2022 has been a banner year for the global cannabis industry and this is a trend that we are bullish on. So far this year, several countries have passed some form of legislation to allow for the sale of medical and/or recreational cannabis.
Interest in burgeoning international cannabis markets is steadily increasing and this trend has shown no signs of slowing down. From Thailand to Mexico, the capital markets are highly focused on the advancement of the cannabis industry in certain countries and have highlighted 5 emerging international markets that our readers should be aware of.
Ukraine Wants Medical Cannabis to Support Mental Health
Although legal cannabis is one of the least significant topics of discussion in Ukraine as a war with Russia continues to escalate, the country’s Health Minister Viktor Liashko said the government supports a bill that would legalize medical cannabis.
Ukraine’s Health Minister said the government understands the negative effects that war has on mental health and that citizens will need medical treatment to combat the increased stress. The legislation intends to improve the quality of medical services and encourage medical research on cannabis. Health Minister Liashko said those who do not support the bill want to discredit the idea of the use of medical cannabis.
Is Germany About to Legalize Recreational Cannabis?
Following a regime change in Germany, we are more confident on the likelihood for the legalization of recreational cannabis in the European Union’s (EU) largest market (as measured by GDP). With a population of 82 million, we are bullish on the potential size of the country’s cannabis market and have noticed an increase in the number of companies that are executing on a strategy to capture market share in the EU’s largest market.
During the last year, several licensed Canadian and Latin American cannabis companies have reported a significant uptick in the amount of medical cannabis that is being exported to Germany. Going forward, we expect demand for cannabis to steadily increase and believe the legalization of recreational cannabis would be a massive catalyst for the entire sector.
Australia is an Underappreciated Legal Cannabis Market
Although recreational cannabis has been legal in Australia for several years, the market does not receive much attention. Since 2020, the amount of cannabis that has been sold in Australia has recorded strong growth and we find the lack of interest to be significant.
According to data from the Therapeutic Goods Administration (TGA), medical cannabis prescriptions have been issued to Australian patients for more than 140 different conditions. We are favorable on the structure of Australia’s cannabis market and the wide range of ailments that medical cannabis has been prescribed for.
Over the next year, we expect Australia’s cannabis industry to continue to record impressive growth. If additional countries in Southeast Asia legalize some form of cannabis (CBD or medical), we expect to see more interest in the region and are of the opinion that Australian would be a beneficiary of the increased attention.
Is Spain Going to be a $1 Billion Cannabis Market
During the last few years, we have seen increased interest in Spain’s cannabis market from Canadian Licensed Producers (LPs) and have a long-term bullish view on the emerging industry. With the country on the verge of decriminalizing medical cannabis, we expect to see increased interest from North American operators.
In April 2021, the Centre for Sociological Investigations conducted a poll which found that 90% of Spaniards support the use of medical cannabis. With this level of support, we expect Spain’s cannabis industry to record major advancements before the end of the calendar year.
The country’s climate is ideal for cultivating cannabis and we are favorable on the impact this has on the economics of the industry. Due to the warm climate in Spain, the cost to produce each gram of cannabis is lower and we find this to be an attractive aspect of the market.
If Spain decides to legalize medical cannabis, the Spanish Medical Agency is expected to be in charge of the industry. According to a report from the Autonomous University of Barcelona, the cannabis industry is €3.3 billion market and we will monitor how the country is able to become a leading international cannabis market.
Thailand Decriminalizes Cannabis
Last week, Thailand became the first country in Asia to remove cannabis from its list of banned substances and to allow people to grow the plant at home. Under decriminalization, cannabis products are required to contain less than 0.2% tetrahydrocannabinol (THC), the plant’s main psychoactive compound, we are not surprised by this caveat.
The Asian cannabis market is its infancy and we consider Thailand to be an attractive entry point for operators with a long-term perspective on the sector. So far, only a few companies have announced plans to capitalize on Thailand and we will monitor how these operators are able to execute.
Although cannabis is decriminalized in Thailand, we do not expect companies to sell products that exceed the maximum amount of THC for several years. While decriminalization is an important step forward, there industry will takes years to develop and we are not expecting any major developments to be reported in the near future
Mexico to Legalize Recreational Cannabis?
Although recreational cannabis legislation in Mexico has been delayed, we consider the country to be one of the most attractive international cannabis markets. A key reason for our bullish outlook on Mexico is related to the legislation being supported by the country’s president and we find this to be significant.
Mexico is the second largest market in Latin America and has a population that is close to 130 million people. According to IMS Quintiles, approx. 11.7 million people in Mexico have been diagnosed with conditions that are treatable with medical cannabis. It is only a matter of time until cannabis is legal in Mexico and we expect this to serve as a significant growth catalyst.
Although 2021 was a roller-coaster type of year for Mexico’s cannabis industry and was highlighted by the Supreme Court vetoing several aspects of legislation to legalize recreational cannabis, we are favorable on how the market has advanced so far this year. We believe it is only a matter of time until recreational cannabis is legal in Mexico and are working to identify operators that would benefit from this.
United Kingdom’s Cannabis Market is Just Getting Started
The United Kingdom (UK) is an emerging cannabis market and we are bullish on how the sector has advanced in recent years. We are favorable on the lack of saturation in the UK’s cannabis industry and have been monitoring the companies that are levered to it.
The Medical Cannabis Clinics (TMCC) is considered to be an emerging leader in the UK’s cannabis industry. Last year, TMCC announced a major milestone and reported to be prescribing medical cannabis for more than 1,500 patients.
According to a press release, there are approx. 2,500 cannabis patients in the UK (in 2020). Based on this statistic TMCC has a 60% market share of the UK’s cannabis market and this is a metric that we find to be significant. With approx. 40% of patients coming from London, the city has turned into a hotspot for the cannabis industry and we will monitor how it evolves this year.
According to New Frontier Data, the two biggest CBD markets in the EU are Germany and the United Kingdom (UK). These two markets account for approx. $2.17 billion (USD) and $2.03 billion (USD), respectively, in annual spending for 2020. We will monitor how these number translate over to tetrahydrocannabinol (THC) over the long term.
If you are interested in learning about the companies that are capitalizing on the changing landscape of the global cannabis industry, please send an email to firstname.lastname@example.org with the subject “Global Cannabis Leaders” to be added to our distribution list.