When it comes to the emerging legal cannabis industry, the United States and European markets clearly stand out. Both regions are experiencing significant policy and regulatory modernizations, and along with them, industry opportunities for entrepreneurs, investors and industry service providers.
Regulatory Terrain: U.S. States vs. EU Frameworks
The United States market and the European market are similar from the perspective of being a patchwork of laws and regulations. In the United States, the federal government has its own set of laws and regulations, while state-level markets have their own policies. Likewise, the European Union has various agreements and policies in place that govern cannabis activity, while national-level markets have their own laws and regulations. The patchwork approach in both regions creates a lot of confusion and headaches for governments, industry members, consumers, and patients.
Market Reach: How Many Consumers Are There?
According to Gallup polling, 15% of adults in the United States identify as being cannabis consumers. The polling does not separate medical and non-medical cannabis use, so presumably the statistic is a combination of both types of use. Roughly 267 million people in the United States are of adult age, and applying the reported Gallup polling cannabis usage rate, that works out to roughly 40 million cannabis consumers.
Conversely, the European Union Drugs Agency (EUDA) estimates that 8.7% of adults in the EU have consumed cannabis within the last year, which works out to about 25 million people. It is quite likely that the EUDA’s estimate is too conservative, and the low estimate may be indicative of many consumers refraining from reporting their cannabis use out of fear of persecution. The EUDA also does not include every European nation in its estimate. Whitney Economics estimates that the number of cannabis consumers in Europe is actually between 33.4 million and 76.7 million.
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Adult-Use Landscape: States and Nations Compared
Arguably, the biggest difference between the cannabis industry in the United States and Europe can be found when comparing adult-use cannabis commerce. Currently, 24 U.S. states have adopted adult-use legalization measures. Of those legalized states, only Virginia currently prohibits adult-use sales, although recreational sales are expected to launch in 2027.
Every state has different rules and regulations for adult-use sales where they are allowed in the U.S., and interstate adult-use commerce is still illegal nationwide. Washington, D.C., has also adopted adult-use legalization, although recreational sales remain prohibited due to ongoing adult-use federal prohibition in the United States. State-level recreational cannabis commerce is tolerated by the federal government.
Comparatively, national adult-use cannabis sales are prohibited by current European Union agreements, despite multiple countries having adopted legalization. As it stands, Malta, Luxembourg, Germany, and Czechia have all adopted national adult-use cannabis legalization, with each country permitting personal cannabis cultivation, possession, and use. Additionally, Malta and Germany permit noncommercial member-based cultivation associations to operate, which allows members to source cannabis products legally.
Local Experiments: The Netherlands and Switzerland as Research Hubs
A somewhat unique public policy concept can be found in the Netherlands and Switzerland, where authorities allow regional adult-use cannabis commerce pilot trials. The pilot trials are research-based and involve adult consumers, cannabis producers, and retailers participating in limited local adult-use cannabis commerce activity for research purposes. Whereas European Union agreements prohibit national adult-use commerce, the agreements do allow limited adult-use commerce for research purposes. Pilot trials are part of Germany’s legalization model as well, although no pilot trials have received approval from Germany’s government so far.
Medicine and Insurance: European Coverage vs. U.S. Patient-Paid Model
Differences in medical cannabis laws, regulations, and commerce in the United States and Europe are more nuanced compared to adult-use. A major difference is that medical cannabis therapies are typically covered by statutory health insurance in European markets, whereas in the United States, it is entirely up to patients to pay for medical cannabis therapies, except in rarer cases involving approved prescriptions for cannabis-derived pharmaceuticals.
Cross-Border Dynamics: Imports, Exports and Supply Chains
Another major medical cannabis difference between the United States and Europe can be found in the area of imports and exports. Many European countries allow medical cannabis products to be imported from other legal markets and sold to patients. The most noteworthy example is in Germany, where a staggering 218 tons of medical cannabis products were imported in just one calendar year. In the United States, where forty states and Washington, D.C., have adopted medical cannabis legalization in some form, registered patients rely almost entirely on medical cannabis products that were produced locally.
A Coming Shift: U.S. Rescheduling and Global Implications
With all of that being said, a tectonic shift is occurring in the United States, which will no doubt have a significant impact abroad, including in Europe. The United States is in the process of rescheduling cannabis from its current status as a Schedule I substance to a Schedule III substance. Once that happens, United States cannabis companies will get a significant boost in tax savings and financial options to help them expand, and some amount of companies will eventually enter the global medical cannabis export market. As a result, the United States and European cannabis markets will become more connected, which will no doubt drastically alter the industry landscape in both regions.
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