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New Frontier Data report explores cannabis growth and market trends

New Frontier Data’s cannabis report features analysis of the cannabis markets across the globe.

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New Frontier Data report explores cannabis growth and market trends

New Frontier Data’s new Global Cannabis Report: Growth and Trends Through 2025 features extensive analysis of both the legal and illicit cannabis markets in Europe and further afield.

The global cannabis report has been published two years following New Frontier Data’s previous global analysis of the industry. The industry has seen huge advancements in both regulation and growth since – which the report attributes to “growing acceptance of the plant’s therapeutic value, and recognition of the industry’s potential as a catalyst for economic growth.”

Importantly, the report notes the United Nations’ (UN) decision to reschedule cannabis by one level. Still classed as a dangerous drug, however, the report highlights that the UN’s decision, based on recommendations by the World Health Organization (WHO), recognises that the dangers related to cannabis have been overstated.

The report states: “The vote was based on a series of cannabis liberalisation proposals submitted by the World Health Organization (WHO), and although the UN rejected all the other WHO cannabis-related proposals (including to remove CBD entirely from the schedule of narcotic drugs), the vote was still an important milestone as a tacit acknowledgment by the global body that the dangers to cannabis had long been overstated, and that the plant has more therapeutic value than previously recognised in the longstanding global framework of blanket prohibition.”

Changing regulations in Europe

New Frontier Data highlights that Europe’s “laissez-faire attitude toward cannabis” is slowly becoming more formalised, including the regulation of medical cannabis markets, highlighting Germany as currently having the largest medical cannabis programme, with a current total of 84,237 medical cannabis patients. This number is expected to grow to 260,000 by 2025.

In the UK, it highlights the country is now working toward allowing increased access to the medicine. 

The report states: “Notably, the debate to fully legalise cannabis for adult use has been comparatively muted in Europe, absent the social justice issues (e.g., racial inequity in cannabis prohibition) that fuelled legalisation in North America. However, there too, small movements for legalisation are taking place, with Germany positioned to take Europe’s lead in cannabis liberalisation. Four of the six parties vying in the country’s Bundestag – scheduled for September 2021 – support cannabis reform, making it the first time that cannabis reform will have broad-based support among the legislative body’s candidates. The election is likely to be closely contested, and if no party secures a majority, the leading party will need to form a coalition government, providing the smaller parties with stronger negotiating positions vis-a-vis drug policy reform. 

“As the EU’s largest economy, Germany’s passage of major cannabis reform would have significant implications for European drug policy, and the outcome of the election will be closely watched by cannabis policy reform advocates across the continent and abroad. If Germans elect a wave of pro-reform candidates, it will likely encourage political candidates in other countries to leverage cannabis policy reform as a means to galvanise young voters, reform-minded voters in particular.”

The growth of the European market

Specifically in Europe, the report highlights that the legal market is estimated to have a 19.7 per cent CAGR until 2025. It estimates the medical market to reach (USD)$722.6m and the legal adult-use market to reach $140.5m – a total of $863.1m across both markets by 2025. It also highlights that 6.1 per cent of the population in Europe uses cannabis every year.

Global spending on cannabis accounted for $415bn in 2020 for both legal and illicit markets, with Europe accounting for 19 per cent.

Currently – total spending on cannabis in Europe, which has an estimated 107,356 medical cannabis patients and 44.2 million cannabis consumers, is pinned at $79.5bn, with the average price of flower per gramme costing $11.35. This price point means the continent has the third most expensive high-THC cannabis market.

The United Kingdom

Following legalisation of medical cannabis in the UK in 2018, only a handful of patients have received prescriptions through the NHS, and families have continued to campaign for better access to the medicine for patients.

Despite this, the New Frontier Data report highlights how the country has since become a global leader in the manufacture of products containing cannabis extracts. This has created a split structure of the market in the UK between public and private, says the report, meaning only those who can afford a private prescription can access high-THC products. 

It states: “That regulatory approach has acted as a significant barrier for patient access to high-THC products, and has severely limited overall growth for the legal market.”

