Just how big are CBD growth opportunities in Europe?

The global market for cannabidiol (CBD), valued at $9.3bn in 2020, is set to reach $23.6bn in revenue by 2025. With a predicted 22.2% compound annual growth rate from 2019 to 2025, the future looks bright for businesses tapping into the growing popularity of CBD. 

As the benefits of CBD become better known in a wider range of products and more research is carried out, it’s clear that demand for CBD is on the up in the UK … and the EU – where the CBD market is expected to rise by a massive 400% between 2020 and 2024.

Let’s dive in a bit deeper to understand where exactly CBD stands in the EU – and the opportunities out there.

Blurred CBD lines. 

First of all, it’s important to remember that the EU is not a homogenous market. The popularity of CBD varies from country to country, greatly impacted by the different legal statuses it has been given. In some countries, it is banned. In others, it is only used for medicinal purposes. Sometimes it falls in a rather grey area or can be completely unrestricted. 

Take a look at the map (2020) here – courtesy of Visual Capitalist. 

In recent years, unclear legislation and lack of regulation have led to problems with product quality and consistency, which have, to some extent, limited market growth and dented consumer safety and confidence.

Change is in the air. 

In 2019, CBD was given Novel Food status by the EU – a move swiftly followed by the UK – to create a regulatory framework for ingestible CBD. Although this is not required by law, many European countries have amended their CBD legislation to reflect the guidelines. 

In November 2020, the European Court of Justice made the monumental decision to rule that CBD is not a narcotic, meaning that it can be freely sold in the European Union. 

This ruling and new status are setting the way for a clearer regulatory path for CBD, working in favour of companies producing high-quality CBD products. As a result, more and more European countries are loosening legislation, while prioritising regulations and transparency. 

High potential.

It’s early days but the CBD marketing is already starting to flourish in countries like Germany, Austria, and Switzerland. While in others, the buds are just beginning to show exciting growth opportunities – for example, Poland known for its hemp production.

“Regulatory relaxation has been the predominant driver of investment and gained momentum in 2019, as Luxembourg became the first European country to announce its intent to legalize cannabis for recreational use. Investors believe a ‘domino effect’ could follow, as seen previously in North America and Asia,” says Marissa Schlueter, Senior Intelligence Analyst at CB Insights.

Although the CBD industry in Europe is still relatively nascent compared to the US, many believe it will soon become the No.1 CBD market. There remain, however, significant differences between countries.

“Scandinavia is far behind countries like the UK or Switzerland, partly because of its more conservative regulations,” Landgård points out.

Growing together.

According to CB Insights, in 2019, CBD startups in Europe saw a record level of investment—34 innovative companies received a total of $128.5 million.

In June 2021, Sanity Group closed a $44.2 million Series A financing round – the largest round of cannabis funding in Europe to date – bringing total investment to $73 million. Comprising wellness brand VAAY and pharmaceutical brand Vayamed, the German startup sells its products in beauty stores in Germany, online and now also in a physical shop in the heart of Berlin. With its first TV ad aired in summer 2020, VAAY is determined to create positive stories around CBD and educate people about the health benefits of CBD.

At grow by mellow, we’re really excited by success stories like VAAY. Our aim is to support quality-conscious CBD brands launching in the UK and Europe. There is so much untapped potential to bring high-quality CBD to European consumers with the right approach and products,” highlights Neil Tunbridge, CEO and founder. 

Shifting legislation, greater transparency and growing customer demand are creating the ideal conditions for ambitious quality-conscious CBD brands to expand in Europe. Now is the time to make the leap. 

If your brand’s ready to leap, don’t hesitate to get in touch and find out how grow by mellow can help take you onto new European shelves. 


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