A report from market intelligence firm Brightfield Group projects the European market for CBD to grow 400 percent over the next few years. Estimated to be worth $318 million in 2018, the industry will exceed $1 billion before 2023. This news has driven CBD companies to establish footholds in key European markets.
While the UK is currently the largest market at $80 million, and Germany is the fastest growing market, the Brightfield report specifically cites progressive attitudes towards CBD in Switzerland as a "key growth driver" for the industry. Currently, Switzerland is "building out and improving regulations surrounding product quality" for both cannabis and CBD.
This not only boosts consumer confidence in CBD products, but it also makes the Swiss market an important hub for CBD in the EU as other countries follow suit. Last year alone, the Swiss spent $82 million USD on CBD. Per capita, that's five times as much as the United States spent.
Some CBD companies already have a presence in the country. Others are moving quickly to use the small, central European nation as a launching pad for the rest of the continent, as shipping CBD to other countries from Switzerland is legal. These are some of the companies positioning themselves to profit from the CBD boom in Europe.
MPX International Makes a Strategic Purchase to Take Advantage of Swiss CBD Laws
Earlier this year, MPX International Corporation (CSE:MPXI) (OTCPK:MPXOF), made a bold purchase in order to extend its cultivation footprint into Europe. In April, MPX acquired Swiss CBD brand HolyWeed for $13.4 million CAD.
Daniel Fryer, MPX International’s head of European development, said of the acquisition, “Switzerland is home to some of the most advanced consumer goods, cosmetics, ingredients and pharmaceutical companies in the world, and HolyWeed being on their doorstep opens a whole host of future opportunities.”
MPX has been cited as a cannabis penny stock with serious potential on the horizon, in large part due to the company's international growth.
As a base of hemp and CBD cultivation, Switzerland provides a host of unique benefits for CBD companies. Since 2016, cultivators don't even need a license to grow or sell high-CBD hemp in the country, so long as the plant does not exceed the legal threshold of 1 percent THC.
ICC International Leverages Swiss Cultivation to Market Across Europe
ICC International Cannabis Corp. (CSE:WRLD.U) (OTCPK:WLDCF) (FSE: 8K51) is also making the use of Switzerland's forward-looking attitude towards CBD and CBD companies.
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Through a transaction that saw it acquire nearly half of Wayland Group's (CSE:WAYL) (OTCQB:MRRCF) (FWB: 75M) international assets, the Vancouver-based company now benefits from a 60,000 square foot Swiss cultivation facility as well as a proprietary genetics portfolio available for export.
Because shipping CBD from Switzerland to the rest of Europe is legal, ICC uses this holding to feed the continent's growing demand for CBD. This puts the company at the epicenter, both economically and geographically, of the booming market.
United Cannabis Makes Distribution Agreement with Cloud 9 Switzerland
Another CBD company, United Cannabis Corporation (OTCQB:CNAB) will soon begin selling its Prana Hemp products in Switzerland following the announcement of a distribution partnership with Cloud 9 Switzerland on August 15.
Cloud 9 focuses on using medicinal plants for the health and wellness benefit of European citizens. It has extensive knowledge of CBD markets across the continent, and as part of the deal with United Cannabis, it will also distribute the Prana Hemp products in stores throughout Italy.
These two countries are only the initial focus. As Cloud 9 CEO Francis Scanlan says, "Demand for CBD and other cannabinoid-based products continues to grow throughout Europe." Switzerland and Italy will serve as a sort of "proving ground" for greater CBD distribution down the line.
Switzerland's position in the heart of Europe but officially outside of the EU makes it a perfect location for CBD companies to break into the European market. Investors should watch for which companies do well in the Swiss market to get an idea of which will capitalize on a larger scale in the coming years.
Featured image: DepositPhotos © happyalex
