Is The Ukrainian War Causing Weed Prices To Skyrocket Across Europe?

This article was originally published on Cannabis.net and appears here with permission.

Amid this ongoing fracas between Ukraine and Russia, it is high time one considers its impact on the European weed industry.

The progress made by European nations concerning cannabis legalization could be overturned or delayed in the next few months. Less than a month ago, one could hardly hear worlds like sanctions, bombs, missiles, war crimes, etc., within the European space. Since last Thursday—when Russia officially declared war on Ukraine—it's all anyone hears on media platforms.

This article is not in any way undermining the severity of what's happening in Ukraine at the moment. It only seeks to explain how these hostilities between most European countries and Russia would affect cannabis reforms and the legal industry across the continent.

Impact of The War On Europe's Cannabis Space

The reality setting in on cannabis operators in Europe is that reforms and vital policies that would have aided the growth of the space post-COVID will take a backseat to the current security issues.

Although Ukraine is not the leading center for cannabis advocacy in Europe, its security issues could backfire on other countries in the region. A quick search on google will reveal that Germany is less than a day's drive from Ukraine, while Poland and Hungary share borders. Many operators are worried that the production and supply chain of the region's cannabis industry will be impacted

Europe Cannabis Supply Chain

Regulators have quelled the fears of cannabis operators by clarifying that the cannabis supply chain will not be affected.

Ukraine does not supply any of the cannabis used in the medical market. The production sites include Germany, Columbia, Uruguay, Australia, Denmark, Portugal, Holland, Greece, Lesotho, Uganda, and Spain. The European cannabis industry is supplied by countries all over the world.

Europe's representative on Life Sciences, Franziska Katterbach, believes that the war cannot cause a break in the region's production and supply chain.

The main challenge right now is the rising gas prices. Every industry requires energy to run, including the cannabis sector. The industry cannot avoid the increasing energy costs affecting the region. Germany, the United Kingdom, and Holland are bearing the highest impact of this increment. Domestic producers of medical cannabis in the area must grow cannabis indoors. Note that the regular running costs of indoor cannabis production are higher than outdoor production. As a result, the rising gas prices will put more constraints on farmers and processing companies.

Price Increase Concerns

The rising price issues will pose the greatest hindrance to the medical cannabis industry in the coming weeks.

CEO of Lio Pharmaceuticals and German distributor Alain Menghé à Menghé does not believe these recent hostilities won't impact the entire industry. Menghé is currently building a manufacturing plant in Solingen, Dusseldorf.

He said his pessimistic view of the war and its impact on the industry stem from the higher energy prices. Although it may not be obvious, rising energy costs will impact all sectors of the industry in some way. Transportation, storage, and production of the drugs themselves will be most affected.

Ukraine and Cannabis

The ongoing situation in Ukraine has been described as the largest ground war within Europe since the Second World War ended. Many industries are being affected, including the budding cannabis industry.

Before all this started, Ukraine had just set foot on the path to legalizing cannabis. At least significant milestones had been crossed off to show the citizens' readiness for the legal cannabis industry.

A petition was submitted to the country's Parliament to consider the use of medical cannabis. The 2019 petition explained that the drugs would benefit cancer patients. It emphasized the chronic pain and the expensive cost of managing cancer symptoms. However, the Parliament failed to adopt a measure relating to this.

The results of a 2020 poll showed that 65 percent of the Ukrainian population supports the use of medical cannabis.

Last year, the legislature amended a provision to allow the use of drugs like nabilone, nabiximol, and dronabinol. Although, many advocates claim that these changes had minimal effect on making the drugs more accessible to people in desperate need.

If this current chaos had been avoided, Ukraine would have progressed with cannabis legislation. During the election campaign, President Volodymyr Zelensky (then an aspirant) supported cannabis legalization. Whether or not he would have acted on it during his tenure may never be known. Because it is almost sure that once the war is over, cannabis will be the last thing on the government's priority list.

Political Fallouts Everywhere In Europe

The inescapable aftermath of ground wars, especially in Europe, is political and personal fallouts. For instance, in Germany, politicians who promised to look into recreational cannabis legislation may use the Ukraine unrest as another distraction to push the conversation back. The same is the case in the United Kingdom, Deutschland, and every other member of the European Union.

Menghé à Menghé said that the war would be the EU's priority, while every other issue would be delayed. He expects that the dynamic of regulatory changes for cannabis use will be halted and delayed, most likely until Ukraine is settled.

Cannatech companies are also affected by this war. HelloMary, an AI-centered e-commerce platform for cannabis products, was one of the few Cannatech firms to feel the direct impact of the war. The company's CEO, Ziya Gaziyev, said the hat members of the firm's programming team are scattered across Europe. He added that the company is highly afraid for their friends and colleagues based in Ukraine. However, he promised that the available core team members would maximize their potential to meet all deadlines.

Bottom Line

This is a critical period in Europe. The cannabis industry has to stand up for itself to prevent relegations. If the cannabis sector can take charge of its own destiny and prove that it is a substantial employer of labor and a massive boost to the economy, lawmakers may have no other choice than to proceed with legalization.

This period should preach peace and diplomacy to the nations at war instead of escalating issues. Governments need to consider the medical patients in pain due to the drug's inaccessibility.