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  1. CBD sales in Europe forecast to surge to US$1.7-billion in 2023
  2. Germany to become Europe’s biggest CBD market in four years
  3. CBD has “exploded” as tobacco substitute in Europe, Brightfield says

Annual CBD sales in Europe will balloon by more than five times to reach nearly US$1.7-billion in 2023, with Germany taking the lead as the region’s biggest market while an influx of investments from Canadian licensed producers and other international players are expected to capitalize on the boom as regulations shift, Brightfield Group said in a report on Tuesday.

“With a warming regulatory landscape, increased production capacity and the growing awareness overflowing from the United States, the European CBD market offers strong opportunities for investment and growth for the medium to longer term,” said Brightfield, a U.S.-based market intelligence firm that focuses on legal cannabis industries.

“Although Europe’s legal CBD market remains relatively small – set to reach US$416-million in 2019 – it is poised to grow more quickly with both the likely blessing of global bodies such as the UN, and the European Union’s Novel Foods Act (health and safety regulations) eventually permitting for CBD to be sold like other ingestible products on the mainstream market.”

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Europe’s cannabis market will grow to US$8-billion by 2023 versus US$316-million in 2018, with Germany on track to become the region’s biggest medical marijuana customer at US$2.7-billion by 2023 versus US$73-million last year, Brightfield said.

Cannabis and its derivatives fall under Europe’s Novel Foods regulations, which countries there use as a reference for products that are only permitted for external use. The European Food Safety Agency is scheduled to decide this month on how these regulations apply to CBD, with expectations for it to authorize the use of CBD in adult food supplements. CBD availability in Europe has risen quickly in a relatively unchecked market and sales are expected to take a hit this year due to regulations, “but this will be a shock that the industry will bounce back from,” the report said.

“In the likely case that CBD is de-scheduled, and that Novel Foods permits for the legal and safe production and sales of CBD products, those participating or interested in the industry will have a much more straightforward pathway to commercialization after 2020,” Brightfield said.

Unlike in North America, CBD has “exploded” as a tobacco substitute in Europe, where it is sold in vape cartridges, cigarettes and as dried flower, making smoke shops and supermarkets key distribution channels as the non-intoxicating cannabinoid tends to be regulated like tobacco. This “massive growth sector” made up the two largest product categories in 2018 that are expected to extend their lead this year as Europe’s Novel Food regulations are expected to tighten around CBD ingestibles, Brightfield said.

For now, many EU countries have put a hold on CBD product sales outside of tobacco substitutes and pharmaceuticals pending further clarification from the European Commission, but this market disruption is expected to be brief with ingestible CBD products likely reaching formal EU markets by late 2019. European sales of CBD cartridges and tinctures are each pegged at US$103-million in 2019, with flower around US$71-million, the firm said.

While tinctures, topicals and capsules will contract in 2019, Brightfield expects they will grow to make up 63 per cent of Europe’s CBD market by 2023 after Novel Foods regulations are expected to make these products legal.

Germany’s CBD market was forecast at US$604.9-million in 2023 versus US$37.8-million in 2018, when cartridges made up this category’s biggest product type at US$13.2-million.

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“Medical cannabis can be billed to insurance in the country, thus expanding access to many on tight budgets, especially those with chronic conditions and a need for larger dosages and/or quantities of product - meaning increased demand across the country,” the report said, about a driving force in Germany.

The greatest growth rates, however, will be seen in the United Kingdom and France.

In the U.K., where regulations are seen loosening to allow a broader range of qualifying medical conditions, CBD sales are forecast to surge to US$440.8-million in 2023 from US$76-million in 2018, when tinctures accounted for the biggest product type at $24-million. This compares with its cannabis market size that is projected to reach US$277.2-million in 2023 versus US$3.1-million in 2018.

In France, the expected roll-out of its formal medical program means its CBD market will reach an estimated US$192-million in 2023 versus US$38.2-million in 2018, though sales have been halted since late last year after the government prohibited all cannabis transactions while the country reviews all products with the expectation to recommend a legal pathway for commercialization in late-2019.

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