Executive Summary

Updated  January 7, 2021

Though global entities such as the United Nations (UN) and World Health Organization (WHO), as well as virtually all national governing bodies, have maintained a strictly anti-cannabis stance over the course of decades, the international community appears to be warming to the prospect of legal, regulated cannabis markets.

In early 2019, the WHO formally recommended that cannabis be rescheduled to a less strictly regulated category. Though the United Nations Commission on Narcotic Drugs’ (CND) subsequent vote on cannabis rescheduling was delayed more than once, ultimately the body elected to remove cannabis and cannabis resins from Schedule IV (relegating it to Schedule I), and though it remains under tight international controls, the move signaled acceptance of cannabis’ potential as a medicine and was certainly a positive step toward global acceptance and normalization of medical cannabis.

Europe's legal cannabis market is still rather small, but it is poised to grow rapidly, with countries throughout Europe now regularly developing and adapting regulatory systems to open, build upon and expand cannabis operations. Once established, each will help pave the way toward a more cohesive, stable and scalable medical cannabis ecosystem across the region. The various adult-use trials in the works are also expected to lead to sizeable, sustainable growth over the longer term.

Market Sizes & Projections

  • Europe’s cannabis market is projected to reach US $359 million in 2020, an incline of 25% from 2019, and will grow to over US $3.1 billion by 2025, with a 2020-2025 CAGR of 52%.
  • The largest medical cannabis market today and projected for 2025 is that of Germany, which will reach sales of $267 million in 2020 and is expected to make up a $2.1 billion market by 2025.
  • The greatest medical market growth rate in Europe will be seen in the United Kingdom, which is expected to allow for domestic cultivation and general practitioner prescribing in the coming years, resulting in a 2020-2025 CAGR of 98%.

Growth Drivers

  • Though cannabis sales were projected to take a hit in 2020 due to decreasing patient registrations and supply chain disruptions related to the COVID-19 pandemic, instead the market grew 28% during the year. This is in part because telehealth became more common and encouraged the medical cannabis enrollment of trepidatious new patients, and in addition, physicians and pharmacists were some of the only entities to keep the doors open during 2020, thereby leaving current and potential patients with registration and renewal options. In addition, supply chains have gone by-and-large uninterrupted, keeping the market well-stocked.
  • A number of countries have adopted policies allowing cannabis products onto the market beyond pharmaceutical compounds (e.g. Sativex, Marinol), which has opened up the market to a great deal of additional consumers who either did not have a need for these specific formulations, or who could not afford their hefty price tags.

Evolution of the Market

  • Though most European countries at this point are working on building up and lifting limitations within their medical markets, adult-use cannabis pilot programs are around the corner in both the Netherlands and Switzerland (and Luxembourg is considering a full adult-use launch in the medium term). These pilots are evolving much more incrementally and slowly than medical markets, and will be longer-term plays, though if and when they are adopted broadly they also offer greater market prospects.
  • Extracts (including oils, capsules, and finished pharmaceuticals) are the leading category of product sold on today’s medical markets, and are expected to remain a slightly larger component of the market than flower throughout the forecast period. However, as adult-use markets come online, they are expected to see flower dominate by a large margin.

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