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How Will the War in Ukraine Affect the European Cannabis Industry?

When Russian tanks rolled into the Ukraine last Thursday, perhaps the last thing on anyone’s mind was how the largest ground war in Europe since WWII would affect the nascent cannabis industry.

But, reality has set in. It is evident that many people in Europe’s cannabis sector are concerned about the potential halt to reform efforts.

What changes will take place and what will not?

Europe: Production and Supply Chain Questions

Unaffected by the changes will be the supply chain of cannabis. Germany currently sources some cannabis for its medical market from domestic suppliers. The country is also receiving cannabis from other countries, which are far less affected by the hostilities. These include Australia, Lesotho and Uganda as well as Denmark, Spain, Holland. 

Nonetheless, higher fuel costs will likely impact the industry. The two most severely affected countries by the rising prices of gas resulting directly from the conflict are Holland and Germany. UK suffers as well. All medical marijuana prescribed or consumed in the UK must be certified by EU-GMP. This makes it an energy and water hoarder.

Alain Menghé à Menghé, the CEO of Lio Pharmaceuticals, a German distributor who is building a manufacturing hub based in Solingen, just outside Dusseldorf, is a bit more pessimistic. Even if the hostilities do not affect directly, he expects that the whole industry will be affected by the outbreak. “Unfortunately, the situation is already causing higher energy prices which will impact anyone in the industry who needs to transport, store, or manufacture the plant or drugs made from it,” he said.

Price issues are one of the greatest problems in the medical market now — namely in the insurers willingness to approve cannabis-related medicine.

The Effect on the Ukrainian Cannabis Industry

This country has a rich history of cannabis cultivation. The Soviet Union was the biggest country to cultivate industrial hemp. A higher level of THC was routinely grown. This created a huge user base.

Recently, legalization has gained popularity. A Cannabis March of Freedom, which took place in October 2017, kicked off the new movement to legalize marijuana for both recreational and medical use.

Local advocates claim that the Russian invasion will essentially devastate the local marijuana industry. There have been some successes thanks to years of lobbying by local advocates, such as the Ukrainian Association of Medical Cannabis. It was possible to get prescriptions for medical marijuana before Thursday. However, it was difficult to obtain both legal and prescribed cannabis. 

Nevertheless, it does not necessarily mean that there is no need for reform. Local experts did not expect any change in the next five year. There have also been repeated efforts to introduce cannabis reform into the political debate — all of which have failed.

Ukrainian Association of Cannabis made a request to the Parliament for legalization of cannabis use in 2019. According to a 2020 national survey, 65 percent supported legalization of cannabis. In 2021, the country was selling drugs that contained nabilone or nabiximol and dronabinol. Although cannabis had been technically declared illegal until Thursday last week, people could still grow up to 10 plants for their own personal use.

It is possible, given the present conditions, that the illegal market could get a significant boost. This would include wartime interruptions of all things, an unavailability for medicines, and an inevitable black market.

Politics and personal issues

The political consequences of war on Ukraine beyond its borders will be one of the most significant. Germany is a good example of this, with politicians mentioning that COVID could reshape the recreational conversation. Wars are another distraction. Also, this is true for DeutschlandIt is the same in all EU countries and the UK at this moment.

According to Menghé à Menghé, “The deprioritization of other issues (than the war) could slow the dynamic of regulatory change.”

Beyond this, there are other considerations that people on the cannatech side of the equation are also feeling – namely the direct impact of the war. Ziya Gaziyev is the CEO and founder of HelloMary in Berlin, which offers an AI-centered platform and marketplace. He also has a part of his programming staff on the ground for the Ukraine. “We are very concerned for our friends and colleagues,” he said. “Obviously this affects us on a personal level, directly. However, it will not affect our programming efforts or deadlines as our core team are spread out across several countries.”

Legalization shouldn’t slow down

It is crucial that the cannabis industry takes control of its own fate right now. This vertical has been globally recognized for being a great employer, good for the economy, and producing high-quality drugs. However, not everyone is supportive of complete reform. 

Given its “flower power” past, no matter how corporate it has also become, this is also generally an industry made up of people who are pro-peace and diplomacy.

Patients will have more difficulty obtaining cannabis if they delay change due to supposedly pressing and important issues. The war is only going to make the problem worse.