European Strategy &
Market Perceptions

European Question Time - March 2022 European Perception

Forethought we may have, undoubtedly, but not foresight - Napoleon Bonaparte

The green shoots of European adult-use ("Rec") legalisation are finally starting to sprout. It is welcome to see government mandates and proposed bills (Germany, Denmark, Portugal, Switzerland, Netherlands, Luxembourg) for Rec, albeit the concrete details remain outstanding.

These initiatives are a source for general excitement, much reporting and occasional opinion pieces. Ultimately, it falls on cannabis executive teams and strategic investors to ask the real questions, some include;

• If my base country designates pharmacies as the POS for Rec cannabis, how does my business configuration adapt to this? Should I strengthen relationships with pharmacy chains and broach the Rec concept now? How would this change my evaluation criteria for selecting distributors (e.g. prioritise pharma distributors with extensive OTC product channels)?
• Cannabis is still a Schedule I narcotic; International Rec cannabis trade is highly unlikely. How do I prioritise investment in grow/processing facilities by geography, assuming this restriction? Should I secure options to grow/process in multiple countries today?
• Is it conceivable that only GDP licenced traders (medical) would be assigned the right to wholesale distribute Rec cannabis? Or could a new licence class be created for Rec distribution (like in USA - Massachusetts or California)?

One thing to expect in Europe adult-use is governmental domestic protectionism with efforts to regulate seed-to-sale in a heavier form than the USA, perhaps incorporating pre-regulated pharma sales channels.

As a European medical cannabis company or new US entrant positioning itself for Rec, finding an adaptable configuration to react to legislative announcements will bear fruit. No-one wants to be stuck in the mud when the cannabis tide is rising.

Viva Las Vegas - October 2021 European Perception

Bright light city gonna set my soul, Gonna set my soul on fire, Got a whole lot of money that's ready to burn - Elvis Presley

An unprecedented whole-lot-of-money has been deployed into US cannabis this year - $3.7bn Equity raised & $5.0bn M&A closed for H1-2021, vs $1.0bn & $2.9bn respectively for all of 2020. It sets the stage nicely for the return of the annual Mecca of global cannabis professionals/investors to Las Vegas. How does Europe fit into this cauldron of excitement?

Murmurings of Europe Adult-Use cannabis have started to creep into our North American conversations. With German Adult-Use legalisation making the front page of BILD and a Canadian LP securing an option on a Dutch Adult-Use startup, we get asked about Europe's Adult-Use timing. At this point, there's enough to show a path, even if the usual politicking will delay the inevitable. For perspective, European progress is outpacing Calfornia's 1996-start medical cannabis journey; there are more reference markets now than ever, building momentum for new ones.

Our message in Vegas is to get into the pick of the litter of European medical cannabis; pick up invaluable operating assets now and you'll at least ensure you're in line for Adult-Use as a long term growth opportunity.

KOMAND works with North Americans to engage such targets in Europe. If in Vegas next week, we welcome your interest in Europe. Please contact us if you'd like to have a sit-down, we've a suite in the Palazzo Hotel.