Global cannabis adoption is accelerating at a rapid rate, with Mexico the latest country to legalize recreational use and ongoing investments by cannabis firms to expand into new markets.
Curaleaf Holdings Inc. (OTC:CURLF) the biggest cannabis firm in the U.S., struck a deal to enter the European market last week.
Mexico Legalizes Recreational Pot
Bloomberg noted that Mexico's position on marijuana has changed rapidly. The country decriminalized possession of small amounts of the drug in 2009 and then legalized limited medical use in 2017. Mexico implemented broader medical marijuana usage early this year, not long before the latest bill legalized recreational use.
The nation's population is nearing 130 million, which put it on the edge of becoming the world's largest legal recreational market for cannabis. Some U.S. lawmakers said they would make legalizing cannabis a priority this year. They could start to feel the heat even more as the U.S. will be between the two legal recreational markets of Canada and Mexico.
Bloomberg explained that Mexico's legalization of cannabis is especially significant for global adoption because many multinational alcohol, pharmaceutical and consumer products companies already have a presence there.
Poseidon Asset Management's Emily Paxhia told Bloomberg that this fact makes the nation an attractive place from which to export marijuana and related products. She added that companies could "do high-quality manufacturing in Mexico for a low cost." The firm invested about $100 million in cannabis around the globe, including $15 million in Mexico.
Curaleaf To Acquire Emmac Life Sciences
As global cannabis adoption continues, companies will continue to expand into other countries. Bloomberg predicts that the movement of products into countries that legalize the drug will occur even faster than global cannabis adoption.
Curaleaf entered into a deal to buy Emmac Life Sciences for $285 million, which will give it a presence in Europe. Curaleaf Executive Chairman Boris Jordan told Bloomberg in an interview that they "want to get in early" in Europe. Emmac's legal status in the European Union should allow Curaleaf to begin selling its CBD products and marijuana brands quickly after the transaction is completed.
Emmac currently has a presence in eight countries, but EU laws suggest national borders won't slow cannabis adoption the way they have in North America. Additionally, Jordan noted that several other countries, including Poland, Ukraine, and South Africa may be moving toward legalization. Regarding Europe, he said Europe is "a great hub to attack those markets from."