The Future Of The Cannabis Industry In Europe: Q&A With Curaleaf International CEO Antonio Costanzo

In March 2021, Curaleaf Holdings, one of the largest cannabis companies in the United States, acquired EMMAC Life Sciences Group (now Curaleaf International), one of the largest vertically integrated companies in the European medical cannabis landscape.

Given his experience in the medical cannabis industry, Antonio Costanzo has noticed clear progress in the market. He also thinks European countries will allow the use of recreational cannabis in the next four years.

I interviewed Curaleaf International’s CEO Antonio Costanzo about the situation of medical cannabis, the current challenges, and the future of cannabis in Europe.

What are the key differences you have noticed between the European and the North American market?

Antonio Costanzo: The fundamental difference lies in the standards of the regulation requested by a company. In Europe, businesses have to comply with the highest possible pharmaceutical standards, including good manufacturing practices (GMP). It is not the case in the United States and Canada, where their standards are lower than the pharmaceutical ones and specific for the cannabis industry. Curaleaf International has already complied with the European regulation because it developed it with EMMAC. Currently, we have cultivation facilities in Portugal, two pharmaceutical labs in Spain, and the United Kingdom that comply with European standards. In this way, we can sell our products across Europe, including the UK, Germany, Italy, and Switzerland.

What are the main issues of the European medical cannabis market right now?

The European market is open to medical cannabis. Sometimes some delay may happen on the regulatory front. Another challenge comprises ensuring that doctors know how medical cannabis works and how to use it. The prices of medical cannabis products depend on countries. However, they are to decrease as medical cannabis products have become more accessible to patients. In our case, the prices dropped because Curaleaf International is a fully integrated company. In those countries where medical cannabis products are not yet reimbursable, we can sell them at a lower price than the average price of the illegal cannabis sold in the black market.

What products do cannabis patients need?

The product that we can provide to European patients depends on domestic regulation. Today, the only available products are flowers and extracts. However, we think to provide more product formulations soon, including tablets, creams, gel, and vaping devices. But, at the same time, we need an evolution on the regulatory front in certain countries.

What is the role of Research and Development (R&D) in the medical cannabis industry? What to expect from this sector in the future?

R&D is crucial in this industry. We fund several research studies led by the Imperial College London in the United Kingdom. We also work with several universities in Italy and Spain. R&D helps us understand better how cannabis compounds work, their impact on patients, and how we can improve the quality of our products. We will see increasing research on medical cannabis. But this will take time as cannabis is a complex plant, as we have to understand how all compounds work and interact with each other. While we had no problems researching in Europe, we faced some issues in the United States. But because of the United Nations’ reschedule of medical cannabis, research in the United States has become more accessible.

What are the most profitable European countries regarding medical cannabis?

Germany is today the biggest market in Europe, followed by Italy and the United Kingdom. France launched a pilot project a few months ago. Spain is expected to regulate medical cannabis in 2022. Italy and the United Kingdom have great potential. For instance, Italy was the third country in the world to legalize medical cannabis. But there has been some delay in implementing access to medical cannabis over the years. Today, Italian patients have limited access to medical cannabis because of the supply. However, Curaleaf International has managed, along with Italian medical cannabis distributor Farmalabor, to register one of our extracts as an (active pharmaceutical ingredient active API) in Italy. In a few weeks, we will ship our products to Italy. So, we hope this development will reduce the lack of cannabis supply for Italian patients.

What is the future of the CBD market in Europe?

CBD is an interesting market in Europe, although it is still very fragmented for several reasons. Big companies are not yet very committed, and the European regulatory landscape is not clear yet. The European Commission (EC) and European Food Safety Authority (EFSA) have recently validated a synthetic CBD novel food application submitted by Italian company Farmabios, who partnered up with us some months ago. If we complete this process, we will soon have an ingredient fully complied with in all jurisdictions in Europe. Also, the CBD market is also interesting as it can serve as a transition towards the recreational use of cannabis.

Do you think the legalization of recreational cannabis at the federal level in the United States can lead European countries to legalize it?

I do not think the current political discussion on recreational cannabis in Europe can be affected by the United States. European countries will move forward regardless of what is happening in North America, even if the United States, Canada, and Uruguay have paved the way to legalization. The U.S. federal legalization could speed up the process in Europe as it could make politicians even more comfortable to regulate it in their countries. In Europe, the Netherlands and Switzerland have introduced pilot projects to regulate recreational cannabis. Luxemburg and Malta announced they want to legalize recreational use of cannabis and decriminalize its cultivation. Portugal, Italy, and Germany are trying to legalize or decriminalize recreational cannabis through processes of different nature. We shouldn’t forget that cannabis has been illegal for over 70 years in the world. I think that stigma on cannabis is getting removed, and its perception is also changing thanks to medical cannabis development.