50 New Cannabis Markets Globally

By J.J. McCoy, Senior Managing Editor, New Frontier Data

If 2019 proves too preliminary for historians to describe it as the tipping point in the founding of a global cannabis industry, it will not be for lack of trying.

Recent news of Thailand and South Korea becoming the latest countries to adopt the use of cannabis for medical purposes reinforces the remarkable, expansive rate for global acceptance of cannabis. In 2018, high courts in both South Africa and Mexico ruled cannabis as legal to grow for private, personal use. Medical cannabis is now being officially regulated among more than 50 countries, including more than two dozen amid Europe where a growing number of countries allows its use for treating a range of medical conditions.

This month, Israeli cannabis researchers are reportedly planning to host Chinese businessmen and academic researchers looking to learn about Israel’s pharmaceutical applications and emerging technological innovations. According to New Frontier Data’s analysis, China already controls more than a third of the global hemp market, an arena only looking to swell exponentially after passage of the U.S. Farm Bill last month will let American farmers compete at home and abroad for the agricultural commodity.

Within the United States, since California in 1996 became the first state to legalize cannabis for medical use, a total of 33 states (and the District of Columbia) now allow it toward the treatment of more than 60 unique qualifying conditions. Meantime, 10 states (and D.C.) representing more than half of the U.S. populace now enjoy access to legalized cannabis for adult use, with positive polling (and more politicians) suggesting others to follow.

Likewise, cannabis is now legal for either medical or adult use in more than four dozen other countries worldwide. An estimated 1.2 billion people (15.3% of the world’s population) suffer from some condition now commonly treated with medical cannabis in markets having legalized its use and sale for medical purposes.

In Europe alone, there are 29 countries with some form of legalized medical use (see today’s related CannaBit chart). Georgia remains the only one with fully legalized adult use, though places like Spain and the Netherlands show some elasticity to their rules. Selling cannabis is technically illegal in Spain, though the country features more than 800 pseudo-private clubs where some simple paperwork can earn one a membership. Similarly, cannabis is technically outlawed in the Netherlands, too, though selling it is illegal but unpunishable, so police generally tolerate it so long as shops do not advertise it or cause a nuisance. Their famous coffee shops even allow non-residents to purchase cannabis.

Among countries where it is legal at the federal level, Germany is expected to become the top international market for medical cannabis. New Frontier Data estimates there being roughly 4.7 million cannabis consumers (in the legal and illicit markets combined) using an estimated 1.9 million pounds of it annually.  Germany has the largest population in the European Union, and it makes medical cannabis easily available (through more than 20,000 pharmacies nationwide), creating a fertile environment for the growth of its medical market.

Switzerland is another example of a European country “cranking it up” over cannabis, according to Tony Sampios, New Frontier Data’s Managing Director, Europe. “Swiss specification of CBD flower and oil is on a par with Canada’s, if not better,” he explained. “Canada Health, for instance, would happily do procurement supply with Switzerland if regulation let that happen. Which it doesn’t yet, although there is pressure by lobbyists to make that happen.”

Yet, as things stand Europe’s limited production capacity is attributable to challenges in creating politically acceptable and enforceable regulations, some underestimation of initial patient participation in recently opened markets, and reliance either on too few, or ill-equipped centralized suppliers. While the scaling up of European domestic production capacities is inevitable, and European markets will come to rely less on imports, Canada for the near foreseeable term will maintain its strong lead advantage for legalized cannabis.

Of course, Canada last fall became the world’s largest economy to go fully legal nationwide. Its 10 provinces and three territories each have their own rules for purchasing and consuming cannabis, and variations likewise exist concerning possession limits, venues where people may consume it, and whether the drug is sold by private retailers or government-run stores. Industry experts are predicting that 2019 will be the year for cannabis production to assert itself in Canada, with growing operations in a rush to scale up while efficiently cultivating high-quality crops products, and distribution deals to serve the geographically dispersed market. In the coming year, businesses will refine their models in pursuit of these objectives, and in doing so open the gates for billions of dollars in additional annual sales.

Cannabis regulations in Europe will enable far greater participation by biotech and Big Pharma companies than has been seen to date in the U.S. The speed of their entrance to the market, and the types of innovation they will advance, remain to be seen. Since the illicit market is exponentially larger than legal ones globally, it also remains to be seen just how vast the true worldwide demand might be. Tilray CEO Brendan Kennedy recently told Fortune magazine that he expects the number of countries with legalized medical cannabis to pass 70 by 2021, which is when he also expects the U.S. to legalize it nationwide, joining its bordering neighbors to the north and south.

These are just some of the developments that will be central to New Frontier Data’s continuing market analysis and updates throughout 2019 and beyond.