Recalling an Unprecedented Year That Was for Legal Cannabis

By Oliver Bennett, Special Contributor to New Frontier Data

At its outset, 2020 seemed full of promise for Europe’s legal cannabis industry. By February, however, two cluster of cases of COVID-19 had been detected in Germany and France, and from there setbacks increasingly ensued across the European cannabis sector still plagued by the pandemic 10 months later.

Among the positive signs in the industry a year ago were new verticals such as the growing pets market for CBD, drinks and edibles. The potential for new taxation and revenue streams from the burgeoning industry was discussed as the industry scaled up. But as realities of the pandemic took hold, activity slowed. An unprecedented number of planned cannabis industry trade events were cancelled , while urgent meetings about the best ways forward were convened.

Soon, social side effects from the pandemic also began presenting themselves. By May, following two long months of lockdowns throughout Europe, we reported that cannabis use had actually increased during lockdown (as it had in North America), suggesting that its array of anecdotal benefits for recreational use, wellness, and self-medication were becoming more accepted among the mainstream.

One ongoing issue for the CBD sector was contention about acceptance of the cannabinoid for a novel food categorisation from the European Union (EU), which would have been precluded were it officially  categorised as a narcotic. Due to the impasse, applications for novel food categorisation stalled through the summer, but found resolution by November through an unexpected decision when the European Court of Justice (ECJ) overruled France’s national laws in the case of the product KanaVape, and determined that CBD should not be considered a narcotic. The impacts of that ruling are still being processed, but seem certain to help CBD products cross borders and reach markets in Europe’s more conservative countries. The development will also have beneficial implications for packaging as the CBD consumer industry grows – although issues surrounding advertising remain unresolved in many territories.

Hopes for 2021 include greater convergence in the marketplace, as the European market is still plagued by inconsistencies that interfere with investment.  Issues of civil enforcement (including driving) also stir consternation and debate, with wide discrepancies between  safety concerns and civil liberties manifesting themselves as medical cannabis patients increase, and swell the ranks of drivers and office workers testing positive through mandated drug tests.

Some divisions and occasionally deep inconsistencies are found between countries; in October it was noted how the Netherlands is trying to resolve the grey area between its legal recreational trade and its illicit “back-door” suppliers, by allowing some North American providers to supply its market. The Dutch story also raised questions about the poor supply of medical cannabis against rising demand. The issue took on vital importance when Germany (as Europe’s biggest market), saw its plans to produce more of its own medical cannabis stall – though at year’s end, domestic supplies look once again to be in place. In Spain, controversy arrived when (as with the rest of the hospitality sector) the nation’s cannabis clubs were forced to close, causing supply difficulties in the medicinal and recreational markets, and pushing 300,000 club members to rely on illicit sources, instead. Similarly, the Netherlands’ iconic coffee shops were closed in initial lockdowns, but were later allowed to sell cannabis until 8 p.m. – a concession to their importance for customers, and possibly also to state revenues.

Eyeing the hungry supply chain, newer European providers jockeyed for position. Poland’s hemp industry grew more confident, while other Eastern and Central European countries like Macedonia expanded their industries, aided by overseas investors. Yet, imports remained key, so in May a surprise shipment stirred headlines when almost 1.5 metric tons of high-THC cannabis flower docked in Portugal from Uruguay, following an earlier 1-ton shipment. The consignment remained a mystery before it was traced to the German market, but it also shone a light on the growing industry in Portugal, a country with growing interests in the global industry as well as a climate propitious for the cultivation of cannabis.

Luxembourg, once expected to become the first full country to legalise cannabis in Europe, did not quite deliver due to the pandemic. Undeterred, Israel instead became the world’s third country to legalize recreational cannabis. A nine-month plan will make the plant legal in Israel by Q2- or Q3-2021, with its adjacency to Europe expected to make waves across the Mediterranean.

Thus, despite historic disruptions from the worst global pandemic in a century, a general mood of optimism about the European cannabis industry persists; indeed, some experts expect the pandemic to hasten the acceptance of recreational cannabis and add pressure to push for advances in medical R&D.

As the rollout of vaccinations begin, cannabis is drawing some recommendations as an economic means to stem the ravages of the pandemic, and revive socioeconomic fortunes through monetizing CBD, hemp, and medical cannabis. That potential remedy is particularly gaining popularity in the U.K., as resolution of Brexit is imminent, releasing it from the obligations of the EU.

Perhaps the biggest cannabis-related development of 2020 was saved for last, as the United Nations voted after nearly six decades to reclassify cannabis from Schedule IV of the 1961 Single Convention on Narcotic Drugs.

Thus, as the year ends and planning rolls into 2021, advocates and stakeholders for the legal cannabis industry are presented with a gift of unprecedented international symbolism, and a cornucopia of practical implications for cannabis regulation worldwide,