Could This Mysterious Statement Lead to the Legalization of Marijuana in the EU?

A high-profile meeting on cannabis law in the E.U. on July 15 with delegations from Germany, Malta, Luxembourg, and the Netherlands produced a cryptic but illuminating nugget about how legalization would proceed. The eight little words “The existing order will not be a tenable option” are included in the joint statement that all nations present at the meeting, except for the Netherlands, have signed. That is a dead giveaway for impending significant changes to marijuana policy.



Coupled with Germany’s actions in June to begin the legalization process by assessing the relevant client safety criteria and having hearings, it is evident that a green wave of legalization inside the E.U. may be developing soon.

Although there aren’t any votes planned that may alter the legislative landscape in a single day, investors see this as good news since it gives them time to prepare to profit from legalization if it occurs. We need to find out what else is going on with the E.U.’s marijuana policy and concentrate on the businesses that are most likely to be affected.

Nothing is Certain

Nothing is set in stone, but it’s essential to understand the context of what the ministers were talking about, even if they acknowledged that the current legal legalizing hashish is not suitable in the long term.

Instead of explicitly addressing legalization for adult-use recreational purposes, the joint statement focused a lot of attention on the more banal concerns of “public health and public safety.” Or, to put it another way, the ministers were struggling with the issue of how to carry out the current set of marijuana laws inside the E.U. in a way that upholds the general welfare. Although legalization is likely to be one policy option to address that problem in an economically beneficial way, it is also unlikely to be the only one utilized to control marijuana use and distribution.

However, it is difficult to overstate the importance of several countries getting together and deciding that the current legal frameworks controlling marijuana need to change to take into account both practical realities and economic possibilities. And the present action is not only the joint declaration from July.

Additionally, in July, a particular group of ministers from the European Parliament wrote to all other members of the Parliament, urging them to participate in a pan-E.U. Discussion regarding recreational marijuana usage. This might kick off a more concentrated policy drive, and it’s possible that momentum will pick up very quickly over the rest of the year and into 2023. But which company is most positioned to grow as soon as word of legalization spreads?

Also read: Senate President of New Jersey Introduces Bill to Legalize Interstate Marijuana Trade

The European branch of this Canadian hashish conglomerate is already turning a profit.

In preparation for legalization in the European Union, Tilray Manufacturers (TLRY 5.73%) have set up the necessary infrastructure there and are now making money.

With its growing facility in Portugal, the company has access to major European markets like Germany, Italy, and Poland without paying import taxes. It now controls 20% of the German medical marijuana market and, combined with its other European businesses, contributed to more than $53.8 million in global sales of hashish products in the fiscal year 2022.

Also read: A Third State Will Vote On Marijuana Legalization This November

In addition, it extended its medical hashish activities in Luxembourg and Malta in the middle of 2021. Despite the relatively modest size of these markets, the company is ready to take advantage of any shift in the law that makes recreational sales of its products possible.

Tilray’s situation is almost identical in larger markets like Italy and Germany, so it’s reasonable to foresee a massive increase in the company’s stock price in the event of further progress toward legalization.

Even with a major catalyst on the horizon, Tilray is not a perfect company, and investors should proceed cautiously. It loses money and can’t manage to keep its market share in Canada, where it should be the strongest. It makes sense to stay on the periphery until it can prove it can compete effectively in the European Union.

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