With Canada and the US leading the way, Europe is looking at its growing cannabis market with excitement, but there are plenty of mistakes to be avoided.
Probably one of the most recognisable plants across the world, with its star shape and unmistakable aroma, cannabis is also a fast-growing market for investment.
The substance is commonly known as hemp if its tetrahydrocannabinol (THC) content – the compound that gives a high – is below 0.3%, and simply as cannabis if above that (although, slightly confusing, as both are technically cannabis). The term ‘marijuana’ (or ‘marihuana’) is being progressively phased out due to its historical use as a racist slur. A more common catch-all term for the plant is ‘weed’.
The global cannabis market was estimated to be worth $25.6bn in 2021 but is projected to reach $1.76trn by 2030, at a compound annual growth rate (CAGR) of 23.9% between 2021 and 2030, according to Research and Markets.
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It is not too long ago that cannabis was frowned upon by much of the Western world. It was only in January 2014 that the state of Colorado became the first in the US to legally sell recreational cannabis. Currently, most states have legalised cannabis in some form, either recreationally or medically.
However, cannabis remains illegal at a federal level, leaving businesses linked to the substance in a complicated position in terms of accessing loans or moving capital, while those convicted of illegal activities related to cannabis remain in custody or with criminal records.
In Canada, where cannabis was fully legalised in 2018, the Cannabis Act is now due to be reviewed by the federal government, with a focus on the health impact of the legalisation of recreational weed on young people.
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Source: INVESTMENT MONITOR
