What Europe Can Learn From Cannabis Legalization In North America (Op-Ed)
From toxifillers.com with love
I spent the last week of April in Berlin, Germany, helping with a Talman House investor event and the International Cannabis Business Conference (ICBC). While seeing old marijuana community and industry friends, and making new ones, it was readily apparent throughout the week that Europe is in the early stages of its “green rush.”
Several European nations are currently working to modernize their marijuana policies, including Slovenia and the Czech Republic. Three European nations have already adopted national adult-use legalization measures. Malta was the first to do so in 2021, followed by Luxembourg in 2023 and Germany in 2024.
Of the three, Germany’s industry holds the most industry potential by far. Germany already served as the largest legal medical cannabis market on the European continent before the adoption of the CanG law. Part of Germany’s CanG law involved the removal of cannabis from the nation’s Narcotics List, a public policy change that has yielded a significant increase in domestic medical cannabis production, patient prescriptions and medical cannabis product imports.
Having witnessed the start of the green rush in the U.S. over a decade ago, when Colorado and Washington State became the first legal states back in 2012, the level of excitement that I experienced in my interactions with people in Germany last month was relatable. I remember what it was like to stand at the edge of cannabis history with the winds of change at my back.
A common theme throughout my trip to Germany was members of Europe’s industry and advocacy community asking me what lessons and insights I could provide them based on what has transpired in North America. Many attendees commented that I was “from the future” at the Talman and ICBC events in Berlin, and desired to know more about what had occurred over the last decade on my side of the Atlantic Ocean.
Europe has a unique opportunity to take the best components of North America’s legalization models, learn from the mistakes made by Canada and legal states in the U.S. and create something better than what exists in North America’s markets. It is a window of time that will only happen once, and when that window is eventually closed, Europe’s initial opportunity to create a solid industry foundation will be over forever.
One of the most notable parallels between industry and policy in the U.S. and Europe is the layered patchwork of laws and regulations in place in both regions. Just as the U.S. is made up of siloed state markets while most cannabis activity remains prohibited at the federal level, the European Union is also made up of siloed member-nation markets that are governed by confusing, if not conflicting, European Union agreements.
A major lesson European lawmakers can learn from the public policy patchwork headaches the U.S. has experienced is that harmonized laws and regulations are key ingredients to success. Those ingredients remain elusive in the U.S. and have hindered the industry from reaching its full potential, and with it, providing the full economic and social benefits that a thriving legal cannabis industry can generate for society. Federal prohibition in the U.S. has also held back research for many years, and continues to limit the nation’s industry from participating in the wider global community.
Currently, two dozen states in the U.S. have adopted adult-use cannabis legalization measures, with many of those states being home to operational recreational cannabis industries. The remaining states either do not have operational adult-use cannabis industries, but may soon, or they continue to prohibit sales altogether. European policymakers can learn valuable lessons from the experiences of both legal and prohibition states.
Unregulated cannabis sales continue to thrive in prohibition states in the U.S., which is a byproduct of the nation’s disjointed cannabis laws. In cases of legal and prohibition states sharing a border, consumers from prohibition states regularly cross the border to make their purchases. Prohibition states then completely miss out on the cannabis industry taxes and fees generated from the purchases.
Legal cannabis industries in states that allow cannabis commerce generate significant revenue for public projects that benefit all members of society. Between mid-2021 and the end of 2024, legal cannabis states brought in more than $9.7 billion in cannabis tax revenues and fees in the U.S. Additionally, state-legal industries in the U.S. support well over 400,000 full-time jobs.
No longer enforcing failed cannabis prohibition also saves jurisdictions money and frees up their criminal justice resources to focus on fighting real crime, which benefits all members of society, whether those members consume cannabis or not. Prohibition states in the U.S. are missing out on both the public revenue generated by a legal industry and the government enforcement savings associated with legalization.
The fractured approach to cannabis regulation in the U.S. also creates a major burden for many legal operators. Every state in the U.S. has its own set of laws and regulations, which require multi-state operators (MSOs) to develop individualized business and compliance models for every single jurisdiction. That drives up costs and negatively impacts those entities’ ability to benefit local economies and public coffers.
The European Union and its member states would be wise to recognize that the U.S. has become a network of cannabis policy winners and losers. Legal states are reaping the benefits of legalization, and prohibition states are continuing to pay the substantial direct and opportunity costs of clinging to prohibition. The European continent can become a region of winners by pursuing a harmonized approach to cannabis policy and industry.
A great example of what happens to an unregulated market when cannabis policies and regulations afford consumers and patients consistent access to national purchasing options can be found in Canada. Unlike the U.S., Canada legalized cannabis nationwide in 2018, and while individual provinces and territories adopted local regulations, legal purchasing channels exist across Canada. At the very least, all Canadian adults can order legal cannabis products through the mail.
Within a handful of years, Canada’s legal industry has largely displaced the unregulated market. A recent data analysis by a team of international researchers found that the Canadian cannabis industry has an ‘estimated legal market capture of 78%,’ and there was a “substantial transition in expenditures from the illegal to the legal market.”
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Canada has sufficiently proven that if consumers and patients have robust legal cannabis commerce options, they will choose regulated sources over unregulated sources a vast majority of the time. The overall economic impact and boost to public health outcomes of that transition are significant.
An economic analysis conducted by Deloitte estimated that in less than four years, the legal cannabis industry in Canada had contributed over $43.5 billion to the nation’s GDP. Cannabis companies directly invested roughly $4.4 billion into Canada’s economy during that timeframe, with the remaining boost to GDP coming from “indirect” economic contributions and “induced” contributions.
To be clear, not everything about Canada’s legalization experience has been positive. Many business decisions made by some of Canada’s largest cannabis companies were clearly driven by emotion and hype, and the monetary ramifications proved to be disastrous. Billions of dollars were metaphorically lit on fire in the years that followed legalization, and it should serve as a cautionary tale for entrepreneurs and investors on the other side of the Atlantic Ocean.
Europe is at a pivotal moment in time. Policymakers, advocates, and industry members have an opportunity to create something special. Europe can become a glowing example of how to modernize cannabis policies and regulations in a balanced, effective way.
Looking back on multiple decades of my cannabis activism in the U.S. and benefiting from having a front-row seat to how things unfolded in the emerging legal cannabis industry, I will be the first to recognize that we got some things right and some things completely wrong. It is my personal hope that Europe learns from North America and makes the most of its current opportunity, and that its chance to create the best continental cannabis model is not squandered.
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Photo courtesy of Mike Latimer.
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