Smoking Recreational Cannabis in the European Union
Ask any American about Amsterdam and one of the first things they will mention is that it’s legal to smoke marijuana there. There are other carnal pleasures to be had in the city of canals, but if you’re Gen X and somewhat well-traveled (meaning you’ve been somewhere outside the U.S. other than Cancun), you probably recall Amsterdam as being the one place you always wanted to go – because pot cafes. What American cannabis aficionados may not know is that there are other interesting stories to tell about cannabis in the European Union that are not so well known.
Ever heard of Lazarat, Albania? It’s a place where they were growing pot at an industrial scale, and in 2014, a police force 800 strong descended on the town. After a serious gun battle, rocket launchers and all, they managed to burn the single largest bowl mankind has ever seen when they torched 102 tons of marijuana consisting of 530,000 marijuana plants worth about $8.2 billion – more than half the entire country’s annual GDP. We went up there not long afterwards and had a look around:
Sure enough, there was a visible police presence and not a plant to be seen.
Cleaning up Lazarat may have been a good thing though for the future of legal marijuana in Europe. While Albania isn’t a part of the European Union, we were interested to understand more about the state of recreational cannabis in E.U. countries that are more forward-thinking. What prompted us to take a look was the news from Aurora Cannabis (TSE:ACB) a few weeks ago that a massive Danish tomato grower, Alfred Pedersen and Son, has dedicated a significant amount of their tomato growing operation to growing weed – like 120,000 kilos of it a year – at their massive greenhouse compound in Odense Denmark:
We had a look around their farm and sure enough, a whole bunch of hardworking
Danes immigrants were retooling massive greenhouses like the ones seen above in preparation for growing some serious dank. According to the press release on Reuters, all this cannabis is being sold mainly to Scandinavian countries. So what about the recreational marijuana market in Europe? Is there one? Sure, you can probably score a sack near any major bus station in Europe but we’re getting too old for that, and our employee manual says that we’re not allowed to use the office slush fund for posting bail anymore. In case you’re wondering, here are all the places you can end up in the clink for minor cannabis possession in the European Union:
While incarceration may not be possible in some countries, here’s a daunting fact. Not one national government in Europe has legalized cannabis sales for recreational use, and all countries have prison sentences for illegal supply. So what about the Amsterdam coffee shops? According to the EMCDDA, “a system of cannabis supply has been illegal but tolerated in the Netherlands since the 1970s“. Since most of you probably clicked on this article because you want to get stoned out of your gourd in the Europe Union while experiencing all the “culture” on offer for you and your oversized backpack, let’s get down to brass tacks here. The only other country in Europe that has created a cannabis ecosystem that thrives despite illegality is Spain.
In order to better understand the convoluted state of marijuana in Spain, we paid a visit to the largest city in the Catalan region, Barcelona, which you may have seen in the news lately because they want independence from Spain. One of those people looking for independence and a fresh look at marijuana is long-time activist Karulo Abellan seen here rolling a spliff and giving the sign of the marijuana leaf which stands for Spanish activism:
Karulo is quite a well-known activist with a pedigree of establishing many firsts in Spain’s movement towards legalization. He’s one of the founders of Canamo Magazine, the High Times magazine equivalent in Spain. He spent his youth “networking” at Amsterdam cafes where he managed to connect with people like Sir Richard Branson, Bolivian president Eva Morales, and even Mr. Nice himself. Karulo went on to open “L’Interior Barcelona Growshop ” the first grow shop outside of Holland, along with the first cannabis club in Barcelona. (For you Yanks out there, Holland is the country that surrounds Amsterdam.) Because of his thought leadership, there are now between 250 – 300 cannabis clubs in Barcelona alone and around 1,000 in all of Spain. He helped us understand how these clubs operate.
People of any nationality with a government-issued I.D. and a Spanish residential address to put down can join a club for a membership fee of somewhere around 30 Euros which gives them access to a club for one year. Oh, and you’ll also need an existing member to vouch for you. Once you’ve been vouched for and your membership ID is in hand, you can then charge it with some cash that buys tokens. Grams of hash and marijuana buds can then be
purchased exchanged for tokens at reasonable prices (anywhere from 8 to 12 Euros a gram). It’s essentially one big loophole that we’re not going to even try and explain, but just don’t mistake this loophole for legality. The clubs have to apply for a license that is tied to a location (no more licenses are available for purchase), and they have the risk of then having to grow marijuana (basically) illegally and then transport it (again, illegally) to the dispensary members club:
Ideally, people shouldn’t have to sneak around trying to find loopholes and taking risks said Karulo. The capabilities of Barcelona cannabis growers today means that if the region ever separated from Spain, they would have legal recreational cannabis in almost no time. (Spain’s climate and culture of growing weed – more than any other country in Europe – means they probably supply at least 40% of the cannabis sold in Amsterdam coffee shops.) Still, Spain remains 10-20 years behind the U.S. and Canada when it comes to the legalization of recreational cannabis. Another person who knows the situation well is the Founder of CHK Solutions, a Spanish firm that is working to professionalize the cannabis industry in Europe and working with clients in Switzerland, Italy, and of course Spain.
