On October 17, 2018, Canada became the first of the G7 countries (Canada, France, Germany, Italy, Japan, the UK, and the U.S.) to fully legalize the consumption and sale of recreational cannabis nationwide – and only the second country worldwide, following Uruguay in December 2013. While recreational marijuana consumption remains largely prohibited throughout the world, there seems to be no stopping the upward-trending legalization movement sweeping the globe. Case in point: 13 countries – Australia, Canada, Chile, Colombia, Germany, Greece, Israel, Italy, Netherlands, Peru, Poland, Sri Lanka, and the UK (effective November 1, 2018) – now permit cannabis use for medicinal purposes.
Over recent years, especially, marijuana has realized a monumental –and, perhaps, unprecedented – shift in public perception and, in turn, investment activity. Regarding the former, take, for example, the UK: its government is reversing policies on cannabis and is now set to legalize its medical use, with a current investigation into relaxing laws that govern when cannabis-based medicines can be prescribed by doctors. With respect to the latter, the industry is experiencing a flurry of global investment from pharmaceutical, alcohol, tobacco, and food and beverage companies, which are partnering with or providing significant capital to cannabusinesses, to position themselves as market leaders. One need look no further than two recent Canadian deals –Constellation Brands’ $4-billion-dollar investment in Canopy Growth, and Molson Coors Brewing Company’s joint venture with Hydropothecary – as examples. And though Canada is fiercely setting the pace in international markets, others are priming to follow suit.
Domestically, Culver City, California-based MedMen Enterprises, Inc. acquired PharmaCann LLC, a Chicago-based medical cannabis provider, in a stock transaction valued at $682 million earlier this month, highlighting a transformative shift in the M&A market and creating the largest U.S. cannabis company by market reach. In fact, according to PitchBook, there have been 194 reported M&A deals that have closed this year in the cannabis sector, compared to 130 transactions in all of 2017.
While partnerships, investments, and M&A markets continue to heat up, countries are beginning to taking a hard look at their respective legal structures. As Marijuana Business Daily summarized recently:
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The U.S. is expected to outpace international markets with a projected $8 billion to $10 billion in retail sales this year. Canada – with recreational retail sales in 2021 projected to be in the realm of 2.3 billion to $4.5 billion – is poised to be a global industry trendsetter in other ways.
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The outlook for Colombia’s market is optimistic, as investment opportunities exist for people outside the country. By contrast, in trailblazing Uruguay, the market is small, and access and supply issues persist.
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The UK’s sudden move to legalize medical marijuana underscores how quickly legislative changes are taking place.
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Significant business potential exists in Germany, where medical marijuana is covered by government health insurance.
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Africa has moved more slowly than other regions, but there is promise in Zimbabwe and Lesotho, with the latter taking steps to create a regulatory infrastructure for medical marijuana.
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Legalization efforts in Australia are underway, incrementally, and recreational use may soon be a reality in New Zealand.
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A pioneer in medical marijuana research, there is now a strong push to allow international exports in Israel. According to MJBizDaily‘s first international report, the country’s export potential could be close to $300 million.
With the global legal cannabis market estimated to reach $146.4 billion USD by year-end 2025, which country, or countries, will make the next big splash?
