2020: Year in review
2020 has been a year of firsts, not least for the cannabis industry. There have been some major positive developments along with some setbacks too.
The year ended with the UN making its biggest shift in cannabis policy since the creation of the global prohibition framework, by recognising the medical potential of cannabis. Meanwhile, in the UK, patients around the country are receiving their medical cannabis cards (CanCards), finally offering the hope of freedom from arrest.
The team at Hanway have remained committed throughout 2020 to;
Supporting the mainstreaming and acceptance of the global cannabis industry
Helping entrepreneurs build and grow their businesses in the cannabis sector
Cannabis continues on its rocky but increasingly inevitable path to mainstream acceptance and big business. New Zealand voters’ narrow rejection of cannabis legalisation show that it is not inevitable in every instance, but the scales have weighed heavily toward progressive reforms. Cannabis is no longer just a policy goal, it is a thriving industry formed to meet the vast demand for legal access.
There have been great strides in the globalisation of cannabis with an increasingly international supply chain for the products patients receive in European medical markets. Notably several tonnes of GACP flower have been shipped to Europe by Fotmer Life Sciences. EMMAC have utilised their integrated multi-country supply chain to great effect, significantly undercutting the black market by providing UK patients with prescriptions as low as £80 per month. Meanwhile, more countries in Latin America, the Caribbean, Africa and Asia have reformed their laws with hopes of participating in the supply chain.
Hanway has been involved in some exciting firsts for the cannabis industry. We assisted an applicant in winning the tender for one of the first 10 legal licences to cultivate recreational cannabis in Europe, alongside our friends at Blume. At long last the Netherlands is taking the first step to legalising and legitimising cannabis cultivation for adult use. With retail coffeeshops already in place with existing customers, the Netherlands is in a prime position for a rapid roll out avoiding any of the implementation issues Canada or Uruguay faced.
The year started off with a bang as we announced the entry of Savills into the market through our new joint venture - Crop17. This venture brings together the expertise of Cambridge HOK, Savills, Subrosa & Hanway to provide an end to end service for those looking to enter the cannabis market. Along with our partnership with Agritech E to provide content and support for those in the agritech field looking at cannabis opportunities, Hanway can now offer a full suite of advice and support in this area.
Hanway completed its sale of Cannabis Europa in November 2019. This marks our first successful exit of a company we incubated and is the model that we will look to build upon in 2021 as we begin to focus more on launching and operating ventures that fix problems in markets created by changing regulations.
First Wednesdays monthly meetups in London, Paris and Amsterdam were put on ice to help prevent the transmission of Covid-19. Unable to see all your lovely faces in the flesh, we’ve pivoted the organisation to providing more support for entrepreneurs looking to build businesses and raise capital in the European cannabis sector. The FW European Medical Cannabis Ecosystem (EMCE) report was the first detailed mapping of the European cannabis industry landscape.
This November we launched a co-authored report Brightfield Group looking at the medical cannabis market across the continent, which produced new market sizing figures and identified winning strategies for operators. There is now more reliable information than ever before to help plan cannabis businesses in the UK & Europe. And if you’re still thirsting for cannabis insights you can check out our new weekly video blog in partnership with Volteface think tank, All Good Points.
2020 has been one of the most significant years for the cannabis industry in the USA. Cannabis businesses were deemed essential and allowed to continue trading during the pandemic in a signal of their importance to patients, customers and state governments. Five new markets were voted into existence through ballot initiatives at the election and the Democrats victory provides hope for federal reform which was marked with the historic vote in the House of Representatives to pass the MORE Act.
Europe’s progress has been slower than the USA but with a major list of historic firsts nonetheless. In an emotional victory, Billy Caldwell finally legally received his medication on the NHS. Further progress was made for UK patients when the Police Chief Federation supported a national cannabis card scheme for patients to help them avoid arrest. The European Court of Justice ruled CBD is not a “narcotic drug”, a decision which will help open up the European CBD market and which reverses the European Commission’s contrary opinion. European CBD companies will now finally be able to progress through the Novel Foods process and eventually legally sell their products across Europe with harmonised rules at the European level.
In terms of the outlook for 2021, we’re expecting a lot more entrepreneurial activity and capital raising. There has been much talk about the UK’s Financial Conduct Authority posted guidance on listing cannabis businesses onto public exchanges, paving the way for listing cannabis businesses on major exchanges in London. However, the anticipated timelines for this consultation process to complete means entrepreneurs may have to look elsewhere for capital in the short term. We’ll be watching the Scandinavian markets. Expect more listings following in the path of Stenocare, Europe’s first (not pharmaceutical) medical cannabis IPO.
The European industry is on a high tech, life science trajectory and the medical market is expected to become more and more like the pharmaceutical market. Expect more innovative startups tackling issues around patient data, medical devices and manufacturing processes raising capital and launching into the sector.
With cannabis extracts due to move through the Novel Foods process, the prospect of fully legal EU & UK wide sales for these products, FMCG interest in the European cannabis sector is at an all time high. Hanway looks forward to announcing new partnerships which will help existing FMCG businesses maximise the opportunity in this area.
The recent announcement of an imminent acquisition of Tilray by Aphria seems to set the scene for next year. Consolidation is a must for companies that need to secure scale and stability to take significant market share. Scale and capital will be essential for cannabis companies as they face increasing competition from large FMCG businesses looking to utilise cannabinoids and cannabis extracts as ingredients in their products.
Through a tumultuous year, we have faced challenges, as have many of our clients. We remain proud that we have kept our team together during the toughest year for business since the second world war. Next year we hope to watch the world reopen with the roll out of vaccines for Covid-19 as we move on to another historic year for the growth of this industry.