How Investors Can Capitalize on Europe’s Booming CBD Market

CBD Market

While Canada may be leading the field in terms of fully legal cannabis, Europe's CBD market is quietly setting out its stall for a huge future. Analysts at the Brightfield Group predict the CBD market across the Atlantic to soar from $318 million USD in 2018 to $416 million USD this year, and even further to $1.7 billion USD by 2023. With the Canadian market is capturing most of the headlines right now, it could be easy for growth of that scale to go under the radar of most investors. Thankfully, we're here to put in the groundwork, so you don't have to.

Legal Status of CBD in Europe

Thanks to somewhat of a loophole in European Union regulations, most CBD products are classified as Novel Foods, which is open to interpretation by each of the 27 member states. In some of the EU's largest countries, like Germany and the UK, CBD products can be found on the shelves of nearly every pharmacy, supermarket, or health store.

Other countries are a little stricter, like Austria, where regulators have completely banned the sale of CBD products, or, in Ireland's case, issued warnings to retailers about stocking such products but stopped short of a complete ban amid a lobbying campaign to fully legalize medicinal cannabis.

So that status of CBD in Europe is a little hazy from state to state, but an application from Czech firm Cannabis Pharma could provide greater clarity. It submitted an application for a CBD-based food supplement product to the European Food Safety Authority earlier this year, and a spokesperson for the regulatory body said the European Commission is presiding over the case before passing it on to regulators. If that application is successful, CBD will be added to the list of permitted food/ingredients, and so, conditions of use will be specified.

Until that ruling is passed, however, companies continue to thrive in the regulatory grey area.

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What are the Big CBD Stocks in Europe?

With companies based in Europe hesitant to go public due to the uncertain legal status of CBD and cannabis in the EU, North American companies have seen the opportunity to get ahead of the game without fear of regulatory repercussions. Let's take a look at some companies asserting an early lead:

GW Pharmaceuticals (NASDAQ:GWPH) is actually headquartered in Cambridge, England, but lists on the NASDAQ. The company manufactures a CBD drug called Epidiolex, which has already been prescribed to more than 12,000 patients and seen really positive phase-three trial results for treatment of childhood epilepsy. This has led GW Pharma to post net sales of $68.4 million USD during the most recent quarter and $101.9 million USD over the first half of 2019. GWPH stock will set you back a pretty penny, however, currently trading at $134.06.

StillCanna Inc (CSE:STIL) (OTCPK:SCNNF) is a Canadian company that has been making some very promising moves into the European CBD market. In May, the company acquired Polish hemp company Olimax, a licensed cultivator, extractor, and formulator of CBD. This purchase makes StillCanna, by far, the largest hemp cultivator in Poland and, when combined with its Romanian facilities, one of the largest in the continent.

Most notably to investors is StillCanna's patented hemp production process, which maximizes CBD content and allows for two crop yields per year. By the end of this year, StillCanna will be able to produce up to 16 million grams of CBD and plans on doubling that output in 2020. By 2021, the company expects to be cultivating 12,500 acres and produce up to 60 million grams, with still plenty of room to grow beyond that. StillCanna is so serious about its European operations that its CEO relocated across the Atlantic in July.

The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF) entered the European CBD market via a joint venture with Knud Jepsen, which received cannabis business authorization from the Danish Medicines Agency. Then, in May, TGOD entered the German CBD market through its subsidiary, HemPoland, paving the way for its premium CBD brand to soon hit the shelves of German pharmacies. TGOD stock has been struggling in its home market amid financing concerns, and so the potential in Europe could provide a light at the end of the tunnel.

The Takeaway

CBD markets have exploded around the world thanks to its supposed miracle medicinal properties. While a lot of those claims remain mostly unproven, there is no doubting that demand is only going to increase. To capitalize on that demand, winning the minds of the investment community will be essential in Europe, and the only way to really achieve that is to get investing.

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Featured Image: DepositPhotos © kittyfly

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