Understanding The European Cannabis Industry
February 5th, 2019
Europe as a medical cannabis market is opening in 2019. That is an easy prediction to make given all that is afoot. The European Parliament is debating the issue. That in itself is also pushing the UN. Individual countries across Europe have begun to make declarations, even if not so definitive as Luxembourg (see Switzerland, Spain and Greece) that major reform is on the roadmap over the next five years. Even the long-stalled German cultivation drama appears to be headed into the curtain call of its first act this spring.
Not to mention what the Brexiting UK might do, in the throws of extremis and when access to imported basic food and medicine is now absolutely thrown into doubt.
There are many, many optimistic signs afoot from the viewpoint of the cannabis industry and investors, in other words, even for not always positive reasons, that Europe is budding and this is a banner year.
For all the optimism, however, there are issues that the often giddy business analysts and mainstream media (in any language) are often NOT covering. And this too will also begin to show up, dramatically, starting with the ever important metric of patient numbers. It is also precisely the kind of thing that U.S.-based and other funds now looking at the terrain need to know.
Medical Cannabis Is The Only Game In Town For At Least Two Years
Luxembourg’s announcement that they were putting recreational reform on the agenda woke up the imagination of the North American press (if not industry). Plans are already hatching in the text of such articles, at least, for “US imports” bound for Luxembourg and Switzerland if not Holland and Greece beyond that. That includes producers from all states in the U.S. union, of course, but also includes tech companies from California and Canada.
However, even that dramatic pronouncement should be tempered with extreme caution.
Luxembourg is a tiny country. Looking to Canada for an example of how to transition to a recreational discussion is also at least a two year time period that will not end until 2020 at the earliest. California state law (on privacy to banking) is also not robust enough for central European if not British bankers (who still need passporting and trusted nation status). Want to hit coffee shops in Europe? Best place is still Amsterdam, and look what a mess that has turned out to be. Barcelona is Spanish Boulder. Federal recreational reform, no matter now introduced as bills in several federal legislatures across the Eurozone, is at least five years off – and in most places.
Europe, in other words, Dorothy, ain’t Kansas. Or Canada for that matter.
Health Insurance Coverage Is An Issue
While it may sound like manna from heaven to think that “public” health insurers in Germany, much less the beleaguered NHS will “pay for pot,” this idealized dream is actually the fact for a very small number of patients on a country-by-country basis. And that is what counts. Also remember that the average “cost” to either a patient or insurer here is about $3,000 a month. While people on statutory health care who get coverage have to pay about $15 per month as their copay, that still means insurers are at the end of a very expensive bill, that is also reserved pretty much for “the disabled.” And both patients and doctors who are successful, first have to engage in a paper storm that is significant (and where doctors are also reimbursed a pittance that has not been increased since the mid 80’s).
Where patients and doctors have reached compromises (in prescription and approvals), this has started to show up in the numbers. But this is absolutely slow going over rough territory. And not the kind of information that qualifies as “the fancy stuff” for corporate reports until some of the regulatory thicket around this entire conversation begins to be better defined and reformed.
Here are some sobering facts. The average patient in Germany (read Europe and the UK) is sick, poor, and has to battle through doctor approvals, doctor error and an extreme reluctance to cover the drug. It is classified in Germany (for example although this is essentially true across Europe), as a drug of last resort, an off-label medication for every condition except MS, and a narcotic. In the UK, they may issue “Schedule II” prescriptions, but basically, so far at least, so what?
For all of these reasons, the situation is more complex than merely patient counts.
Furthermore, “acquiring patients” by any producer or distributor – a model seen in the U.S. and Canada, will not work in any part of the EU or surrounding countries. German pharmacies are also a part of the equation in a way that is forcing everyone to up if not change their game.
CBD Entrance Is Also Strewn With Obstacles
Entering Europe with a CBD play is also not for the faint of heart. Seen at least last year as the way to get a “foot in the door,” even larger companies from overseas have stumbled. CBD has many issues that start with the question of “novel food” and end with the fact that “wellness” here, as it is everywhere, depends on consumers beyond patients to play along. It is clearly coming, but that, like McDonalds, will have to find its entry point in the market.
Digital Healthcare Comes With Regulatory Landmines In Several Directions
The ideas about “digital healthcare delivery” that include discussions of “doctor chats on Skype” (scarily even coming out of the mouths of senior British ministers at present), to the association of “home delivery,” of cannabis via Uber from a colorful dispensary will not happen in the EU. Anywhere. Including the UK. At least until some big network security, banking, insurance and other issues are ironed out.
Central to all of these problems is understanding of a new law here in the EU that North America is just hearing about. Violate that and you are looking at 4% of global revenues per fine. Don’t believe it applies to you? Think again. Google just got hit in France. It also applies to telco. I.e. – no doctor Skype. And certainly no Uber delivery via Amazon webstore. In Germany at least, such trips and deliveries must happen by regulated, union driven service. And “online pharmacies” (as Auslandersunderstand the same), are verbotten.
From the perspective of investors, in other words, the European market is absolutely ripening with possibilities. However, there are many minefields in such newly opened battlegrounds (because that is what the regulatory environment looks like on the financial, security and overall regulatory front). And not always alot of accurate information.
Bottom line on Europe? Do your normal risk analysis, and find the right technical and legal help.
Go native, in other words. Befriend some locals. And ask alot of questions.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
Follow Us on Social Media
About CFN Media Group
CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.
Disclaimer: Matters discussed on this website contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time-to-time have a position in the securities mentioned herein and will increase or decrease such positions without notice. The Information contains forward-looking statements, i.e. statements or discussions that constitute predictions, expectations, beliefs, plans, estimates, or projections as indicated by such words as "expects", "will", "anticipates", and "estimates"; therefore, you should proceed with extreme caution in relying upon such statements and conduct a full investigation of the Information and the Profiled Issuer as well as any such forward-looking statements. Any forward looking statements we make in the Information are limited to the time period in which they are made, and we do not undertake to update forward looking statements that may change at any time; The Information is presented only as a brief "snapshot" of the Profiled Issuer and should only be used, at most, and if at all, as a starting point for you to conduct a thorough investigation of the Profiled Issuer and its securities and to consult your financial, legal or other adviser(s) and avail yourself of the filings and information that may be accessed at www.sec.gov, www.pinksheets.com, www.otcmarkets.com or other electronic sources, including: (a) reviewing SEC periodic reports (Forms 10-Q and 10-K), reports of material events (Form 8-K), insider reports (Forms 3, 4, 5 and Schedule 13D); (b) reviewing Information and Disclosure Statements and unaudited financial reports filed with the Pink Sheets or www.otcmarkets.com; (c) obtaining and reviewing publicly available information contained in commonlyknown search engines such as Google; and (d) consulting investment guides at www.sec.gov and www.finra.com. You should always be cognizant that the Profiled Issuers may not be current in their reporting obligations with the SEC and OTCMarkets and/or have negative signs at www.otcmarkets.com (See section below titled "Risks Related to the Profiled Issuers, which provides additional information pertaining thereto). For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity-based compensation in the companies it writes about, or a combination of the two. For full disclosure, please visit: https://www.cannabisfn.com/legal-disclaimer/. A short time after we acquire the securities of the foregoing company, we may publish the (favorable) information about the issuer referenced above advising others, including you, to purchase; and while doing so, we may sell the securities we acquired. In addition, a third-party shareholder compensating us may sell his or her shares of the issuer while we are publishing favorable information about the issuer. Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.cannabisfn.com/legal-disclaimer/.