The report highlights that in 2020, of the UK’s 67.3 million population, there were 4.1 million cannabis consumers, of which 3,370 are medical patients, spending a total of $9.0bn at an average of $12.16 per gramme of flower. The report estimates the UK market to reach $29.3m by 2025. 

“For a country with a population of 67 million, and an existing cannabis consumer population of 4 million, that is an infinitesimal medical cannabis program participation rate,” says the report of the number of UK medical cannabis patients. 

Germany and the Netherlands

Despite the Netherlands ’ liberal history with cannabis, Germany now is at the forefront of the European medical cannabis market since it legalised use of the plant for medical purposes in 2017. 

New Frontier Data highlights that the country’s programme allows for insurance reimbursements for the product, with health insurance covering around 90 per cent of the population. Patients in the country are driving demand for cannabis products, with flower accounting for around 43 per cent of imported product in 2020, and extracts accounting for around 34 per cent, however, the report notes these figures demonstrate health reimbursements and not private sales. 

In the Netherlands, cannabis is available to adult consumers via coffee shops where sale and consumption is tolerated, however, legal and regulated medical cannabis is available through pharmacies where doctors are permitted to prescribe the product for any condition given they believe the product will be more beneficial than previous treatments, the report highlights. 

Price per gramme of flower in the Netherland’s is around $7.12, and the country has an estimated 1.4 million consumers, with 2,572 medical cannabis patients and a total of $1.9bn spending (2020).

Portugal

Portugal is one of the few countries in the world with fairly relaxed regulations around cannabis, with decriminalisation of personal use of all drugs, and having legalised medical use in 2018. The New Frontier Data report highlights that the country is home to some of the lowest production costs in the world thanks to the country’s climate and light conditions. 

The report states: “In June 2018, Portugal passed a law to legalise cannabis for medical use, with plans to set up a regulated medical cannabis industry. Legalisation and overall progress in the domestic legal medical market have subsequently been slow to materialise, with qualified patients able to access only a few high-THC products. Nevertheless, the country has significant growth opportunity as a future export market.”

The report’s data on Portugal shows that in 2020 there were 490,332 cannabis consumers in the country, with a total of $708.6m of spending on cannabis, however, Portugal has only 672 medical cannabis patients. Price per gramme of flower in Portugal is $8.03.

The report states: “It has been two years since initial legalisation, and while products are still not widely accessible, steps have been made to lay the groundwork for an operating legal market in the next year.” 

It continues: “Last year, Infarmed created the Office of Cannabis for Medicinal Purposes to aid communication; additional licensing has since been underway, with reports of 150 existing applicants waiting in the pipeline for review…

“While the country prioritised the legalisation of production for exporting, the country is finally taking steps to operationalise high-THC cannabis sales for patients in Portugal.” 

To find out in more detail about other European markets including Finland, Denmark, the Czech Republic and more, as well as the report’s insights on the global market, visit www.newfrontierdata.com.

Markets and industry

A vision for cannabis tourism in the UK

Cannabis tourism in the UK could look much like Scotch Whisky tourism, says the All Party Parliamentary Group for CBD.

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A vision for cannabis tourism in the UK
Home » News » Markets and industry » New Frontier Data report explores cannabis growth and market trends

Cannabis Wealth joined Tenacious Labs and the All Party Parliamentary Group (APPG) for CBD Products on a tour of Dewar’s Aberfeldy Distillery in Scotland to find out how cannabis could create a thriving economic sector, and what cannabis tourism could look like in the UK.

As the UK fleshes out its approach to cannabis, the UK’s APPG for CBD is encouraging the government to establish a solid industry sooner rather than later. The group is highlighting that a fully established cannabis industry in the UK could create thousands of jobs and millions for the UK economy as it attempts to bounce back from the economic harms of Brexit and the Covid-19 pandemic.

Nicholas Morland, CEO of Tenacious Labs and Chair of the Secretariat to APPG for CBD, has penned a manifesto, highlighting that the global turnover of the Scotch industry is £69bn as of 2021, and that the UK’s share of this is £5.5bn. It notes that the industry supports around 42,000 permanent high-value jobs, “the vast majority in rural areas and often employing people who prefer not to move away from hometowns or continue into higher education.”

