CANNABIS Europe opened its doors to more than 1.200 delegates from more than 30 countries this Tuesday in Old Billingsgate, London, bringing together the main voices of European cannabis for the first of two days of inspiration and debate. Prohibition Partners CEO and co-founder Stephen Murphy addressed a packed conference room, welcoming an increasingly diverse audience with growing interest in European cannabis.
Setting the tone for the day's events, Murphy said that, in an economic and political climate where "we all need reasons to be optimistic", he believes that "the European cannabis industry gives us this hope that things are and can get better". ”.
Pointing to recent developments in Spain, which last week all but confirmed plans to legalize medical cannabis, along with evolving plans in Germany, Switzerland, Portugal and Denmark for a recreational market, Murphy said he believes this is 'our course to change drug policy in Europe and international law forever'.
Amid calls for optimism, he acknowledged that there was still work to be done to enable the cannabis industry to reach its potential and that he knew "firsthand that money is tight right now."
“We are in a bear market, economically, but European cannabis is a bull and is just getting started. Europe is still on a significant scale, valuations are still very attractive to international investors. So stay committed and stay focused. It is impossible to succeed alone.”
Featured in Germany
Two successive sessions focused on rapidly evolving developments in Germany followed soon after, including an interview with Kristine Lütke MdB, a member of the Free Democratic Party and the German Bundestag. Lütke, who is currently participating in expert hearings with the Ministry of Health in Germany to determine the future of the legal market, began by assuring the public via videoconference that she was “very optimistic that we will legalize cannabis within this legislative period”, if a bill to be presented by the end of the year.
Setting aside concerns around the pandemic, the war in Ukraine and the inflation raised by the session's presenter, Krautinvest editor Moritz Förster, Lütke added that the coalition is still "willing to fulfill the tasks we have set ourselves", including the legalization of cannabis for recreational use.
Despite optimism around the pace of the discussions, Lütke said the complexity of the issue and the various authorities involved meant it was important 'not to rush things too much', adding that 'it doesn't help anyone if we run out of breath in the last meter'.
Although Lütke declined to go into detail about the intricacies of the legislation, as the 'hearings were confidential', he said that in his eyes the most crucial element was ensuring that Germany could 'provide enough legal cannabis to meet the needs market and consumers', adding that he was 'relying on private companies to open up this new market'.
Pressed over what she believes is the biggest obstacle to market launch, Lütke said she believes “the biggest problem is still the UN Single Convention and the Schengen agreement”.
But his optimism was not shared by all the members of the panel discussion that followed, including Carlsquare Group managing partner Arnold Holle, who said he doubted the government could achieve all of its goals by the end of the legislative period, estimating that a legal market will emerge only around 2026.
However, he added that he believed German cannabis companies would be "at least as strong" as their US counterparts when the market launches. Asking for patience, he added that "a year here or there won't make much difference."
The other panelists, including AlephSana co-founder Boris Moshkovits, suggested that the date would be closer to the end of 2023, arguing that if it is not reached by the end of this legislative period, it might not happen.
Discussion turned to the central question of the session, whether Germany should pursue a “California or Caution” strategy, with all members pointing to the need for balance.
Finn Hänsel, founder of Sanity Group, said that nowhere has yet found the perfect compromise, adding that being too restrictive will boost the illicit market, but being lax will lead to an unhealthy influx of people using cannabis for the first time.
When asked whether the proposed price of 10 euros per gram would allow companies to be profitable, Moshkovits said he believed customers would eventually be willing to pay for higher quality.
He explained that he believed that the same level of “sophistication that came into California” would eventually emerge in Germany, with Holle agreeing that the price difference between the legal and illicit markets will eventually be justified by the end product.
For the market to succeed, Hänsel argued that getting legal cannabis had to be as convenient as a 'drug dealer who would deliver it to your door in 10 minutes', and that 'if we don't get that, the law has failed'.
A global market
Subsequent sessions focused on the possibility of a global cannabis market and what a unified global cannabis regulation could look like. Chris Murray, managing director of Fox North, argued that the recently released Hodges Review could provide some guidance on how a global regulatory framework might be explored.
Later, during a session focusing on global supply chains, Cannavigia CEO Luc Richner suggested that only when “we have a harmonized global system” can we effectively end the global illicit market. Metrc's director of strategy, Lewis Koski, added that these global regulations and "best practices" could be established in Europe rather than the US, thanks to its strong medical market.
He added that other industries can learn from the cannabis industry, which was one of the few markets where supply chains were able to weather the storm of the pandemic.
At the end of the day, the discussion turned to the timing, specifically the “right time” for companies to enter Europe. Artemis Growth Partners co-founder William Muecke said that while “first movers” often have an advantage in the market, they can also be the first to fail. “You can do everything right, and if the market isn't there when you're ready, you're just sitting around waiting. You have some advantages if you choose the right steps from the start, but it's not a panacea to be early. It's great news for Europe now, it's not too late. If you're an entrepreneur, if you're an investor, it's not too late for the market,” he concluded.
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