He’s no stranger to what’s happening in Canada and USA with recreational cannabis and has spent time with the big Canadian growers and the Arcview Group (one of the biggest cannabis-focused venture capital networks out there) to help them better understand the potential of recreational marijuana in Europe. He believes that the move towards legalizing medical marijuana before recreational marijuana is what Europe should have done. He’s now pushing for that with the help of Karulo who is working for CHK Solutions in the area of seeds and grow management. They’ve established exclusive relationships with marijuana growing technology companies from Canada and USA to bring the tech to Europe which they sell to growers (some on the black markets). That way they’ll be ahead of the game when the legalization of recreational marijuana finally happens. Unfortunately, that may not happen anytime soon.
We sat down with Spain’s top cannabis attorney and activist, Oriol Casals, to hear his thoughts on the situation in his office which happens to be located in one of Gaudi’s last buildings that aren’t a museum.
Oriol is no stranger to tangling with the Spanish legal system. In July of 2017, he amassed 50,000 signatures to pass a law that recognized the rights of the people to smoke cannabis in their own homes (118 in favor and 8 against) and also provided a legal framework for associations to provide 150 kilos per club a year. The Spanish President suspended the new law shortly afterwards arguing that Catalonia has no competencies and defending Spanish drug laws that date back to 1967. Oriol thinks Spain’s 1967 drugs act which forbids consumption of any drug (if not for medical or scientific reasons) is archaic, and that Spain needs to abolish it. If the bill doesn’t even specify what the punishment should be, then how can it be “enforced”?
Oriol understood the importance of capitalism in advancing cannabis alongside the efforts of activists who sometimes don’t see the bigger picture when it comes to investing in the space. He thinks that investors should look towards the large pharmaceutical companies that are working with cannabis and who will be the first beneficiaries of medical marijuana. The right way forward it seems is to watch what happens with medical marijuana in the European Union. This looks promising, with countries like Poland and Germany recently passing laws making medical marijuana legal.
Going back to the original stimulus for this article, Aurora Cannabis (TSE:ACB) is making a big bet in Europe by intending to produce 120,000 kilos of marijuana a year there. For now, recreational marijuana doesn’t exist in the European Union aside from loopholes like Amsterdam coffee shops and Barcelona cannabis clubs. Other countries like Portugal are extremely lenient when it comes to penalizing people who have marijuana on their person, and Switzerland is actually the only country in the E.U. that allows you to grow four marijuana plants for personal use. Some progress is being made, but clearly nothing like the progress that has been made in the U.S. and Canada.
Should cannabis ever be legalized in Europe, it will open a floodgate of revenues for licensed growers. We’ll continue to watch the moves being made in the E.U. by growers like Aurora Cannabis (TSE:ACB) and Canopy Growth (TSE:WEED) who also moved into Denmark recently. Should activists like Karulo finally realize what they’ve been working a lifetime for, those with boots on the ground like CHK Solutions stand to reap the benefits. For retail investors, the only play on marijuana in the E.U. seems to be investing in the Canadian growers. However, there is an even more important question that investors should be asking right now which is where the hell can I smoke some dank in Europe? We assume everyone’s already familiar with Amsterdam, so that pretty much leaves Spain.
If you’re in Barcelona and you’d like to take part in the cannabis club culture, you may want to reach out to Russ Hudson, an American who now works in the burgeoning Barcelona cannabis scene and kindly introduced us to everyone we interviewed in this article. Russ operates his own consulting service at The CannaBizConsultant which provides services around the globe to the cannabis industry (like working as a fixer). If you’re someone who can follow directions closely, and will uphold the image of professionalism that the best cannabis clubs in Barcelona have come to expect, reach out to firstname.lastname@example.org and introduce yourself. He’ll try and sort you out with a club membership.
If you're going to invest in cannabis stocks, there are only a handful you should hold. Become a Nanalyze Premium subscriber and we'll tell you which ones. Sign up, then send us an email and we'll point you to the appropriate research pieces.