, MT and NM medical sales declined rather quickly after adult use was introduced, while in IL, MA, NV and NJ medical sales remained stable. NJ does not apply tax to medical cannabis, IL has a very low tax rate for medical and a very high rate for adult use. The differences in the market behavior could also be tied to the conditions for which cannabis is approved for medical use. Chronic pain continues to be the most common medical use of cannabis, and with concerns about the use of opiates and 94% of medical consumers saying cannabis is helping them, it is important to maintain medical access and a medical frame for those consumers who view their use as strictly medical. States with an open ended or broad list of conditions likely had recreational consumers in their patient pool prior to adult use, and the onboarding of adult use access moved these people into the recreational market.
What adult use sales does not do, is impact the need for medical cannabis among those who use it to treat a myriad of health conditions and symptoms. These people still need access to products that work as medicine, regardless of which market they interact with. Over half of consumers from our 2023 Consumer Survey say that their use is both medical and recreational, meaning that regardless of the market type they use, their motivations are relatable to both.
About other relevant and growing European medical cannabis markets in the near term future…
A very brief answer, as expected, and in no particular order (yet), is: Switzerland, France, Italy, Spain, Portugal, Croatia, and the U.K.
About Giadha A. DeCarcer
Giadha A. DeCarcer is the Founder of New Frontier Data, the premier data, analytics, and technology firm specializing in the global cannabis industry. Founding New Frontier Data in 2014, DeCarcer grew the company from a $25,000 one-person-based startup, to an over $150 Million Dollars-valued enterprise, with more than 100 employees across three continents, and built one of the most trusted and respected brands in the space today, crossing 20 billions in repeat earned media reach worldwide within its first five years of operation.
In late 2022, Giadha became one of the three co-founding member of CTrust, the first and only investment risk scoring and monitoring solution in the cannabis industry today, and joined the executive team as its CEO. She has since stood up the company’s operational infrastructure, lead the launch and go to market of its beta solution, and introduced the CTrust brand in both the U.S. and Europe. An entrepreneur with over three decades of experience in business strategy, execution, management, and branding, DeCarcer began her career in banking, and progressed to technology, data analytics, intelligence collection and reporting, and emerging markets across multiple domestic and international sectors.
Disclaimer: krautinvest.de is media partner of this year’s ICBC Berlin, which will take place on June 29 and 30, 2023 in Berlin. Our readers receive a 25 percent discount on tickets via this link. Giadha will discuss “how to create a cannabis brand with lasting power navigate the regulatory landscape”, Thursday, 29th of June, 3.10pm CET.