COVID-19 Affecting Europe’s Cannabis Market, Delaying Legalization – for Now
By Oliver Bennett, Special Contributor for New Frontier Data
The COVID-19 pandemic has taken a severe toll on many industries – including the European cannabis sector. When the coronavirus hit the continent in the winter and spring of 2020, many planned investments and bullish expectations for a bumper year were thwarted. Also, an epoch-defining health emergency created by a virus affecting the respiratory system made it difficult for cannabis advocates to promote legalisation.
A bumper agenda of planned cannabis industry trade events was mothballed. Among key postponed conventions were Berlin’s second International Cannabis Business Conference (ICBC), the debut of an ICBC event in Barcelona, IndicaSativa in Bologna, Italy; and London’s three-day CBD Show, now rescheduled for January 2021.
Much-anticipated policy directives and production plans also lost prioritization as energies were redirected toward fighting the coronavirus. Luxembourg did not legalise cannabis as expected, France’s eagerly awaited medical cannabis program dragged its heels, and Germany’s first domestic cannabis harvest faltered. Though some normality returned after a first stand of shutdowns, the pandemic’s second wave has put much of Europe into lockdowns both national and regional, with some countries like Spain implementing draconian curfews to forestall any optimism that the winter might deliver any respite.
Indeed, now fears fester that the pandemic may have a deeper effect on the progress of the industry. The slowdown is consistent with New Frontier Data’s prediction of the pandemic hampering European legalisation efforts, leading to delays and driving consumers back toward the unregulated market. Indeed, early in the crisis (i.e., between the past January and March), cannabis consumption rose with users’ buying €4.3 million worth through Cannazon via the dark web, using encrypted communication services or social media apps. Meanwhile, a European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) report found that cannabis use had increased during lockdown. The social disruption also seemed to have an effect on the kinds of recreational drugs consumed, with reported use of cannabis and benzodiazepines increasing while cocaine use dropped. Whether consumption was more affected by interrupted supply chains or imposed domesticity remains uncertain, but the pandemic undeniably tore into existing legal and grey markets. Closures among Spain’s cannabis clubs caused supply difficulties among medicinal and recreational markets alike as some 300,000 club members sought out illicit sources, leading to increased trafficking and prices tripling. The clubs have suffered legal ambiguities during both lockdowns – though the later constraints are now more similar to those in the hospitality industry, with state-recommended measures being observed.
Some clubs like Dr Dou have risen to the marketing challenge with branded masks, while others began offering patrons “limited stays” of 15 to 20 minutes. In the Netherlands, the iconic coffee shops closed for the first lockdown, but reopened following public pressure, and are now allowed to sell cannabis until 8 p.m.
While the industry has undoubtedly suffered a serious downturn, glimmers of optimism for Europe’s cannabis scene remain, including expectations for the pandemic to spur emerging legal cannabis markets, and potentially provide impetus for medical research and development. Facing pressure from domestic interest groups, France’s government has been urged to move forward with its experiment, recently signing a decree to relaunch by March 2021. In a webinar hosted by Medicinal Cannabis Europe, participants asserted that the pandemic affords the EU an opportunity to allow more patient access and harmonise its medical cannabis policies – long a bugbear in the fragmented European space. Furthermore, as one participant put it, it serves to “prove [that] prohibition does not work… COVID is evidence to show it’s time to legalise cannabis.”
Economists and advocates have also suggested that legal cannabis may prove to be one of the industries to lead economies into reconstruction, with legalization to “become a key talking [point] … as states look to reinvigorate damaged economies reeling from the lockdown-induced recession.”
Such has already been discussed in the U.K., where this winter’s combination of a looming Brexit and ill effects of COVID-19 have led to cannabis being included for consideration in a reconstruction strategy.
Intriguingly, there are also suggestions that medicinal cannabis and CBD might help treat COVID-19 symptoms themselves, leveraging cannabis’ vasorelaxant and anti-inflammatory properties for patients while meantime playing a well-attested role in reducing pain and anxiety. There is already R&D innovation in seeking methods for cannabis to provide aid amid the pandemic, with Canadian researchers from the University of Lethbridge studying its potential for preventions against the coronavirus.
Suffice it to say that the cannabis industry has been stress-tested throughout an unpredictable year, and responded with innovation while even heightening demand. As Europe moves towards 2021 and persists against the crisis, the cannabis industry is likely to become better appreciated as part of medical care while asserting itself as a serious instrument of economic reconstruction.