Major Progress for CBD Cosmetics in the EU
This week, the European Commission’s Directorate-General for Internal Market, Industry, and Entrepreneurship and SMEs added cannabidiol derived from hemp as an approved ingredient for inclusion in cosmetic and personal care products. Over the past year, the European Industrial Hemp Association has aggressively lobbied member nations to lift bans on hemp-derived ingredients, and we are finally seeing some traction. While the long-term ramifications of this development remain unclear, what is clear is that we can expect a major injection of investment dollars into the EU market for new cosmetic products containing hemp-derived CBD. Moreover, close attention should be paid to U.S.-based cosmetic companies to see if they take the long-awaited plunge into EU markets with new CBD products that continue to dwell in research and development limbo.
Canadian Cannabis Stocks Respond to U.S. Political Optimism
This week, U.S. Senators Cory Booker (D-NJ), Chuck Schumer (D-NY), and Ron Wyden (D-OR) published a joint statement indicating their intention to pursue a comprehensive, reformative legislative initiative aimed at overhauling the federal regulatory enforcement of the adult-use cannabis market.
The language in the statement made clear that this initiative stems from a long-held democratic belief that the “War on Drugs” no longer serves the best interest of the American people. It states, in part, “[the] War on Drugs has been a war on people—particularly people of color. Ending the federal marijuana prohibition is necessary to right the wrongs of this failed war and end decades of harm inflicted on communities of color across the country. But that alone is not enough…As states continue to legalize marijuana, we must also enact measures that will lift up people who were unfairly targeted in the War on Drugs.”
How aggressively the Biden administration will pursue the federal decriminalization of cannabis has been a subject of great debate since the November election. Vice President Kamala Harris has long been a proponent of decriminalization, and with the backing of these prominent senators, we may see movement quicker than we thought. The above excerpt aligns perfectly with the public statements made by the VP regarding decriminalization. The writing is on the wall, a change is coming.
While a joint statement from three senators certainly does not equate to immediate change, foreign cannabis companies are already reaping the benefits of the perceived optimism of forthcoming change. Within 48 hours of the joint statement being released, major Canadian companies such as Tilray (up 16%), Aphria (up 14%), Aurora (up 8%), and Organigram Holdings (up 16%) saw their stock prices increase as a result.
Federal legalization of cannabis is not a matter of how or if, it is a matter of when. And once the U.S. market is officially open for business, we can expect an immediate surge of foreign cannabis companies looking to cash in. How that will look from a foreign trade perspective is yet to be seen but, one thing is for sure, the floodgates are about to open.