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The European Cannabis Market: Opportunity Knocks 

July 11, 2022

In this article, we continue our journey reviewing the history of cannabis regulation and proceed to explore the current state of development of the legal cannabis market in Europe, canvassing its decriminalization and regulation as a culmination of a global pattern over the last 20 years. 

What Can I Do and Where? 

It is important while tackling the objective of this article to draw a distinction between legal medicinal use and legal recreational use. This article shall not cross into industrial and other uses. While showing its age, the 1961 Single Convention on Narcotic Drugs (and others that followed) remains an international basis for cannabis is considered (contrary to modern medical evidence) to be an addictive drug with a serious risk of abuse. 

The pattern of legislative change has seen two distinct patterns emerge globally since the year 2000: legalization for medicinal use and decriminalization for recreational use. The position across European countries is as follows: 

Country  Medicinal Use  Recreational Use 
Ireland  Legal (2019 – pilot program)  Illegal 
UK  Legal (2018)  Illegal, but enforcement is on-the-spot fines more often than to prosecution  
Austria  Legal but heavily restricted (2008)  Decriminalized (2016) 
Belgium  Legal but restricted to one specific product  Decriminalized (up to 3g possession) (2003) 
Bulgaria  Illegal   Illegal 
Croatia  Legal (2015)  Decriminalized – for small quantities, on-the-spot fines only (2013) 
Czech Republic  Legal (2013)  Decriminalized – for small quantities, on-the-spot fines only (2010) 
Denmark  Legal (pilot program) (2018)  Illegal 
Estonia  Legal (2005)  Decriminalized (<7.5g) (2002) 
Finland  Legal (2006)  Illegal but rarely enforced; on the spot fines only 
France  Legal – Limited two-year trial underway (2021)  Illegal but on-the-spot fines are more typical 
Germany  Legal (since 1998) for one product; special prescriptions available in limited circumstances (2017)  Illegal but decriminalized for minor amounts <15g (on-the-spot fines only) 
Greece  Legal (2018)  Illegal 
Hungary  Illegal  Illegal 
Italy  Legal (2013)  Illegal but decriminalized for small scale cultivation / use (2019 – court decision) 
Latvia  Illegal  Illegal 
Liechtenstein  Illegal  Illegal 
Lithuania  Legal (2018)  Illegal 
Luxembourg  Legal (pilot program since 2017, fully legal since 2018)  Decriminalized (2001) with plans to expand to limited legalization (2021)  
Malta  Legal (limited product since 2015, fully legal since 2018)  Legal (December 2021) 
Netherlands  Legal (2003)  Decriminalization (1972), legal in specific locations (1976) 
Norway  Legal (2018)  Decriminalized – fines only (2022) 
Poland  Legal (2018)  Decriminalization potential (case by case basis) for small quantities (2011) 
Portugal  Legal (2018)  Decriminalization for small amounts (2001) 
Romania  Legal with 0.2% THC limitation (2005)   Illegal 
Slovakia  Illegal  Illegal 
Spain  Legal (2005)  Not clearly criminalized; case-made law from 1997 
Sweden  Legal (limited) (2011)  Illegal 
Switzerland  Legal (2011)  Decriminalized to a fine (2012) 

Isn’t the EU all about Harmonized Laws? 

Yes and no. As was seen in the Kanavape case (Case C-663/18, decision delivered 19th November 2020), there are limits on the free movement of goods which would otherwise set at nought local health-based regulations around use of cannabis. The bombshell decision opened the European market to hemp-derived CBD. In short, the highest court in the EU pronounced that CBD (when derived from the Cannabis sativa plant in its entirety – not just from its fibre and seeds) does not contain a psychoactive ingredient and is not captured by the 1961 Single Convention definition of “drug”. The limitation in the judgment is that there may be in theory national legislation if appropriate to the protection of health and life of humans and where it does not exceed that purpose. 

Beyond such hemp-based CBD products, the EU’s centralized competencies for legislative action do not extend to narcotics. Rather, these are left to each member state to legislate, resulting in a patchwork of laws as is demonstrated by the above table. 

 What about the Medicinal Cannabis Industry in Europe? 

Parking for the moment the fact that “medicinal cannabis” is not a commonly defined term across Europe, the market is significant and rapidly growing as the dominos tend to fall quicker in the field of medicinal cannabis compared to recreational use. Its value in 2021 was approximately €380m. The real story however is the estimated growth of the market. For Germany alone, perhaps one of the more advanced medicinal cannabis markets in Europe, the market value is poised to hit over €7bn by 2027. There will be 340,000 medicinal cannabis users in Europe in 2022 alone. The overall market is estimated by some to see growth of over 500% over the next three years. This is being driven by a mixture of legislation becoming more mature and a resultant diminution in stigma as medical evidence continues to support appropriate prescribed medicinal applications. 

What is Ireland’s Role? 

From a legislative perspective, Ireland has not taken any steps towards decriminalization or legalization for personal use. The country’s measures to facilitate medically prescribed use of cannabis have been slow but successful, with prescribed cannabis now available within Ireland (subject to a limited number of government-issued licences to specific products/suppliers). The market is in its extreme infancy for now but based on international patterns there is likely to be growth. Ireland is more likely to be of interest for international cannabusinesses or those looking to expand to that scale and into Europe out of the U.S. or Canada. Ireland’s position as a gateway to Europe, being the sole remaining English-speaking common law country with familiar laws, stable government and an excellent range of insolvency options including examinership (like Chapter 11 bankruptcy) position Ireland as an objectively ideal corporate base.  

For more information on the opportunities presented by the Irish jurisdiction and how transatlantic firm Clark Hill, with operations from coast to coast in both the U.S. and Ireland, can assist you explore your expansion options into the European cannabis industry, please contact Robert Hoban or Sam Saarsteiner. 

The views and opinions expressed in the article represent the view of the authors and not necessarily the official view of Clark Hill PLC. Nothing in this article constitutes professional legal advice nor is intended to be a substitute for professional legal advice. 

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