The cannabis business generates over $7700 million per year. Projections are rather favorable and the industry is expected to grow to $31,400 million by 2021, with an annual growth rate of 60%. Many countries, like Spain, are already prepared for what’s about to come, with the best conditions for the cultivation of cannabis and the most efficient infrastructure for the cultivation of other products such as flowers. Some companies eagerly wait for this competitive market to arrive, striving to create the best possible scenario for its success.
No doubt cannabis is on the rise. While scientific evidence does nothing but confirm its many benefits, increasingly more countries are voting in favor of its legalization as the only way to make the most of its therapeutic potential, as well as of the economic benefits this would bring in. Data shows that the cannabis sector brings in more than $7,700 a year and it's expected to amount to $31,400 by 2021. This opens up a whole new world of possibilities for those countries whose economies are undergoing some problems as a consequence of the negative impact suffered in tourism, pharmacology or agriculture. Cannabis is likely to be the solution they're looking for.
Valencia... European capital of cannabis?
Valencia (Spain) has a good example of a big U.S. multinational company that has invested in the sector using the already-existing infrastructures, greenhouses, and the ideal weather conditions of the region (300 days of sunshine per year). We're talking about Freedom Leaf, a Vegas-based company that has bought a 430,000-square-foot complex formerly used for the production of poinsettia for $4.75 million.
Given the similarities between both types of plants, the U.S. company intends to transform Europe's largest poinsettia nursery into one of the biggest hemp production greenhouses in the world. At its peak, it produced millions of poinsettia and had more than 80 workers working 24/7. Freedom Leaf will receive significant investment from Merida Capital, a venture capital firm specialized in cannabis that funds the European expansion of this company.
The choice of a poinsettia nursery is not random whatsoever. Just like with cannabis, the photoperiod of this Christmasy plant widely affects its growth. It's common for farmers to use sophisticated techniques and technologies to control this issue, particularly if seasonal ornamental plants or flowers are being grown.
They simply play with the lights in such a way that they can make the days longer or shorter trying to trick the plants into thinking it's time to flower or maybe too early to do so. To this end, very special lamps are used; lamps capable of regulating both the duration and the intensity of light. For longer periods of darkness, heat shields and shading canvas are widely used. With them, light leaks are avoided, so plants can grow at the desired pace.
This is the very same technique used by cannabis growers in Humboldt who wish to bring forward the harvest date so they can start selling their produce before the market is too saturated during October and November, the actual harvest period. It's called 'light deprivation' and it's based on the reduction of the hours of light exclusively to speed up the flowering process.
Floriculture: reinvent, innovate, or die
Agriculture is not in good shape right now, as evidenced by the sharp drop of the relative weight of the primary sector within the global GDP. This tendency has affected the entire sector but mostly the floriculture industry. The floral industry is about to see its worst nightmares come true as it faces mounting competition from emerging countries with lower production costs. Countries such as Morocco, Mexico, Kenya, Israel or Colombia are already fighting for a spot within the market forcing European companies to reduce profit margins should they want to compete. However, not all companies can really afford it.
Under this scenario, the industry must take some urgent steps to guarantee its survival. It's not too late, though. The situation can still be solved by taking advantage of the hopeful future of cannabis, which is already in the spotlight of many companies willing to gain a good position on the market.
This is exactly what's happened in the States, where cannabis investors have so far been warmly welcomed. They've been offered existing flower nurseries (abandoned or in use) so they can start growing hemp. The legalization of pot in some U.S. states and in Canada, the existence of a huge market yet to be exploited, and the cannabis-friendly policies adopted by some administrations have provided an appropriate framework for this to happen. And everything seems to be going well.
Colorado, Massachusetts, and Oregon, for example, have already experienced a real estate boom thanks to the marijuana industry. This is because ready-to-use flower nurseries are preferred by cannabis growers for they do not have to invest so much money. Plus closed down flower nurseries are given a second chance.
Some states, like California, have even received a little push from the institutions. Monterey County, for instance, allows commercial outdoor marijuana cultivation only in existing farmland. This has inevitably raised the value of the available land. While the average price of a 10-acre parcel of land was $2.5 million in 2015, in 2017 it could cost some $5 million.
Spain: opacity and secrecy
Despite the scarce availability of information and the non-existent transparency, Spain is already building a whole legal cannabis industry of its own. This opaque market is controlled by 5 major companies, all of which have been authorized by the Ministry of Health to grow cannabis for therapeutic and for research purposes. They are currently using roughly 50,000 acres of land.
Not everyone gets to work in this field, though. Procedures are long and complicated, and the conditions are countless. Many requests are turned down because they aren't 100% in line with the regulations in force. As a matter of fact, the Spanish Agency for Medicines and Health Products (AEMPS) claims that licenses are usually denied because the object of the cultivation is not stipulated by the law, because the manufacturer assigned is not allowed to carry out post-harvest treatments or because either the seeds or the plants haven't been proved legal.
Using the popularity of cannabis to improve the floriculture activity and the farming sector in general, not to mention the clear benefits this would bring to the economy, requires the implementation of brave measures that steer clear of misconceptions and are supported by scientific evidence. This would undoubtedly benefit all parties involved: consumers, companies, and citizens.