The evolving cannabis landscape
As restrictions on the use of cannabis change, the regulatory landscape becomes ever more complex and fluid. Cannabis is now legal for medicinal use in over 20 countries, including Canada, the UK, Germany and Portugal. In the US, it is legal in many states, but remains a controlled substance under federal law. More countries are expected to liberalise their regulations this year.
The liberalisation of regulations relating to medicinal cannabis and wellness cannabinoids has driven an expansion of the global cannabis market. According to Euromonitor International, the global cannabis market (both legal and illegal) is worth US$150bn in 2019. In particular, the legal cannabis market, which was worth US$12bn in 2018, is expected to grow rapidly and constitute 77% of the global market by 2025.
At the start of 2018, there were a dozen cannabis companies that each had a stock market value of more than US$1bn. Traditional companies have also been investing in the sector, with pharmaceutical companies seeking partnerships to develop medicinal cannabis and alcohol and tobacco companies investing in cannabidiol (CBD) products.
Linklaters has a dedicated, global, multi-disciplinary team to support and advise clients on the key issues and considerations when operating or investing in medicinal and wellness cannabis companies. This is vital in a world where there are so many different and constantly changing regulations and laws, including the extraterritorial reach of some jurisdictions which could impact the proceeds of investment.
Hemp-derived CBD products are legal in the UK and available over the counter. In 2018, it was removed from the list of drugs in Schedule 1 under the US Controlled Substances Act.
CBD products have been developed and marketed towards mainstream consumers across the food and beverage, beauty, fashion, health and wellbeing industries. These include CBD-infused oils, face creams, tea, sweets and pet products. Additionally, non-alcoholic cannabis infused drinks are being developed as potential substitutes for alcohol.
Medicinal cannabis is legal in over 20 countries. In the US, it has been legalised in over 30 states, but remains a controlled substance under federal law.
Its uses are wide-ranging and include the treatment of rare forms of epilepsy and spasticity from multiple sclerosis. It is also used to treat severe vomiting or nausea caused by chemotherapy and mental health conditions such as PTSD.
Canada became one of the few countries, and the first G7 country, to legalise recreational cannabis in 2018. Recreational cannabis is also legal in Spain (if cultivated for personal use) and in at least 10 US states, with numerous other states actively considering legalization (although it remains a controlled substance under federal law).