Until the end of 2021, the EU was a medical-only cannabis market. However, 2022 welcomed a host of legislation reviews and promises toward legalizing recreational Cannabis. Thanks to the recent developments, it’s become clear that there’s much to do to standardize, stabilize and scale the industry.
In December 2021, Luxembourg legalized growing Cannabis for recreational purposes. A month earlier – November 2021 – the new German coalition government promised to legalize recreational Cannabis when their term began.
These, and some other news from different quarters of the EU, make it seem like there’s light at the end of the continent’s conservative tunnel. The first wave of cannabis legalization on the continent was for medical use, which took place between 2018 and 2021.
Different events posit that a new wave of recreation-focused legalizations will come into effect in 2022. The developments are worth getting excited over, and this article explores every detail EU consumers need to be privy to.
Expounding on Luxembourg’s cannabis legalization
Luxembourg is one of the few countries whose recreational cannabis efforts are expected to create a domino effect in Europe. According to a report, residents above 18 can grow a maximum of 4 plants for personal use. Users will also be allowed to carry about 3 grams of Cannabis in public.
According to another version of the report, the THC (tetrahydrocannabinol) component of Cannabis will no longer be regulated. Though, some public areas will remain restricted – consuming Cannabis in such areas will attract fines.
This is a huge shift for a country previously known to fine up to €2500 for cannabis possession.
Furthermore, the new regulation decriminalizes the substance’s production, sales, and distribution to the public. The new development opens up a new government-controlled cannabis economy, which is partly aimed at addressing the problem of drug-related crime in Luxembourg.
The international realities surrounding Luxembourg’s decision will be helped by the new German government’s steps toward decriminalizing recreational Cannabis.
Focusing on Germany
Medical Cannabis has always been the standard in Germany. However, the new coalition government promised the citizens to ensure the legalization and market regulation of Cannabis in the country.
This announcement has since reflected a reduced politicization of the cannabis debate in European society. Many experts believe that it’ll set precedence for other countries on the continent.
Since the announcement of the decriminalization plan, many medical cannabis companies are positioning themselves to lead the country’s effort toward recreational Cannabis. The coalition government promised to come through on its promise during the current term, but there’s still no concrete roadmap toward reality.
Beyond the 2020 draft bill proposing adult access to Cannabis, there have been no new proposals relating to the government’s promise. However, in the past couple of months, there’s been a series of closed-door expert testimonies to lawmakers by the government. This is the first step toward legalizing the product, and it’s left to see how the government will proceed.
A study posits that enacting a recreational cannabis reform in the country could add about $5.3billion to her tax revenue while creating over 27,000 jobs. This national effect is on a grander scale compared to what countries like Malta will experience, despite being at the forefront of introducing a modest playbook other European countries may go by.
How Malta fits into the picture
Malta is the first EU country to legalize recreational Cannabis. But the legislation has been fashioned to curtail potential catastrophe. Personal-use Cannabis is decimalized on the island once it’s not for sale. So, citizens can use Cannabis personally or in social clubs but can’t sell it.
Starting from December 2021, the government allowed citizens to home-grow a maximum of six plants. Users are also allowed to carry 7 grams of the substance on their person in public. The legislation also established a dedicated government authority. Finally, citizens can create social cannabis clubs.
Achieving this feat hasn’t been easy, as the government has made its recreational cannabis intention known since 2017. Five years later, the government has finally pushed through on the four pillars of its cannabis reform bill: cultivation, possession, consumption, and association.
Though the ‘association’ aspect of the bill is directly premised on the Spanish Social Clubs template, it’s a welcome development that further secures the place of recreational Cannabis in European society.
The cannabis laws in Spain
Recreational Cannabis is decriminalized in Spain for every purpose other than sales. You can grow, use, and even form social clubs for Cannabis. However, you can’t sell. The country allows citizens to hold up to 100 grams of Cannabis in a private place. For context, Malta only allows up to 50 grams in homes.
A major aspect of the Spanish Cannabis legalization is ‘Social clubs.’ Though these non-profit organizations were first created in 1991, their existence wasn’t legalized until recently. Upon legalization, the social clubs’ template is being replicated in other countries and is fast becoming a regulated alternative to commercial recreational Cannabis in Europe.
While the country hasn’t out-rightly legalized recreational Cannabis, it has decriminalized the cultivation and personal usage of the substance.
What’s Portugal doing about recreational cannabis?
In 2018, Portugal legalized medical Cannabis, which has since become a major playground for US and Canadian companies. These companies have ensured a constant inflow of investment into the country’s cannabis market.
But despite being a leader in the European cannabis scene, the country has struggled to regulate the market. Recent bids to put structure and firm control over the market have seen the proposal of two draft cannabis-related bills in the country. These bills are designed to allow for personal consumption, cultivation, and possession.
Unfortunately, these bills have lacked momentum due to government instability and the devastating effects of the COVID-19 pandemic.
The reality in Italy
Recently, there’s been a referendum to legalize domestic cannabis cultivation in Italy. The referendum will further decriminalize the possession of the substance. This referendum comes after several failed attempts at legalizing Cannabis and aims to amend the country’s narcotics law.
If the ballot process passes, citizens will be urged to vote in favor or against the referendum. According to the country’s Prime Minister, there’ll be no move by the coalition government to block the cannabis referendum. There’s no indication that the opposition (right-wing) party will stand against the referendum. The bill will fall victim to politics, and the world can only wait to see how the game plays out.
Other countries taking positive steps for recreational cannabis
Despite their issues, Canada and USA are leaders in the legal Cannabis market. Many European countries are pulling legislative weights to avoid being left behind. Despite medical marijuana being licensed in most countries of the continent, the market remains dominated by foreign companies. If local companies have a chance at scale, giving the nod to recreational Cannabis is important.
For the Netherlands, the first step toward recreational Cannabis is to experiment. The country already started experimentation by supplying the substance to coffee shops, with a system designed to monitor what the effects would be.
For France, the journey ahead remains a long one. The regulations around medical Cannabis remain restricted. Though, as part of an effort to better understand the market, the country put forward a two-year pilot experimental program where it supplies about 3000 patients with medical Cannabis.
Impact of the new wave of recreational cannabis legislations
Currently, Europe’s regulatory and functional cannabis sphere remains fragmented, just as it is in North America. Though, the continent remains slightly behind its western counterpart. But if governments play their cards right, it won’t be long before the continent becomes a force to reckon with in the cannabis market.
A major share of Europe Cannabis is built on illegal trade, even for medical Cannabis. Reports have it that €354 million worth of illegal medical Cannabis is expected to trade on the European market in 2022. The report further predicted the figure rising to about €2.3 billion in 2026. But with legislation efforts ramping up, things should start moving better on the legal side.
According to experts, the new wave of legislation on the continent will lead to more investments, mergers, and acquisitions. In an interview with TechCrunch, Todd Harrison said, “our belief is that M&A will be front of mind for all legal cannabis operators. The difference in Europe is that there is opportunity for non-cannabis players to potentially get strategic and attempt to the market through the integration of Cannabis as a CPG (consumer package good) or pharmaceutical-grade option.”
From Todd’s statement, it can be deduced that European industry experts are predicting fierce competition in the next few years, and this is nothing but good news. Competition is good for the speedy maturation of any nascent market.
Furthermore, trade laws within the EU are also expected to facilitate market growth once more countries legalize recreational Cannabis. According to David Bonnier, founding partner at Enexis AB, “you can produce Cannabis, for example, in Portugal, and sell to any EU country as long as you have export/import licenses. Hence, since cross-border European commerce is relatively fluid, companies can scale relatively quickly if they know what they are doing.”