How Accurate Are European Cannabis Industry Projections?

It is still far too early to be able to project any real numbers with authority as multiple countries have still not passed comprehensive market reform

By now, guestimates about cannabis market size in Europe it is a veritable cottage industry. Namely “projecting” the size and growth of the European cannabis industry – either by country or region is a regular “thing.” How accurate such guesswork is, however, is highly debatable. Here is why.

Medical Demand Is Still Patchy

The German cannabis market has definitely grown in the last five years. This is for several reasons. The first is that in 2017, the German government mandated that insurers reimburse the costs of medical cannabis when prescribed by a doctor. The second is that while it is possible to track the slow growth of this market, future volume is also unclear. From the start of market sales here, German producers have not come close to meeting market demand, and insurers have been routinely turning down about 40% of applicants and for a variety of reasons. Until more trials are done, insurers are able to refuse coverage based on old trial data. This was not the intent of the 2017 legislation – namely the law says that if a doctor prescribes cannabis for a patient as a drug of last resort, the insurer is supposed to reimburse. That has not been how it has worked in practice.

Recreational Markets Are Too Young to Gauge

Here are a few absolutes about the market now. Germany will legalize a recreational market, but what the parameters will be are impossible to predict. This includes real sales, and of course, home grow. Beyond this, at least in Germany, the CBD industry still has no protection (like in the UK). Even here, other economic conditions, namely inflation, are going to have a damper on market growth – simply because this is still a “luxury” industry. In Italy, medical cultivation happens solely on a military base and the CBD biz, while growing, also has to compete with inflationary pressure. There is certainly a great deal of potential, but anyone who tells you that they can predict, with any accuracy, how big any of these markets will be is lying.

Switzerland Can Create a Little Insight

Here is why Switzerland may be a more fertile ground to create guestimates. There will be a set number of participants per Canton (or state) for the next couple of years. It will be able to project how many participants will be a part of the trial, and potentially the worth of what they might buy. For this reason, the market here is a good straw man – but not really applicable anywhere else.

Holland Is Unreliable

Yes, there is a national cultivation trial in progress, however, the Mayor of Amsterdam keeps making noises about shutting tourists out of the semi-legit market in Amsterdam. Nobody really knows, including the Dutch, what is about to happen, much less what the market is going to look like in five years.

Legislation Is in Flux in Other Countries

Then of course there is the soft stance on cannabis reform everywhere else. It was supposedly a sure thing that Luxembourg and Portugal would have announced plans for their own recreational markets. That has not happened for the entirety of 2022. Nor has any other big movement anywhere else.

For all of these reasons, it is really impossible to accurately judge the size of the market other than to say that it will increase. That is, at least, a step in the right direction. However, beyond this, educated projections are still a long way off.