Is Cannabis Legislation a Promising Sign for Pharmaceutical Cannabinoids?

Whilst Amsterdam has long been considered the global home of cannabis use, Western countries are slowly changing their stance on its use. In 2012, U.S. states Colorado and Washington both legalized recreational cannabis, with many other states since following. Other countries have legalized cannabis too - including Canada, Mexico and South Africa - and although still illegal in many other countries, it is often decriminalized or not enforced as a crime.

Germany is the latest country to change its legislation and legalize cannabis, and has voted to legalize both the personal possession and cultivation of cannabis. The new laws will even allow for non-commercial members clubs to grow and distribute the drug, but stopped short of proposed plans to allow licensed shops and pharmacies to sell it legally.

So, do these changes offer an opportunity for big pharma and challenger companies to capitalize?

Crunchbase data shows that venture capital finance has invested $5.3 billion into 544 cannabis-related startups since 2014. In 2021, Pfizer completed a $6.7 billion buyout of Arena Pharmaceuticals who operated on clinical-stage cannabinoid-type therapeutics, whilst Jazz Pharmaceuticals spent $7.2 billion to purchase GW Pharmaceuticals who successfully developed FDA-approved plant-derived cannabinoid medications.

With that being said, there is great potential for pharmaceutical companies looking to integrate cannabinoids into their product lines. The development of patented, innovative therapies offering alternatives to traditional medications could prove effective against conditions like chronic pain, epilepsy, and anxiety.

Big Pharma's extensive experience in regulatory navigation, clinical research, and global market access positions it well to capitalize on the expanding medicinal cannabis market, focusing on high-quality, consistent products and overcoming current market challenges related to variability and quality control.

With reports estimating a potential cannabinoid market value worth $63 billion by 2030, there is likely to be growing interest in the cannabis market, and a flurry of acquisitions as companies look to jump start their growth.