The legal cannabis industry is set to be worth a staggering $84bn by 2028, according to new analysis.
A report by Grand View Research, US-based market research and consulting company, predicts favourable regulatory changes will continue to fuel growth globally.
The report’s authors point to movement on medical cannabis laws and Europe’s designation of CBD products as novel foods as key drivers in the near future.
In 2020, the legal cannabis trade was worth around $24.6bn.
North America, which has seen a wave of liberalisation in recent years, continues to dominate the market and is home to over 90% of cannabis revenue.
But the report singles out the UK as a ‘promising market’ along with Germany, Australia, Mexico, Colombia and Israel.
In 2020 alone, the UK has seen a wave of listings on the LSE by cannabis companies, a change in CBD regulations expected to boost consumer confidence and was singled out by a UN drugs report as being a major producer of cannabis.
A report summary states: “These countries have started indigenous production, and therefore these countries are secondary markets expected to become viable in the coming years.
“Furthermore, the market demand is expected to surge rapidly due to changes in government policies.
“Several new startups are venturing in the research & development and manufacturing of cannabis.
“The number of applications for which marijuana is prescribed is expected to increase, thereby opening up new revenue channels for the players in various countries.
“This eventually is expected to influence the growth of the market.”
Much of Europe is still some way behind North America and Canada on recreational use, which accounted for 60.3% of the total market in 2020 owing to ‘high demand among millennials and patients who do not qualify for medical cannabis’.
Like the vast majority of businesses, the cannabis industry has been slowed down by the the Covid-19 pandemic, according to the report.
The authors state: “The Covid-19 pandemic has disrupted the supply chain management of cannabis products.
“Due to the strict lockdowns across the globe, the supply of cannabis in dispensaries has reduced. Moreover, the Covid-19 pandemic has hit the export business.
“The disruption in the supply chain caused due to lockdowns in major countries has affected import as well as export business.”
Panaxia to expand its Malta production plant with $6m investment
Panaxia’s investment in the country is a “milestone” for Malta’s medical cannabis industry, says Minister for the Environment, Energy and Enterprise.
Israel-based Panaxia is set to expand its medical cannabis production facility in Malta and will export its first products to Germany in the coming weeks.
Panaxia is set to deepen its connection with Malta as it plans a further expansion to its local production plant now the company has obtained its EU-GMP licence.
The company received an official license from the health authorities in Malta to manufacture finished medical cannabis products in May, 2022.
The news of Panaxia’s $6m (~£4.95m) investment was announced during a visit to Panaxia’s Ħal Far plant by Malta’s Minister for the Environment, Energy and Enterprise Miriam Dalli.
Panaxia aims to enrich the Maltese production portfolio with products aimed for both Europe and Latin American markets. To do this, its Malta facility will diversify into an array of products ranging from the production of tablets, oil and extracts, as well as carrying out clinical trials, stability experiments and research and development.
Minister Miriam Dalli described Panaxia as an early success story for one of Malta’s newest economic niches.
Minister Dalli commented: “Malta Enterprise has been in discussions with Panaxia since the early days after the enacted legislation in 2018. Today, Panaxia is only marking the start of its actual production, but it is already planning an expansion in its facilities.
“This is another milestone reached for our medical cannabis industry – an industry which further enriches our wider pharmaceutical sector. Malta is the ideal location for such operations, whereby specialised products are developed for the global healthcare supply chain.”
CEO of Panaxia, Dadi Segal, commented: “I am impressed with the role of Malta Enterprise in their support to our Malta team at Panaxia on various levels, not just the financial assistance but also the constant communication and facilitation.
“We had to build this facility from scratch and the process was long but soothed through Malta Enterprise’s constant guidance.”
Panaxia also operates from locations within the United States, Canada and South Africa, and is currently in the process of registering products in Portugal, Greece, Poland and Brazil amongst others. Its range of pharmaceutical products, over 60 in all, are mainly based on cannabis plant extracts and treat a variety of ailments including nausea, anxiety and depression.
