Europe’s Cannabis Industry Could Exceed €18 Billion
May 23rd, 2017
Policy, Top News
North America has been leading the charge when it comes to legalizing cannabis. The highly-fragmented United States’ cannabis industry is expected to grow from $7 billion in 2016 revenue to more than $50 billion in annual revenue over the next decade. In Canada, Deloitte projects that the industry will reach C$20 billion within a year after the federal legalization of recreational marijuana that’s expected by early next year.
European cannabis consultants, Prohibition Partners recently released The European Cannabis Report, which provides detailed information covering major European markets and investment opportunities within.
CFN Media readers on CannabisFN.com can sign-up to receive this free report here: http://promo.cfnmedia.com/europe.
What Are Europe’s Largest Markets?
The European cannabis industry is highly fragmented, based on the political ideologies within each country rather than a country’s total economic output. For example, Germany has the largest economy in Europe by a wide margin, at €3.3 trillion, but is projected to be the fifth largest recreational cannabis market, after France, Spain, and others, given the anti-cannabis sentiment relative to other countries located throughout Europe.
The cannabis industry in many of these European countries is relatively underdeveloped with the exception of countries like the Netherlands. Once larger countries like France and Germany take action, the market could quickly evolve as it has in Canada and the United States.
Investment Opportunities in Europe
There are many different opportunities for investors in the European cannabis industry, particularly given that it’s relatively young.
Prohibition Partners believes that the cannabis value chain will evolve along the lines of other agricultural cash crops like corn, coffee, or tobacco. The most important sub-segments will be production, processing, distribution/retail, and digital/analysis. Investors may want to keep an eye on opportunities in each of these areas while keeping in mind that the value is likely to be achieved incrementally between these areas of the industry.
CB Insights recently published a great infographic that details the various companies involved in the cannabis industry within each segment.
The most important hurdles for investors to watch will be the same hurdles faced in North American markets, including banking access, investment support, shifting consumer perception, advanced clinical research, and general legislative issues.
Prohibition Partners expects the European cannabis industry to reach €18 billion in size over the coming years, which translates to a significant opportunity for investors given the early stage of the market. Investors may want to consider the growing number of North American companies that could enter the market or domestic companies that sprout up to take advantage of the changing laws in various subsets of the market.
For more information, CannabisFN readers can sign-up to receive the The European Cannabis Report from Prohibition Partners here: http://promo.cfnmedia.com/europe.
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