In October last year the Canadian Government under Justin Trudeau further liberalised the use and cultivation of Cannabis, leading to what Canada’s second largest-daily The Globe and Mail has called a veritable “gold rush” in the industry.
Shares of all listed marijuana companies have risen 96.56 % in August itself. By comparison, the broad S&P 500 index, which lists 500 companies across 11 sectors, rose by just 0.74% , and the financial sector rose by 1.13%. Pharmaceutical companies are keeping an eye out for this rise especially because it is estimated that cannabis could eventually end up becoming a component of, or even end up completely replacing, 43% of the drugs in the market.
This meteoric rise of the Canadian marijuana market is of direct consequence for the European Union considering the fact that the 28 EU member states have one of the world’s largest free-trade deals with Canada (CETA: Comprehensive Economic and Trade Agreement). CETA has eliminated 98% of the tariffs between Canada and EU and this is what has led a number of smaller brand Canadian companies to open offices in Europe. Leading the pack is Okanagan Cultivators, a British Columbia based craft cannabis company that focuses on organic premium medical cannabis, which has now opened its offices in Prague, Czech Republic.
“Prague was naturally our first choice,” says CEO Mark Miller, “considering its central location in Europe, liberal laws, booming pharmaceutical industry, and ease of doing business. We’ve already seen keen interest from investors for our plan to open an additional medical dispensary here by 2020.” Miller isn’t the only one setting his eyes on Prague, the city recently concluded The International Fair of Cannabis and Medicinal Herbs or ‘Cannafest’ where over 300 exhibitors, including Miller’s company, made a bid to cash into the booming market.
With the free-trade deal between the EU and South America (Mercosur) being heavily delayed because of obstructions, and the US-EU trade relations at a historic low under Trump’s policies, Canadian companies might just have ended up with the best possible window for a cannabis-powered gold rush in the European Union.