There are a few countries in Europe on their way to legalise recreational cannabis, with existing legal framework for medical cannabis. Germany is on its path, with general overview, plans also come from the Czech Republic, whilst Luxembourg will vote on legalisation soon. Countries want to legalise recreational cannabis in order to provide safe products, benefit from regulated markets and fight with illicit markets. However, what is the impact of legalisation on the already existing medical cannabis market?
Patients’ point of view on legalisation impact
Firstly, legalising cannabis for recreational use frequently results in a greater acceptance of cannabis in society. Additionally, more people can become aware of easier access to medical cannabis products. As a result, programs and regulations including medical cannabis may receive more support. Eventually, this might improve patient access, reduce judgments, and raise financing for medical cannabis research.
Moreover, the competition among cannabis growers and retailers could grow as a result of legalisation. As such, it may have an effect on the price and availability of medical cannabis products. The expansion of the recreational market may result in lower prices for cannabis products generally due to economies of scale and greater competition. Patients may also benefit from this, as cheaper prices can make their medication more accessible. In addition, certain countries that allow marijuana for recreational use may put additional taxes on cannabis-related products. Such fees might generate money for medical marijuana programs or lower patient costs.
What is more, the recreational cannabis market often determines product innovation as companies want to fulfil the demands of consumers. This innovative thinking may also result in the creation of new formulations, methods of delivery, and strains. This may give medical cannabis patients access to a greater variety of products that fit to their individual medical requirements. For people using medical cannabis, more accurate and effective choices may be available. Similarly, legalisation may open up additional possibilities for cannabis study. In order to perform studies on the medical uses of cannabis, researchers may have better access to cannabis samples, funding, and regulatory assistance when legal restrictions are removed. This further research can assist increase the amount of data supporting the use of cannabis for medical purposes and help us understand the therapeutic potential of the plant.
Medical cannabis companies point of view – challenges
When determining the company’s future strategy, it is important to take into account all sides – good and bad. Of course, cannabis legalisation may create difficulties for medical cannabis businesses. With legal cannabis use, the market tends to get more competitive. New businesses enter the market to benefit from the growing customer base. In 2022, the European medical cannabis industry had a value of US$ 1,743 million. Looking ahead, IMARC Group projects that the market will increase at a compound annual growth rate (CAGR) of 22.1% from 2023 to 2028, reaching US$ 6,458 million. Medical cannabis businesses may be impacted by the increased competition in such a developing market.
Additionally, the availability of cannabis for recreational use may change consumer preferences and habits. Some medicinal cannabis users relying on prescriptions may move to recreational use if they find it easier or affordable. Thus, the number of clients for medical cannabis businesses may decline as a result of this change.
Moreover, regulations certainly change as a result of recreational cannabis legalisation. This can have an impact on medical cannabis businesses’ operations. By favouring recreational growers or retailers, for instance, certain policies could put more demands or limitations on medical cannabis businesses. Also, medical cannabis may be subject to reimbursement programs or be reimbursed by insurance in some areas. This is not popular in Europe yet, but we have heard about such an example from the UK recently. Cannabis legalisation can influence changes in pricing, reimbursement procedures, or insurance coverage. Eventually, it can have an impact on the ability of businesses who produce medicinal cannabis to remain profitable.
Companies that produce medical cannabis often invest in R&D to create products suitable for particular medicinal illnesses. Legalising recreational use could cause businesses to put more focus on products for the larger recreational market. So, potentially it may shift attention away from medical research and development. This might have an effect on the development and accessibility of cannabis products designed specifically for medical use.
Medical cannabis companies point of view – opportunities
Despite these possible difficulties, the legalisation does present chances for medical cannabis businesses. Firstly, as stated at the beginning, legalising cannabis for recreational use can increase acceptability generally. It can also reduce the negative stereotypes attached to cannabis use. This could encourage more people to seek out medicinal cannabis treatments, increasing the number of potential customers for medical cannabis businesses.
In addition, after legalisation, medical cannabis businesses may differentiate themselves by concentrating on specific medicinal products. They also can create formulations with certain cannabinoid ratios, or come up with delivery systems that suit the particular requirements of patients. They may find themselves a niche in the larger cannabis market by highlighting the therapeutic advantages and offering high-quality goods. Of course, medical cannabis businesses can work with doctors, scientists, and patient advocacy organisations to advance knowledge and understanding of the therapeutic uses of cannabis. They can develop trust within the medical community by forming partnerships and cooperating closely with specialists.
Medical cannabis businesses may have regulatory advantages over recreational cannabis businesses in some areas. These benefits may consist of reduced taxes, less strict advertising regulations, or unique licensing requirements. By making use of that, medical cannabis businesses can stay competitive and get to patients who prefer the direction offered by the medical industry.
Recreational cannabis legalisation can open up new overseas markets for medical cannabis businesses. Medicinal cannabis businesses with previous experience and a track record of providing high quality medical products may be in a good position to enter new markets, form alliances, or export their products as more nations consider legalising cannabis.
Should medical cannabis companies be afraid?
Thus, it’s important to keep in mind that the effects of legalising recreational cannabis on medicinal cannabis businesses might differ greatly based on the particular market and regulatory environment. Businesses are more likely to successfully go through the difficulties and profit from the opportunities. However, only if they strategically adapt to the changing environment, concentrate on product differentiation, prioritise patient care, and work in partnership with the medical community. In conclusion, while the legalisation of recreational cannabis can affect the medical cannabis industry, the effects depend on a number of factors.