Read more: UK Government must seize cannabis opportunity, says parliamentary group

The APPG for CBD has highlighted that, much like the Scotch Whisky industry, the UK could benefit from a home-grown cannabis industry that prides itself on premium products.

Morland states in his manifesto: “The UK is lucky to be in a peculiarly strong position to become the global powerhouse if the political will is there to provide the right framework to introduce clear, balanced, inclusive processes for legislation and regulation regarding updating POCA [Proceeds of Crime Act], consumer protection, quality standards, appropriate definitions and limits, research and development, banking, agriculture, insurance, London Stock Exchange listings and more.”

A vision for cannabis tourism in the UK

Cannabis tourism in the UK

The Scotch Whisky Association highlights that 2019 saw 2.2 million visits to Scotch Whisky distilleries, making the industry the third most popular tourist attraction in Scotland. The combination of tours, visitor centres and cafes draws tourists from around the UK and the world, spending an average of £38 per head, and the Association says that many distilleries believe that Brexit has given tourism a boost.

The APPG for CBD says that cannabis has higher economic potential than the Scotch Whisky industry, and that cannabis tourism could similarly reflect its set up. Tours of production sites with visitor centres, cafes and gift shops would generate a large amount of revenue as well as long-term careers as with the Scotch Whisky industry, that can see employees remain in the sector for up to 20 years.

Marika Graham-Woods, executive director of the Cannabis Trades Association and member of the APPG, commented: “By visiting Dewars, we were given the chance to see things from a different perspective and how it might apply to the cannabis industry. This opportunity could outweigh the risks following any overhaul of the outdated Misuse of Drugs Act 1971 and related licensing of hemp growing.

“The legitimate industrial hemp sector is currently impeded by draconian, convoluted, and unsubstantiated laws which are not fit for purpose in today’s society. The history of cannabis and hemp in the UK spans beyond the length of its prohibition.

“By using proven marketing models such as the Scotch whisky and associated distilleries, the development of a regulated cannabis tourism industry would provide a further boost to the British economy.

“Visitor centres, tours, associated shops and in future, dispensaries, at these sites could demonstrate the benefits of cannabis – industrially, environmentally, as a food, and as a medicine are widely known. This could form a part of the historic and educational aspect of visits, increasing awareness to the wider general public, not just to proponents and patients.

A vision for cannabis tourism in the UK

“With the high costs involved in production of premium products, this has great potential to set the British Isles as the forerunner of a worldwide cannabis tourism market.”

However, tourism is not the only benefit to such sites. Currently, Jersey has been steaming ahead with establishing cannabis as a budding industry on the island. It recently made changes to its Proceeds of Crime law which will now enable companies to do business in cannabis as long as it is legal in the country where it is taking place. The island has also established a new Cannabis Advisory Board which is working to advise and inform the government.

Charlie Gallichan of the Jersey Farmers Union (also of Trinity Craft), who joined the tour, highlighted that Jersey wants to add cannabis to the island’s cash crops, such as its famous agricultural products – milk and potatoes. Hemp farms could provide a valuable crop for farmers when other crops fail, and a number of farmers in Scotland are already beginning to explore the possibility of adding hemp to their repertoire.

IMG4

Getting regulation right

In order for the industry to mature and prosper, regulation has to be right, says the APPG.

In a letter to George Freeman MP, Parliamentary Under Secretary of State in the Department for Business, Energy and Industrial Strategy, MP Crispin Blunt, co-chair of the APPG for CBD, alongside Baroness Manzoor, states that the industry is “crying out for clear and practical regulation.”

Blunt stated: “Getting CBD product regulation right is an opportunity to create thousands of jobs, draw in millions of pounds of investment and build on our international bioscience reputation, whilst simultaneously creating a safe consumer market which enables consumer choice.”

On the Dewar’s tour, Adrian Clarke, chief commercial officer at Tenacious Labs, highlights that regulations, such as those similar to units on alcohol products, should be introduced in order to move forward with regulation and bolster consumer safety.

Clarke commented: “Cannabis is going through the same process as post-prohibition alcohol. We already have the template for balancing legitimate consumer choice within the parameters set by essential consumer protection.

