The always-exciting cannabis industry got a few big doses of positive news from regulatory agencies worldwide in Q3 2023. Although the stock market spiked, only a few good European Union deals made news this last quarter. Sentiment has increased for the cannabis sector in general, and EU sentiment remains relatively high. There was big news from Germany and the United States, with a nice splattering of movements across the globe.
U.S. May Reschedule Cannabis and Pass SAFER Banking
Cannabis stocks went on a tear following a cannabis rescheduling recommendation letter by United States Health and Human Services (HHS) Assistant Secretary for Health Rachel Levine to Drug Enforcement Administration (DEA) Administrator Anne Milgram. Stocks have since calmed, but the HHS and DEA will be crucial in adopting the change of rescheduling cannabis from its current classification as a Schedule I narcotic like heroin or LSD to a Schedule III controlled substance in alignment with the medicinal usefulness of cannabis. Levine’s interdepartmental letter is a first step toward a U.S. rescheduling that could open up everything from increases in research and development to destigmatization, breaking the famed U.S. 280E tax burden on cannabis companies, potentially loosening banking and other finance activities. Additionally, much-needed departmental classification will eliminate final political gridlock barriers, and anti-cannabis unfounded rhetoric and negative lobbying will be hampered, thus paving the way for SAFER Banking and many other stalled initiatives that need passing.
Germany Eyeballing Cannabis De-Listing and Decriminalization
The Germans are facing calls on both sides of the political aisle to de-list cannabis as a narcotic and decriminalize the plant. The recently approved proposal to decriminalize cannabis, enact social clubs and remove cannabis as a narcotic looks like it will progress through the government parliament. German cannabis decriminalization would open up a recreational-style program and greatly reduce the stigma, approvals and paperwork burdens doctors face to open access to patients nationwide. Most EU countries are watching this process. Although anti-cannabis lobbies are powerful in the EU, passing such reform would surely ignite a wave of cannabis reform around Europe. As Germany is an economically powerful country, smaller countries that feared advancing internal cannabis programs will now be encouraged to take up the legislation without fear of ostracization.
Mixed News Abroad for European Cannabis’ Progress
A flurry of cannabis regulatory news from other European countries occurred during Q3 2023. Ukraine seems intent on opening its medical access program for cannabis and advanced legislation. Albania announced its intent to support medical cannabis production. Luxembourg announced that police can use cannabis off duty. Israel announced loosening patient access by designating cannabis as a first-line treatment instead of a third option for patients. It wasn’t all positive movement, however. France’s Emmanuel Macron signaled he would not support medical legislation. Spanish Minister of Health José María Miñones announced at the end of March that the information on medical cannabis is “insufficient” and he “cannot recommend its use.” Both hostile countries seem less interested in the actual medicine and more interested in Big Pharma lobbying efforts.
Mergers, Acquisitions, and Money Raises Move the EU Market
The EU cannabis scene had a splatter of M&A and money-raising activity. The most notable event was Somaí Pharmaceuticals receiving both EU Good Manufacturing Practice (GMP) I and II certifications in a record 21 months from the start of construction, plus 5 million euros in new funding to build up sales and distribution channels throughout the EU and Australia. Seed Innovations sold part of its stake in Avextra for 3 million euros, which gave a valuation of 75 million euros. There were some asset buyouts: Curaleaf bought a flower packaging facility in Portugal from Clever Leaves in a 2.5 million euro transaction;; CBD of Denver acquired HolistiCH GmbH, a Swiss-based company concentrating on high-quality cannabis clones, for an undisclosed sum; and SynBiotic acquired a controlling stake in CannaCare Health, a German retail CBD brand, for an undisclosed sum.
Q3 2023 European Cannabis Conclusions
Q3 2023 was a good quarter with hopeful investors, but still not enough to draw big money into the EU space and excite much M&A activity. Germany looks like their narcotic listing of cannabis will fall. Expect action to pick up both in countries allowing cannabis production and in those accepting the sale of medical cannabis products. Prepare for markets to rally when U.S. rescheduling occurs, and global cannabis to become feasible if German cannabis passes.More By This Author:Q3 2023 European And US Cannabis Update
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