Press selection_February 11th

Repubblica, Affari & Finanza 11/02/2019
Cannabis, “green gold” rush (attached)
USA first market, Canada first producer: at Wall Street Canopy Crop already capitalizes more than Bombardier. Behind the startups there are the tycoons of Silicon Valley and now grows the interest of Coca Cola, Altria and Heineken. What’s happening in Europe. The Colorado Cannabis Tour is a service launched in 2014 that every year brings around five thousand tourists passionate about marijuana around the state. Micheal Eymer, who in 2016 had a turnover of more than a million dollars with his company, has realized before others the potential of a sector where the large multinationals of tobacco, alcohol and pharmaceuticals are now putting their eyes: the global trade of legal marijuana. The figures in the latest report by Arcview Market Research and Bds Analytics explain why: in 2018 global spending on legal cannabis exceeded $12 billion, in 2017 it was $9.5 billion and in 2022 it could reach $31 billion. As in the 1930s. Some people see in this acceleration something similar to the end of prohibitionism in the second half of the 1930s with the subsequent birth of the global alcohol industry in a couple of decades. In the United States, which is the world’s largest consumer, medical cannabis is legal in 33 states and can also be used for recreational purposes in ten states. In Colorado, which was the first state to allow recreational use in 2014, the turnover exceeded one and a half billion dollars in 2017, it employs 50 thousand people and the state collects more than 200 million taxes per year. Marijuana Valley in Canada. Cannabis is attracting the attention of multinationals and investment funds in Canada. When Bruce Linton founded the Canopy Corporation in 2013 in Ontario, friends and family told him to let it go because it is a sector too exposed to public policy uncertainty, but he didn’t give up. Today Canopy Crop is one of the world’s largest cannabis producers, the first to list in New York and has a market capitalization of over $10 billion. Constallation Brand, which produces Corona beer, has invested 3.8 billion in Canopy, in response to steps taken by other companies in the beverage industry such as Coca Cola, Heineken and Anheuser-Busch. The Magic Four. Tilroy is another big name of the Canadian cannabis together with Canopy, Aurora and Cronos. Europe is a land of conquest. Europe is a very promising market for medal cannabis producers. By 2028 it could reach 58 billion euros according to estimates by Prohibition Partners. Italy, Germany and the Netherlands are the largest potential markets with a forecast of over 220,000 patients in 2019. The risk for Europe is to carve out an importing role in a market dominated by a few large multinationals.

Repubblica, Affari & Finanza 11/02/2019
Liberalisation, keep an eye on hidden costs (attached)
From a commercial point of view, the liberalization of cannabis is a “no brainer”: a substance that creates addiction and that, if consumed moderately, does not generate dangerous physical consequences in the immediate future, is the ideal product for a commercial department of any company. From the public point of view of those who should care about collective health, the issue is more complex. The use of drugs for recreational purposes raises questions about the relationship between individual freedom and constraints imposed in the collective interest. Very often, the economic shortcut of measuring the immediate benefits for the state coffers is taken: higher revenues in terms of VAT and excise duties on consumption and lower costs for actions to combat illegality. The long-term impact is very difficult to assess, but it is potentially enormous if we consider the costs incurred by the national health system for diseases related to tobacco consumption. In the case of cannabis, in addition to smoking-related damage, other consequences should be added: long-term neurological damage, the social cost of reducing the cognitive capacity of those who abuse it in adolescence and accidents caused by dizziness or paranoid behaviour produced on predisposed people. The legislator should not reduce its analysis to the possible higher state revenues from liberalization, but should consider the costs for future generations, trying not to repeat the same mistake made in the liberalization of the gambling about twenty years ago.

Repubblica, Affari & Finanza 11/02/2019
The “made in Italy” hemp occupies four thousand hectares of land. Shops and startups grow (attached)
Farmers have jumped into this adventure. In the last five years, the Italian area used to grow the sixty-four species of cannabis allowed by the EU has increased from three hundred to four thousand hectares. Moreover, the supply chain is growing at a glance, as demonstrated by the last edition of the “CanapaExpo” exhibition in Milan last October, where exhibitors have doubled compared to the previous year. The market, therefore, is promising; however, the uncertainty of the Italian regulatory framework risks holding it back, especially with two government forces that have conflicting views on this subject. Industrial uses. The production of hemp for industrial purposes travels at full speed: products derived from cannabis are used in a wide variety of sectors, from cosmetics to construction, from bio-plastics to food. The area where clarity has not yet been achieved is the so-called “light” cannabis for recreational purposes. Hemp inflorescences can only be sold for floricultural purposes or as a collector’s item and they cannot be smoked. According to Luca Marola, founder of Easyjoint, the parliamentary hearings – which are taking place within the Committees on Agricolture and Social Affairs of the Chamber of Deputies – will lead to certain rules regarding cannabis. Foreign companies’ interest. Italian companies are beginning to attract foreign interest. Canadian LGC Capital is about to acquire 49% of Easyjoint for 4.7 million. “When we decided to open our capital, we had offers from seven potential foreign buyers from Canada, the United States, but also an Israeli company and two companies in Southeast Asia – says Luca Marola. “What’s going to happen now? Once framed within precise rules, the cannabis market in Italy will explode. The direction of the cannabis sector could be entrusted to the State Monopolies. I don’t exclude that Big Tobacco will also enter the sector in the future”- says Riccardo Ricci, founder of Cbweed. The possibility of generating revenue from cannabis is beginning to tempt some Italian politicians.