As advocacy groups have battled for legalization on both the state and federal level, the CBD and marijuana markets in the United States have experienced enormous growth in the past few years, to the degree that one estimate suggests the legal marijuana market will be worth more than $146 billion by 2025. While the European Union has experienced less explosive cannabis market growth due to the complex and widely varying cannabis regulations in each individual country, that’s poised to change, according to a recent report from the Brightfield Group, an analytics market and research firm.
Per the report, the European CBD market, which is expected to be worth $416 million by the end of 2019, is projected to be worth $1.7 billion by 2023. The cannabis market in general — which includes all cannabis products, including recreational — is also set to experience rapid growth, from $318 million in 2018 to nearly $8 billion by 2023.
The growth of the CBD and cannabis markets have been slower than they have been in the United States in part because in the EU, CBD is largely limited to topical use and tobacco products, while its use in ingestibles (such as food additives, tinctures and capsules) is prohibited. That may change, however, following an amendment proposed by the European Food Safety Agency to allow CBD in ingestible products, which could pass at the end of the year.
The legal cannabis market is also set to grow, particularly following recommendations from the World Health Organization (WHO) to reschedule cannabis, and a European Parliament vote last month to increase EU nations’ access to medical marijuana, as well as conduct more research on its public health effects. While the resolution did not have any binding legal implications, it did underscore the growing pro-legalization sentiment in the European Union. (In the Netherlands, for instance, which has had a retail-level gray market for decades, lawmakers have been increasingly tightening restrictions around the cultivation and use of marijuana. Still, 65 percent of Dutch people nonetheless say they support the full legalization of cannabis.)
Despite these optimistic numbers, Bethany Gomez, managing director for Brightfield, says cannabis investors should nonetheless approach EU markets with caution. “CBD is currently proliferating through a patchwork of widely different regulations throughout Europe which has made it a very strange and piecemeal market,” she says. “However, as the EU gives more continent-level regulations we expect this bumpy road to smooth and a more rational framework to develop, but this growth will be incremental in nature.”