“Given the UK has an immediate opportunity to set the inevitable new standards, we also have the opportunity to define the premium space. The political decision is between prohibition and economic benefits, and then all the relevant parties, including the medical world, can finally be allowed to provide the right parameters.

“The result being that consumers will reliably be able to regulate their own consumption and will become increasingly discerning over time – challenging us to come up with ever more premium quality products.”

A vision for cannabis tourism in the UK

Image provided by the Cannabis Trades Association

This vision for cannabis tourism in the UK could manifest at a rapid rate if the correct regulations are implemented. A number of countries in Europe are beginning to take a progressive approach to cannabis regulation, and whilst the UK is currently leading the pack in the regulation of CBD products, current regulatory processes such as Novel Foods applications are, in some industry members’ views, potentially quashing the industry before it can flourish.

Morland states in the manifesto: “In short, this is the time for government to actively drive a new cycle of growth, investment and jobs with some simple, immediate and informed decisions. Yet the route legislation is currently taking outlaws all cannabis production, except isolate.

“Bluntly this would be a short-sighted mistake that doesn’t consider what is clearly the single most important economic opportunity available to post-Brexit UK, to legislate for and build a framework to enable a well-regulated home-grown Cannabis Industry.”

And goes on to say: “With a proper process established, post-Brexit UK has an excellent chance of becoming the leading force in the premium segment of the Cannabis Industry, generating massive economic benefits just like Scottish Whisky. Or it’s too hard, we don’t bother, and watch others doing it instead. It’s as simple as that.”

A vision for cannabis tourism in the UK

Image provided by the Cannabis Trades Association

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Cannabis cultivators “pessimistic” about industry, report finds

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Cannabis and hemp cultivators across Europe are feeling pessimistic about the industry, according to a new report from Canxchange.

The trading platform Canxchange has released a new report including current pricing data and in-depth market analysis of the medical cannabis space.

The Q2 Benchmark Report is part of Canxchange’s strategy to encourage a more transparent and efficient market for hemp, CBD and medical cannabis. The report aims to support farmers, producers, extractors, manufacturers and other industry stakeholders by providing market insight and standardisation for a more productive market, the organisation says.

Pessimism amongst European cannabis cultivators

As part of the report, Canxchange researchers spent weeks surveying more than 100 hemp farms in Europe to gain an understanding of the current outlook for cultivation activity across the continent.

The company measured five key factors that include surfaces planted compared to the previous season, increase/decrease of production investments, stock levels, sales confidence and cultivation yields.

The survey results were analysed and translated into an index number – the Canxchange Farmers Sentiment Index (CFSI) – to gauge the health of the market and participants’ perception of the industry. 100 represents neutral confidence while extremes of 75 and 125 represent a highly pessimistic and highly optimistic perspective respectively.

This quarter, the CFSI remains below 100 at 96.5, continuing on a downward trajectory from March 2022. Although the decline in confidence is slowing, the overall sentiment remains “bearish” especially amongst bigger producers, the research team says.

For the first time since Canxchange launched the farmer sentiment index, big producers have fallen into the “pessimistic territory”. 500-1000 hectares production units scored 93 while those with more than 1000 hectares had an average CFSI of 94.3.

“Looking into the details, large operators have dramatically changed their views on the outlook of the market for 2022,” the report states. “Several factors could explain this market sentiment.”

Canxchange identified three primary factors that are causing cultivator’s pessimism, including uncertain economic conditions, the impact of high inflation on production costs and a lack of visibility for the coming months.

Seed supply in Europe “exhausted”

The Canxchange report found that seed supply in Europe has been “exhausted” with prices expected to surge over the coming months as demand continues to rise.

“We have seen a last attempt from food producers to source as much as possible but supply is drained,” the report states. “Our members are attempting to contract large amounts of seeds from the new harvest so expect the demand to surge further next year.

“Next year’s prices are naturally going to be higher due to increased fuel and fertiliser prices.”

Meanwhile, isolate extract prices have remained stable over the past few months at just over €300, the report found. Canxchange expects that this is the lowest prices will go before hitting highs of just under €400 within the next six months.

Renewed demand for industrial hemp

In the industrial hemp sector, Canxchange has seen fresh demand globally for hemp hurd (also known as shives), industrial hemp stalks used for building materials.

