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2024’s second quarter transpired strongly and predictably after the positive news of the 252-page United States Department of Health and Human Services (HHS) report and Germany's declassification of cannabis as a narcotic. Additionally, it is still highly predicted that as soon as September, the U.S. Drug Enforcement Agency (DEA) will reclassify cannabis to Schedule III. Although not a big deal for adult-use markets, the medical market ramifications are apparent and pronounced. 

Q2 2024 European Cannabis Market Updates

Global medical and adult-use markets have seen a massive uptick in prescriptions and new patients, just as predicted when legislative news started rolling in earlier this year and through the second quarter. Not only have these events been a wake-up call to regulators around the globe, but patients in Germany and other countries now understand they can and should have access to medical cannabis.

Germany Takes Center Stage in the Global Cannabis Market

Germany continues to dominate the conversation as they implemented the first pillar of cannabis reformation: social clubs and removing cannabis from the narcotics list. Although numbers are delayed two quarters, many cannabis distributors and clinics are suffering from shortages while rushing to procure cannabis flower and extracts as the demand is skyrocketing. Clinics are overrun with requests for cannabis prescriptions; pharmacies are running out of stock and upping orders; and distributors are flying around the world procuring flower everywhere they can. This more open market is the new reality of German cannabis, where doctors and patients are embracing rules that clearly make access to cannabis simple and faster for both sides. 

European Countries Making Cannabis Market Moves in 2024

Other countries are also following suit. The United Kingdom has seen a surge in purchasing for no apparent reason other than patients now see the benefit of legal cannabis rather than illicit. France and Spain look like they will finalize rules for cannabis access sometime between now and October. It is the same with Czechia, which just leaked new plans to launch a fully legal commercial cannabis market. While not a European player, Japan is also expected to announce its rules for CBD soon. 

Every country in Europe and an ever-growing list of global countries are debating cannabis rules on a political and regulatory level as they look at their neighbors making reasonable medical access, which is both logical and prudent — especially considering the U.S. HHS report deeming cannabis safe. Cannabis regulations are imminent for the largest countries, with more to come. Cannabis has arrived globally as a medicine!

Q2 2024 European Cannabis Finance and Investment Action

The cannabis investment sector is also energized and excited about Germany, the European Union and global medical markets. While the few U.S. and Canadian companies that are playing in the global markets — like Organigram, Tilray Brands, Aurora Cannabis, Curaleaf and many flower sellers out of Canada — are cheering, the real money is searching for private equity to build the infrastructure that is needed to support what will be the second-largest cannabis market to the U.S.: Europe. 

Minimal M&As and IPOs Indicate a Fueling Break for Future Action

Although only one major deal was announced, investors are combing through the most prominent players and restarting waiting projects. Organigram’s Jupiter Investment Fund was the biggest and only announced deal, which invested 14 million euros into Germany’s Sanity Group in a multilayered agreement to grow the company. Jupiter Investment Fund closed a noteworthy 124 million CAD investment round with BAT last quarter. 

Many open deals are likely to close, and Q3 and Q4 will almost certainly show the real activity level of private equity deals in the works. Also worth mentioning is that IPO 2025 talks have started up again, and with a U.S. Schedule III cannabis shift, that will surely add a turbo booster to M&A and IPO activity. Europe is the most significant growth opportunity, with highly favorable multiples. 

The European Cannabis Market is Abuzz with Preparations

The numbers may not yet show investor excitement, sales volumes, or upcoming regulatory changes, but be sure it is all happening, and the European cannabis industry is beautifully intense right now. The reality of the market’s sum effect is greater than the individual hype and actions that have occurred. 

European cannabis optimism is high; even risk-averse industry players like bankers are considering optimal market positioning. Market conditions are all setting up for a great end to 2024 and a boom in 2025 that will see European IPOs from some of the largest companies. European cannabis is the place to be, and everyone knows it right now!

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