How U.S. Cannabis Companies Can Expand Into Europe
by Josh Kasoff
With the industry now expanding beyond state lines and into the territory of independent nations, American operators are naturally eager to understand how they can participate. However, as with any frontier expansion, these international opportunities will come with their fair share of regulatory roadblocks and typical growing pains.
Summary
While U.S. rescheduling dominates the headlines, the real commercial opportunity lies in Europe’s high-standard medical markets. This guide explores how American operators can overcome the “EU GMP barrier” by leveraging two strategic models:
- The Partnership Model: Utilizing established hubs like Portugal for rapid market entry.
- The Vertical Model: Building compliant facilities in low-cost, high-yield regions like Colombia and Thailand.
Europe’s Cannabis Market Comes With Heavier Regulation
Many of these markets still lack sufficient domestic cultivation and manufacturing capacity, driving a high demand for imported products. While the U.S. regulatory framework currently restricts the export of finished goods, a significant opportunity exists for American equipment and service companies. These firms, backed by extensive experience in cultivation and processing, are uniquely positioned to enter this rapidly expanding landscape.
However, any American operator eyeing a European expansion must navigate a substantial layer of additional regulation. Specifically, for medical cannabis to be sold in the EU, the flower must be cultivated under Good Agricultural and Collection Practices (GACP) and processed in an EU Good Manufacturing Practice (EU GMP) certified facility. This certification is already mandatory for any European pharmaceutical company, as it sets the “minimum standards to operate legally” within the medicinal framework.
While it may take time for the rest of the EU to mirror the “cannabis-friendly” stance of Germany or the Czech Republic, the mere existence of these medical markets is a significant shift. Interestingly, the movement spans the entire geographic and economic scale of the union: Germany, the EU’s largest nation, and Malta, its smallest, have both legalized cannabis. They are joined by Luxembourg, which moved toward legalization slightly before Germany. Meanwhile, 13 other countries—stretching from Norway to Romania—have established medical programs, though they vary significantly in their strictness and permitted product types.
Strategic Pathways for Entering Europe’s Cannabis Market
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| Expansion Model | Upfront Cost | Speed to Market | Margin Control | Operational Complexity |
|---|---|---|---|---|
| EU GMP Partnering | Low–Medium | Fast | Low | Medium |
| In-Country EU GMP Build | High | Slow | High | High |
Given Ziel’s international experience and the existing regulation surrounding the production of pharmaceutical/medical products in all EU-affiliated countries, de Cordova recommends a few different strategies for expansion into the European countries while still abiding by the strict regulations that come with EU GMP and other required licenses.
Even with the several variances in how each individual EU country will be treating cannabis and the rigorousness of the required certifications, there are still a few different options for cannabis businesses interested in European expansions that each provide their own equal amount of benefits and drawbacks as well.
Partnering With EU GMP Facilities to Accelerate Market Entry
Cordova advised that the fastest path would be that instead of building an exorbitantly expensive EU GMP-certified facility in one of the EU-affiliated nations. GACP growers can save a considerable amount of capital and partner with European facilities that already have gone through all the extensive and costly processes required to obtain their EU GMP validation. Interestingly, the countries mentioned go beyond only The Netherlands and into several other countries not stereotypically known for cannabis culture that have passed nationwide reforms of their own.
Building EU GMP Processing in Colombia or Thailand
There’s two countries in particular that de Cordova frequently mentions as perfect natural climates for cannabis production, yet both of them are far outside of Europe and many of the EU’s policies, yet still operate under the stringent guidelines that come with GACP certification.
With year-round harvest cycles, large-scale greenhouse facilities that rival many award-winning American cultivators and soils that are naturally rich in everything vital for quality cannabis consumption, Colombia and Thailand have become ideal spots for large-scale cannabis cultivation. De Cordova brought up the financial statistic that adding even just two extra harvest cycles can result in additional revenue of over 1 million Euros.
Over the past decade, supportive regulations and foreign investment have helped the country emerge as a key source of medical cannabis for global markets. A key driver has been the widespread adoption of GACP, which is effectively table stakes for Europe; for companies targeting European buyers, GACP compliance is not optional; it is a requirement.
Key Takeaways for U.S. Cannabis Operators Entering Europe
De Cordova advises that the two most crucial regulatory frameworks are GACP for cultivation and EU-GMP for post-harvest manufacturing, two very important certifications that mostly aren’t required for American cannabis companies. Also, on top of the arduous process of receiving those certifications, any aspiring American cannabis companies will simultaneously need to be cognizant of whatever the national laws and regulations are for wherever they’re operating and the vast ways in which the operation and production rules and costs can change between the nations. And even though the American companies would technically be the newcomers into the European industries, de Cordova stressed the miles, and not kilometers, of experience that American cannabis companies can provide for their European contemporaries.