The Industry's Next Big Hurdle
What you need to know about the global cannabis trade.
The cannabis industry is finding footing in new countries internationally as more governments legalize the medical and adult recreational use of cannabis. But as the burgeoning industry becomes increasingly globalized, many questions surface, including what barriers and limitations exist.
Professionals across the industry recognize the U.N. participating nation-states, prospective markets, and regulatory agencies all play a tremendous role in shaping the future international cannabis industry.
International trade hopefuls must consider practical concerns such as cannabis exportation or importation limitations and also have the prescience to navigate a yet-to-be-established imminent global industry.
Here is a primer on international cannabis trade limitations to inform your foray into the budding intercontinental marketplace.
Which countries have legalized cannabis?
As of 2021, only five nations have legalized cannabis for adult use, and some territories and states in the U.S. and Australia. Numerous others have legalized cannabis for medical use, including Colombia, Germany, Portugal, Lebanon, and Malawi. The distribution of cannabis is the source of multiple barriers and trade limitations because of constantly fluctuating legal ambiguity, even for countries warming to the idea of cannabis.
Which countries can and do legally export cannabis?
Often, trade limitations arise for a complex set of factors depending on which countries participate in the global market and how one country’s framework interacts with another’s. Although multiple countries have legal frameworks for medical or adult use, countries must also have the structure to export cannabis. Colombia, Denmark, Canada, and the United Kingdom are notable for exporting medical cannabis. Just because a country has legalized cannabis does not necessarily mean it can export it. Furthermore, those exporting cannabis are doing so for explicit medical use. Companies awaiting recreational exports have yet to be given the green light.
Exporting hemp flower vs cannabis flower
Another consideration is the type of cannabis one hopes to export. Barriers to cannabis flower may not be the same for limited-THC hemp flower, even within some countries. For instance, companies cannot legally ship cannabis across state lines in the U.S. But Hemp flower can be legally shipped to most destinations.
These same obstacles will rise globally, so it’s essential to be well-versed in the various forms of cannabis and its derivative products ahead of time. The exportation of cannabinoids such as CBD is likely to also be subject to a bevy of rules, as each country establishes or enforces its own regulations. To learn more specifics, consult with a trading compliance professional or trusted attorney well-versed in your target geographical jurisdiction.
Which countries can and do legally import cannabis?
Countries that permit legally importing cannabis often have legal frameworks for medical or adult-use cannabis. As is the case with international exports, the legal consideration of importing cannabinoids to high-THC cannabis is varied. In the U.S., importing CBD is possible, but it is illegal to import high-THC cannabis to the country due to its federally illegal status. If you want to import or export cannabis-derived products to the U.S., it is best to consult with the Drug Enforcement Administration to review any regulations or rules. It is also wise to connect with legal entities such as attorneys to create a sound process to export or import cannabis.
Does the WTO get a say in the global cannabis market?
Many will turn to the World Trade Organization (WTO) for guidance when it comes to international trade. The WTO even holds illicit trade to regulatory standards, to help minimize harm to the global economy. This practice can be seen in an industry permissible in specific locales and prohibited elsewhere. Whereas member countries can put restrictions on items to prohibit them domestically, restricting international trade is much more complex and is often subject to WTO rules. The implication is that as countries onboard cannabis legally, it could become subject to WTO compliance, meaning cannabis products would have to meet a new bar of standards to be traded accordingly.
The U.N.'s role
The U.N. has played a pertinent role in cannabis’ legal status throughout the years propped up by three International Drug Control Conventions, included the highly discussed 1961 Single Convention on Narcotic Drugs, which removed cannabis as a Schedule IV substance. These core treaties have limited international trade for medical and scientific reasons. Although cannabis was recently reclassified by the U.N. for its potential as a safe therapeutic, the organization still cautions cannabis should be controlled under international drug control conventions.
Knowledge is power
International cannabis trade limitations can be intimidating. Whether you’re leading a new business or have been in the industry for quite some time, the ever-shifting nature of laws, regulations, and rules on exports and imports will continue to have a widespread impact on the cannabis industry’s future outlook.
For this reason, it’s crucial to be in the know concerning compliance. Connect with compliance professionals and comprehensive legal support to guarantee you follow appropriate trade guidelines and keep up to date with any constraints set by each country to ensure you don’t endanger your operations. The cannabis industry is buzzing with global opportunities. Back yourself with the proper technique and guidance to overcome hurdles of the trading limitations of today and revel in the prospect of tomorrow.
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