Editor’s note: This editorial was contributed by Johnny Green, Media and Content Director for the International Cannabis Business Conference.
The legal cannabis industry is rapidly becoming a global juggernaut and as anyone that has paid attention in 2022 will be quick to point out, the legal international industry is barely scraping the surface of its overall potential. It’s likely that 2023 will yield more of that potential being tapped, yet to what degree is open to debate.
As it stands right now there are three countries that have passed adult-use legalization measures. Uruguay was the first back in 2013, Canada followed in 2018, and in late 2021, Malta became the first country in Europe to pass a nationwide legalization bill. Multiple countries also had legal decisions previously rendered by their top courts regarding the unconstitutional nature of cannabis prohibition, such as South Africa, Italy, and Mexico. Legalization efforts are taking longer than expected in those jurisdictions, however, eventually sensible cannabis policy will win out.
Will any country legalize cannabis in 2023?
Going into 2023, there is an enormous ‘cannabis policy elephant’ in every room around the globe where legalization discussions are being held. I am talking about Germany, of course, and no 2023 cannabis policy speculation is complete without first touching on what is happening within Germany’s borders.
In late 2023, following the International Cannabis Business Conference (ICBC) where representatives from all of Germany’s major political parties held historic cannabis policy discussions, a federal election was held and a new governing coalition was elected. The new governing coalition, often referred to as the ‘Traffic Light Coalition,’ wasted no time in indicating its intent to pass an adult-use legalization measure and to launch a regulated adult-use industry.
Currently, Germany’s Health Minister is making the case for German legalization at the European Union level. In an ideal scenario, the European Union would give its blessing to Germany’s legalization plan, which involves producing all cannabis domestically for an adult-use market and allowing adult households to cultivate up to three plants.
Gaining approval from the European Union (EU) would likely preemptively thwart any legal challenges from other EU member nations. What happens with Germany and the EU will largely dictate what happens around the globe in 2023, whether cannabis supporters around the world realize it or not, and it will surely dictate what happens throughout the rest of Europe. According to the latest reports out of Germany, a legalization measure is expected to be formally introduced in 2023, and it could open the floodgates to similar measures being introduced in other parts of Europe and beyond.
Evolving markets
As global cannabis observers continue to hold their collective breath and monitor the political saga in Germany, other regulated markets will continue to evolve. One market that is particularly noteworthy is Malta, where regulators are expected to start accepting non-profit cannabis club applications in February 2023.
Cannabis clubs already exist in Canada and Uruguay but a successful launch of the regulated club model in Malta could prove to be very significant for similar efforts elsewhere in Europe. Spain, for instance, is home to hundreds of unregulated cannabis clubs and activists have tried for years to get them officially recognized by Spain’s government, to no avail. The only exception is Barcelona where local lawmakers passed a cannabis club measure, although the measure would later be voided by a court decision. If Malta succeeds, it could provide a blueprint for other regions.
Meanwhile, changes are coming to Uruguay’s cannabis legalization model in 2023, proving that cannabis policies are still evolving in the world’s oldest legal, nationwide adult-use cannabis market. Uruguay initially passed its legalization measure in 2013 with regulated sales through pharmacies starting in 2017. Since the start of sales, consumers have had only two options of low-THC cannabis to purchase. A flower option with a higher level of THC content is coming to pharmacies in Uruguay this mont, and a fourth option is expected in late 2023.
Canada, which is home to what is often described as ‘the largest cannabis policy experiment on earth,’ will continue to see its cannabis industry evolve, with its grip on direct international cannabis exports continuing to wane to some degree. Many of the countries that Canadian companies were historically exporting medical cannabis to are ramping up their own domestic production, often with involvement from Canadian companies in some manner.
I expect legalization to continue to spread at the local level in the United States and Mexico in 2023, with national reform likely remaining elusive due to ongoing federal political hurdles in both countries throughout the year. The African and Oceania continents will experience significant growth in 2023 in medical markets that are currently established. Unfortunately, cannabis policy on the Asian continent will likely continue to be the worst on the planet, except for Thailand.
A momentum-building year
The emerging legal cannabis industry will continue to thrive in 2023. Statistical records will continue to be broken at the macro level, and that is a trend that will presumably continue well into the future until most countries have passed legalization measures and launched their own regulated industries.
With that being said, unless Germany passes a legalization measure in 2023, it’s likely that no other country will do so in the calendar year. I expect 2023 to be a historic year for cannabis policy but it will be more so on the introduction side of the equation versus the finalization side.
Even if Germany gets a legalization measure to the finish line in 2023 — which I am certainly hoping for — other countries will likely take longer to finalize their own measures, as Germany started its process earlier. Furthermore, actual legal sales of adult-use products in Germany in that scenario would likely not start until 2024, if only because Germany’s current legalization model involves cultivating all market cannabis domestically, and that is not going to happen overnight.
In my opinion, 2023 is going to be the calm before the storm at the global level for cannabis in many ways. It will be the year that we see more cracks starting to leak in the metaphorical dam that is prohibition, prior to it bursting wide open in 2024. As such, innovators, inventors, entrepreneurs, investors, and industry service providers would be wise to position themselves in a way that ensures they can take full advantage of the winds of change that are gaining speed with each passing year. A great way to do exactly that is to join me in June 2023 in Germany at the ICBC, where cannabis industry and political leaders from around the world will once again be converging in Berlin.
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