It is predicted that Europe will have the biggest cannabis market in the world in the next five years. And developments in the past week have, again, helped to vindicate these expectations. We have seen considerable investment in the market; with some businesses have been priming themselves for their first sales and others experiencing a surge in profits.
Northern Swan Invests $8m in German Cannabis Business
Northern Swan, a holding company based in New York, recently invested $8m in Cansativa, a German medical cannabis distributor and wholesaler. As the largest cannabis market in Europe, Germany’s annual market has been valued at $5bn. Kyle Detwiler, CEO of Northern Swan, said:
Germany offers one of the largest legal medical cannabis consumer markets in the EU, with the patient population growing at a steady rate – there are already nearly 50,000 registered patients…Of all the markets in the EU, Germany is arguably the most attractive from a distribution standpoint.
Arcview and BDS Analytics have predicted that Germany will have the biggest international cannabis market outside of the US and Canada.
Canopy Growth Expects First Sales to Commence in September
Canopy Growth, a Canadian cannabis company, is expected to commence sales from its production facility in Denmark in September. Canopy Growth is one of several Canadian cannabis firms building cannabis distribution and wholesaling facilities in Denmark as a way to meet Europe’s growing demand for medical cannabis. Canopy’s large facility is based in Odense, two hours west of Copenhagen. This is where Aurora – one of Canopy’s main rivals – has also built a facility.
In the nine months before the end of 2018, Canopy generated over $6m in international revenue, which is nearly a sixfold increase compared to the same period in the previous year. A large chunk of these profits has come from increasing European demand.
The Cannabis Testing Market is Growing
Cannabis testing is done for a variety of reasons, including finding concentrations of cannabinoids (active ingredients). This helps to determine the strength of the cannabis. Cannabis testing also helps to detect pesticide residue, contaminants like bacteria and fungi, and trace metals, all of which can affect human health. Testing cannabis is, therefore, an extremely important aspect of medical cannabis production.
The global cannabis testing market is set to witness a surge in profits by 2026, with Europe placed as the second biggest market, after North America. In 2017, the global cannabis testing market was valued at $926m and is expected to see a compound annual growth rate (CAGR) of 13.2% between 2018 and 2026. The cannabis testing market in Europe specifically was worth $292.58m in 2018 and is expected to rise to $517.93m by 2023 (a rate of 12.1% CAGR).
Key players that test cannabis destined for the European market include Cannabix Technologies, Inc., Agilent Technologies, Inc., Digipath Labs, Inc., Shimadzu Corporation, Waters Corporation, PerkinElmer, Inc., AB SCIEX LLC, Millipore Sigma, Restek Corporation, LabLynx, Inc. (U.S.), Steep Hill Labs, Inc., PharmLabs, LLC, SC Laboratories, Inc., and Accelerated Technology Laboratories, Inc.
The International Organization for Standardization (ISO) recently updated its standards for laboratory testing, known as ISO/IEC 17025. And cannabis testing labs in the US are paying attention, as an increasing number of states are requiring accreditation to ISO/IEC 17025.
The previous requirements laid out in ISO/IEC 17025:2005 only briefly mentioned impartiality. However, the new ISO/IEC 17205:2017 underscores the importance of impartiality and is strict about its requirements. For cannabis testing labs to stay impartial, they must eliminate or resolve conflicts of interests. Testing labs cannot let commercial, financial, or operational pressures to affect their activities. Labs must be neutral, balanced, fair, detached, and free from bias.
There isn’t a European requirement for cannabis testing to be held to ISO standards. Nonetheless, if EU countries were later required to test to these standards, it would be interesting to see how they would deal with the impartiality requirement, given that the European market is saturated with self-dealing.