Europe is projected to be the fastest growing region in the global cannabis market over the next five years, according to a new report from Markets and Markets.

It’s predicted the industry will grow from $10.3 billion in 2018 to $39.4 billion in 2023.

The market analyst firm predicts the industry will grow from $10.3 billion in 2018 to $39.4 billion in 2023. Europe is expected to enjoy the swiftest compound annual growth rate as medicinal cannabis is increasingly rolled out by a number of countries on the continent.

That is coupled with a public healthcare system that covers a number of patients in the region, ensuring the state meets the majority of the costs. The report only lists one European firm – Stenocare of Denmark – among the world’s 13 leading cannabis companies, a group that includes three American firms, one Israeli producer and eight Canadian companies.

Europe largely relies on imports from Canada, Israel, and Australia to meet growing demand for medicinal cannabis, but others are increasingly gaining access too. There is also a rising trend for marijuana cultivation across Europe.

Denmark is already a leading producer, but large Canadian firms are moving into countries like Greece, Malta, and Portugal and setting up operations. Canopy Growth has pledged to spend €100 million ($114 million) in boosting its European presence after calling the EU the most exciting market outside of Canada. It is looking at Italy, Greece, and Spain to launch European hubs.

International Cannabis Corp has just moved into Greece and Portugal, adding to operations in Switzerland and Malta, while American firm Columbia Care has also set up a base on Malta.

However, Markets and Markets estimates that recreational cannabis use will drive more growth than medicinal cannabis over the next five years. Only Canada and Uruguay have currently rolled out retail industries for recreational marijuana, and Canada is blighted by supply issues. But 10 US states also permit recreational cannabis use and the report’s authors say North America will remain a powerhouse in the industry between now and 2023.

The researchers claim that the flower segment will continue to dominate the market as flowers contain higher levels of THC, flavour and aroma, making them preferable for recreational users, while they also act faster than derivatives for patients seeking pain relief.

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