Cannabis extract registered in Poland by Curaleaf International
The landmark registration signifies Curaleaf’s continued expansion into Europe.
Curaleaf International has registered its cannabis-based medical extract in Poland with local partner CanPoland SA.
Curaleaf International’s product registration in Poland will help to meet increasing demand for cannabis medicine in the country. According to Prohibition Partners, Poland is currently one of Europe’s largest medical cannabis markets by patient size. Its market is expected to reach €2bn (~£1.69bn) by 20282.
The licensed product, which is 100 per cent European sourced from plant to manufacture, is part of Curaleaf International’s proprietary product range that has now launched in five key European markets, including the UK and Germany.
Curaleaf International president, Miles Worne, stated: “This licence in Poland is another sign of Curaleaf International’s strong momentum in Europe. The medical cannabis market in Europe continues to expand rapidly, as regulation opens up and access for patients improves.
“Since the legalisation of medical cannabis in 2017, Poland has become one of the largest European importers of dried flower and is an excellent addition to Curaleaf International’s expansion, given its fast-growing patient numbers and significant addressable market.
“Curaleaf International is driving growth in existing key markets, with the UK in particular witnessing a huge increase in patient numbers, whilst continuing to drive expansion into new markets across Europe.”
Curaleaf International has also recently announced registrations of products in Malta, and was the first company to register a THC cannabis extract Active Pharmaceutical Ingredient in Italy.
The company has stated that this news, along with the opening of the Swiss medical cannabis market and Curaleaf International’s renewing of its GDP licence in Switzerland, is an example of where the company is ideally positioned to capitalise on positive market movements across Europe.
Medcolcanna signs European medical cannabis sales agreements
The company has entered into sales agreements with German company, Greenstein, and Cantourage.
Canada-based globally integrated medicinal cannabis company with operations in Colombia, Medcolcanna, has signed two EU sales agreements for EU-GMP and CUMS-IMC certified dried flower.
Medcolcanna has signed agreements with German-based Greenstein, as well as Berlin-based Cantourage.
The sales agreement with German-based Greenstein has a three-year term, with the possibility of extension, and establishes a minimum purchase of 1200 kg during the first year, 2000 kg during the second year and 2,500 kgs during the third year.
Its sales agreement with Cantourage for Germany and the UK has a five-year term, with the possibility of extension. The initial forecast presented by Cantourage establishes approximately 800 – 1000 Kgs for the first year.
Cantourage will distribute the flower through its proprietary clinics and distribution in the UK and through its network of pharmacies in Germany. Medcolcanna has developed a new brand for distribution with Cantourage in UK and Germany, followed by Poland within the next few months.
Six Medcolcanna proprietary strains have been already registered with the German Narcotics agency, and the production will be based on supply from the Medcolcanna farm located near Bogota. Additionally, THC quotas have been granted by the Colombian Government and are in place with the first exports expected by October to November 2022.
CEO Felipe de la Vega commented: “It has being a long and difficult journey since we created the company. A market that we were trying to understand and anticipate but that was being created. Therefore, making decisions was more complex.
“CBD market for extracts and isolates became very competitive with the US hemp farm bill affecting projections. The market for THC extracts is highly regulated, requires multiple certifications and a lot of investment, and still is a very small market compared with flower.
“Now the approval of flower export has allowed us to really gain traction in Colombia supply, as a high quality, low-cost producer, and the result of it is the multiple contracts we have now in place and we continue to negotiate. Starting November 2022, we expect recurrent revenue with high margins and good profitability.
“This combined with internal decisions that have helped us to reduce our G&A and cash burn makes our company a sustainable and profitable target for investors and we are pretty confident that before the end of the year we will be in a completely different situation.
“We continue supplying internally medical formulations currently approximately 300 per month and growing at 15 per cent per month. Now we are really getting to an interesting point for the company, with a very clear path forward and the possibility to generate profits for our investors.”