The article was published on la.lv
The “cannabis reform” is currently taking place across the world — not only in the United States, where it has been a hotly debated topic for many years, but also in Europe. Some experts acknowledge that cannabidiol (CBD), an oil derived from hemp, does not cause addiction and that the use of this substance does not have harmful effects on the human body.
The use of cannabis, which is being intensively researched, touches the economy and medicine — but first and foremost, politics. A legal opportunity to process cannabis at least into extracts with medicinal effects signals that the given country is “on the right side of history,” meaning aligned with the progressive rather than the stagnant.
CANNABIS — A NICHE IN THE ECONOMY WITH POLITICAL SIGNIFICANCE
The European consumer market is seeing a growing influx of hemp‑based products — ranging from high‑quality cannabidiol (CBD) items available in supermarkets to health‑food shops offering hemp seed oil, hemp mayonnaise, and various other products.
Such products are already appearing on the shelves of major grocery stores in Germany, not to mention hemp‑infused spirits found in various alcoholic beverages such as vodka, gin, and certain types of rum. At the end of November, the UN and the European Commission announced that cannabidiol (CBD) has finally been removed from the list of narcotic substances and is now classified as food, creating broad business opportunities for the production of diverse products.
In October 2020, under close public scrutiny, the Italian government circled around the question of legalizing the cannabidiol/hemp market. In November, Italy’s Ministry of Health finally decided that cannabidiol derived from hemp is not a narcotic and does not cause addiction. Thus, CBD in Italy went from being widely available to being banned — and now once again is freely accessible.
Italy positions the hemp market as one of the narrow niches within agriculture that holds growth potential. Industry, too, is beginning to exert pressure toward shaping European regulation in line with the idea of economic resilience. As in Germany, the state here is likewise inclined to develop industrial infrastructure.
Hemp is unlikely to save the agriculture sectors of European countries; economically speaking, it can only be a small, well‑growing, attractive niche. The real meaning lies in demonstrating the correct political identity.
BALTIC HEMP PROSPECTS
Latvia has advantages but also challenges when looking at the development prospects of hemp. Latvia is among the few European Union countries where hemp can be grown for any industrial use, yet the use of hemp flowers in food remains problematic.
However, sector experts see an opportunity, for example, to open space for entrepreneurs who could produce semi‑finished products for export, supported by favorable legislation. There are also possibilities in developing new products and recipes. One of the hindering factors is weak cooperation and volumes that are not large enough to be attractive beyond Latvia’s borders.
Lithuanians have been more successful in combining expertise with investment, whereas Latvia lacks a serious processing facility and investment in the sector. Latvia’s strength lies in its knowledge of how to grow hemp, as well as several strong hemp seed varieties worth preserving. The challenges stem from an unstructured legal framework that needs modernization.
At present, the entire European market faces another problem — the local market is unprotected. In the Czech Republic, Canadian oil is being sold, while Asia ships fiber to Europe at lower prices. The production costs of Europe‑made products are comparatively high. Hemp protein and hulled seeds are more expensive than nuts and peanuts, which means high‑quality marketing is essential to promote the sales of hemp products.
Estonia has progressed further than Latvia, where hemp cultivation currently covers about 1,000 hectares. Estonia’s volumes reach approximately 2,500 hectares per year, according to 2019 data. Over the past decade, Estonia has increased its cultivation area from a few hundred hectares per year to as much as 3,000 hectares annually. In Estonia, a protein‑powder production facility is currently under construction, and a cannabidiol extraction plant is also in the development stage.
In 2021, Lithuania plans to process 5,500 hectares of organically grown hemp. As in Latvia, Lithuania’s greatest concern is the unstructured legal framework — full support is needed to legalize the entire processing cycle of this crop. The capacity of the Baltic market could reach as much as 50,000 hectares per year. Processing and extraction companies in Latvia and the Baltics have strong business opportunities that should be utilized — while, of course, maintaining all the necessary health and safety restrictions.
The market is growing rapidly, and a share of it should be claimed. For example, in 2020 alone, U.S. consumers purchased cannabis products from legal retailers worth around 17.9 billion dollars. This is an impressive increase compared to 2019, when the total reached 10.7 billion.
MEDICAL TRIALS IN EUROPE
At present, it is not entirely clear when the medical reform will be implemented — specifically, broader rights for doctors to prescribe cannabidiol‑containing medications to qualified patients — yet research of various levels is underway in many countries.
The founder of the medical‑cannabis industrial company Cannovum AG, German economist Pia Martena — one of the key enthusiasts of medical application — first became acquainted with legally permitted hemp while studying international business in the Netherlands. She is well aware that hemp still carries a very poor reputation in Germany, yet hemp is not only narcotics, weeds, or cooking oil — it is something more, especially in the context of medical use. This is why, in her view, Germany needs a hemp revolution.
It is expected that in the second quarter of 2021, French medical trials will begin, and overall this would create a stable “medical‑cannabis” bloc within Europe’s wealthier countries.
THE DEMOCRATS IN THE UNITED STATES ARE SETTING THE POLITICAL TONE
On December 4, last year, the U.S. House of Representatives voted to legalize marijuana at the federal level, as well as to expunge certain convictions of Americans sentenced in connection with “weed.”
In South Dakota, voters agreed to legalize the hemp market simultaneously for both medical and recreational purposes. In New Jersey, the referendum granted permission for a legal market.
Still, there are countries — New Zealand, Germany, and others — that remain cautious. Germany has postponed further reform, as a recent proposal in the Bundestag to allow unrestricted adult use of marijuana was rejected. It is likely that this decision will need to be revisited, as even the media are loudly and anxiously reporting a sharp increase in marijuana use, for example in Berlin.
WHAT DOES THIS MEAN FOR 2021 AND BEYOND?
The so‑called “recreational‑cannabis” reform on the election agendas in the United States and Canada is pushing the discussion forward globally, even if at a slower pace. Considering those who are currently ready to engage in “cannabis reform” — supported by an increasing number of U.S. states — the medical market is growing rapidly worldwide, and adult‑use consumption continues to expand.
On January 6, New York State Governor Andrew Cuomo renewed his pledge to legalize marijuana use in New York, proposing the creation of a new office to regulate the market and licensing opportunities for communities most affected by disparities in drug‑related legislation.
This will be the third attempt by the Cuomo administration to legalize marijuana; similar efforts have been made every year since the Democrats took control of the legislature in 2019, mainly due to disagreements over how to distribute the lucrative tax revenue from marijuana sales. However, in 2021, given the profound effects of the coronavirus pandemic, the pressure to legalize marijuana is likely to be much greater.
WHICH SIDE OF HISTORY WILL WE BE ON?
Engaged analysts such as Kyle Jaeger even argue that one of the most significant legacies of Joe Biden’s presidency will be the “marijuana revolution.” Even though U.S. states are now legalizing marijuana use on a broad scale, one must not forget how many decades these battles have taken. That is why rapidly legalizing marijuana in most countries would be highly premature.
Many people have driven this fight forward, and George Soros has been among the most active advocates from the very beginning. As one of the largest sponsors of the Democratic Party, he has long been aligned with the party’s direction — and now this goal is about to be achieved.
During his visit to Riga, Joe Biden urged Latvia to crack down on insolvency administrators — and Latvia did so. More broadly, the Democrats have devoted significant attention to supporting Latvia’s progress for many years. It is easy to imagine that during his presidency he will issue further guidance to Latvia (as well as to other countries), as befits a hegemon. Therefore, it is difficult to imagine how Latvia could avoid following Democratic policy regarding the use of hemp, at least in food and medicine.