South Africa has been actively sourcing shives from the EU for hempcrete and hemp blocks, the report found while fibre demand has remained stable among insulation producers. However, some EU suppliers have had buyers cancel orders and contracts due to the impact of inflationary pressures.

Canxchange is a B2B market infrastructure that facilitates industrial hemp, CBD and medical cannabis  transactions. Canxchange is a B2B marketplace and electronic platform that connects businesses, helping them to transact in a secure, fast and transparent environment.

Founded in 2019, the London-based company operates globally with over 400 members.

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Trichome Pharma forms partnership with Little Green Pharma

Trichome Pharma has announced it is forming a partnership with Labiana and Little Green Pharma that will see the Australian-based company enter the Spanish cannabis market.

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Home » News » Markets and industry » New Frontier Data report explores cannabis growth and market trends

Spanish pharma start-up specialised in medicinal cannabis and consumer healthcare, Trichome Pharma, has welcomed Labiana Pharmaceuticals and Little Green Pharma as investors and strategic partners.  

The company is forging partnerships in order to fulfil its ambition of becoming the first distributor of medicinal cannabis in Spain. The development follows Trichome’s recent announcement that it has received a medicinal cannabis cultivation license from the Spanish Agency of Medicines and Medical Devices (AEMPS) for R&D.

Read more: Little Green Pharma to increase medical cannabis offering in UK

CEO of Trichome Pharma and managing director of Trichome Capital, Nicholas Balk, commented: “Labiana and LGP are both highly respected leaders in their relevant niches. Naturally, we’re very excited to welcome them both as shareholders and strategic partners. We thank them for their support and trust in our vision.

“Our partnership with Labiana makes perfect sense, given their expertise in third-party  EU-GMP manufacturing of specialised medicines, including psychotropics, as well as their strengths in pharmaceutical distribution. Likewise, LGP has some of the highest  quality medical cannabis products available and a successful commercial track record  in complex regulatory environments.

“LGP’s range of flowers and oil  based preparations will perfectly complement what we aim to produce locally here in  Spain and allow us to achieve our goal of being first to market.”

Labiana’s investment in Trichome Pharma is a vote of confidence from the traditional  pharmaceutical industry in the potential of cannabis as a regulated therapeutic in Spain.

Trichome Pharma’s director of consumer healthcare, Daniel Krupp, commented: “The medicinal cannabis sector needs to be taken seriously on issues of quality and  safety, especially by prescribers and their patients. On the other hand, no one knows  cannabis better than those that work with the plant directly. 

“Both big pharma and the  cannabis sector stand to benefit from closer collaboration and a transfer of knowledge.

“The unique part of our offer is that we’re bringing experts from different fields together to build a platform of open innovation. This serves to deliver only the best possible  outcomes for patients and consumers.”

Labiana’s president and CEO, Manuel Ramos, added: “This commitment to the medical cannabis business is part of the company’s strategic innovation plan, which seeks to stay one step ahead in order to respond to all market needs. 

“And in this case,  at Labiana, we are authorized and experienced in the production of psychotropic and  narcotic products, and it is clear that the medicinal use of cannabis is already, as we  can see, a reality that is increasingly regulated by governments around the world, with  a lot of potential for growth.”

Trichome Pharma’s collaboration with Little Green Pharma began after Balk and Fleta Solomon, CEO of LGP, met at a conference in German. 

Solomon said: “Spain is the next major market in Europe to legalise medicinal cannabis. We’re very  excited to anticipate a change in regulation and develop this partnership with Trichome  Pharma, in a market that should be comparable in size to France or Italy at maturity.”  

Labiana and LGP’s entry into the Spanish medicinal cannabis market comes at a major inflection point as it is expected that in the coming days, the Health Commission will vote on a  proposal recently put forward by a special government subcommittee on medicinal cannabis regulation. 

On June 21 the subcommittee agreed on and presented a long-awaited report which contemplates the prescription of medicinal cannabis for a limited number of illnesses.

Trichome Pharma has stated that the proceeds from their recent capital raise will be allocated to investments that are aligned with this thinking long-term and plans to raise additional capital towards the end of the year.

 

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