2019 was an incredible year for the cannabis legalization effort, with landmark victories in countries like Canada, Ireland, Israel and Australia. Since then, an increasing number of countries — along with U.S. states — have reassessed legislation around the cannabis plant and shifted their stance on the so-called “war on weed.”
Both countries and states that have legalized cannabis have seen a wide range of socio-economic benefits, not the least of which are dramatically reduced crime rates, millions of new jobs and billions in increased tax revenue.
How feasible is cannabis in a COVID economy?
The momentum of 2019 has been significantly hampered by the emergence of COVID, as cannabis companies everywhere experience the scarcity of capital that comes with a pandemic-triggered recession. The ensuing market crash has also tanked cannabis company share prices, leaving investors wary of buying in.
However, the current volatility in share prices also presents an opportunity for shrewd outside speculators willing to bet on cannabis shares rallying in a post-COVID world — picking them up at rock bottom prices in the meantime.
While COVID has certainly slowed the growth of several industries this year, viable vaccines are now just around the corner, and economic recovery is all but assured. Let’s take a quick look at the prospective benefits for countries looking to legalize cannabis in the near future, as well as three countries most likely to take the leap within the next two years.
Opening Doors to Multiple Industries
It’s obvious the primary factor motivating countries to reevaluate their approach to cannabis is the multiplicity of socio-economic benefits enjoyed by countries that have already legalized it. But it’s worth noting that legalizing cannabis would also usher in other international industries, some worth billions of dollars in their own right. Here are two examples:
- The CBD industry was valued at approximately $4.6 billion globally in 2018, is projected to grow by more than 22% year-over-year on to 2025, and has created millions of jobs spread over dozens of countries. The CBD industry even has an arguable role in fighting climate change, given it directly incentivizes the creation of hemp farms.
- The terpene industry is entering the fitness, wellness and even the service industry with its infusion into balms, beauty products and designer beverages in countries where cannabis is legal. Currently, terpenes are sold by the bottle, or in larger amounts for B2B customers. With their popularity and utility as well as endorsements from celebrity chefs, musicians and athletes, terpenes are expecting to become a billion dollar market by 2024 independent of the cannabis and aroma industries.
Cannabis Legalization in Mexico
As of this writing, Mexico’s Morena Party controls both chambers of Congress. The party introduced a recreational cannabis legalization bill in October that’s widely expected to pass the Senate, due to widespread support from the public. The timing of the bill is no coincidence, seizing on the momentum of a 2019 Supreme Court ruling that bans on recreational possession or use of cannabis is unconstitutional.
Senator Ricardo Monreal, who leads the Morena party in the Senate, expects the bill to pass quickly and make its way to Congress, putting an end to “prohibitionist policies” in Mexico.
Cannabis Legalization in New Zealand
New Zealand held a referendum on recreational cannabis alongside its federal election in October. The referendum put a simple yes or no question to the people of New Zealand: “Do you support the proposed Cannabis Legalization and Control Bill?”
Prime Minister Jacinda Ardern, who has gained considerable notoriety as a progressive paragon in contemporary politics, is widely expected to follow through on any referendum results if they turn out in favor of legalization. While the October referendum resulted in a narrow victory for the No vote, the pro-legalization party is already looking forward to future referendums that “will not be defined by age.”
Given that Jacinda Ardern’s government has just secured another term — and that cannabis is New Zealand’s most commonly used illicit drug — pundits and advocates alike broadly consider recreational cannabis legalization a fait accompli in the near future.
Cannabis Legalization in Luxembourg
The Grand Duchy of Luxembourg is an odd case in the international cannabis legalization effort for the simple reason that it’s little more than a stone’s throw from Amsterdam, the internationally-recognized cannabis capital of the world. Despite being an unlikely holdout in the legalization movement, Luxembourg is set to be the first EU nation to make cannabis completely legal.
Following a unanimous vote by lawmakers in favor of medical cannabis last year, the Luxembourgish government unveiled a two-year recreational cannabis legalization plan in July, championed by Health Minister Etienne Schneider and Justice Minister Félix Braz.
While the plan would legalize cannabis in its entirety (i.e. possession, consumption and production), it would ban cannabis from non-residents. According to Health Minister Schneider, this would be a measure taken to prevent cannabis tourism and establish that Luxembourg “is not the new Amsterdam.” The proposed legislation currently enjoys support from all three parties that comprise Luxembourg’s ruling political coalition.