Europe’s cannabis pharmaceutical market is far from a gold rush, yet it is emerging as one of the more strategic long-term plays available today.
Unlike traditional drug development, which often starts with costly preclinical trials and faces high failure rates, cannabinoid medicines benefit from a rare advantage: millions of patients worldwide already use cannabinoids. This growing body of real-world evidence is helping companies to mitigate early-stage risks and design more efficient clinical trials.
Go deeper with GlobalData
GW Pharmaceuticals, acquired by Jazz Pharma for $7.2 billion, is widely cited as a blueprint for end-to-end cannabinoid drug development. The British firm’s success with Epidiolex, a CBD-based epilepsy treatment, demonstrated the feasibility of progressing from cultivation through to regulatory approval.
In 2024, it raked in about $972.4 million in sales, and GlobalData analysis shows therapy sales may continue their upward trajectory and pull in over $1.3bn by 2030.
Today, new entrants can access many of the foundational assets – active pharmaceutical ingredients, regulatory dossiers, manufacturing partnerships that GW painstakingly built, significantly lowering barriers to entry.
Emerging players such as MMJ International Holdings and Zynerba Pharmaceuticals are also carving out a niche in cannabinoid-based therapies, targeting neurological disorders.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataYet despite clear clinical opportunities across central nervous system (CNS) disorders, chronic pain, multiple sclerosis and cancer, capital remains a sticking point. Public markets remain cautious, and institutional investors largely absent.
Instead, growth is being fuelled by family offices and strategic high-net-worth individuals drawn to de-risked licensing models, where companies out-license cannabinoid drugs to big pharma after Phase II or III trials.
Some industry experts suggest the future lies in dual-track models that combine rigorous clinical research with the agility afforded by real-world data. A notable shift is underway: as US companies with consumer marketing expertise enter drug development, the blending of consumer branding with pharmaceutical discipline could create enduring competitive advantages.
“We don’t have to start from scratch anymore,” said Melissa Sturgess, CEO of Ananda Pharma, during a panel discussion at Cannabis Europa 2025. “The science is known. The data is building. Now it’s about execution.”
Lessons from the US: slow growth as a strategic advantage
North American investors watching Europe’s cannabis sector are bringing with them lessons learned through a market boom-and-bust cycle. Their cautious optimism signals that this next phase will be defined less by hype and more by discipline.
“Europe is five to six years behind the US, and that’s actually a good thing,” said Anthony Coniglio, CEO and President of New Lake, a cannabis net lease real estate investment trust. “It means there’s still a chance to do things right.”
The US market’s rapid growth in the late 2010s, driven by celebrity-backed brands and aggressive retail expansion, also left a trail of bankruptcies and disappointed investors. Europe’s more measured pace – built on pharmaceutical-grade standards, medical infrastructure and tighter regulation offers a foundation for long-term stability, though it may try the patience of entrepreneurs.
Nonetheless, significant challenges remain. Experts highlighted three key reasons for investor caution: regulatory instability, with shifting rules that complicate long-term planning; ongoing uncertainty around pricing, patient access and supply-demand dynamics; and competition from more established sectors offering superior risk-adjusted returns, especially in today’s high-interest rate environment.
“Cannabis doesn’t operate in a vacuum,” said Tristan Gervais, managing director of investment firm T Capital. “We’re not just comparing cannabis companies to each other. We’re comparing them to every other investment in the portfolio.”
The tone of the discussion underscored a market correction: the era of raising capital on a pitch deck and a promise is over. Investors now demand evidence of financial discipline.
“Cash flow is everything,” stressed John Pinto, Soje Capital. “You have to demonstrate that you can either reach profitability or survive long enough to get there.”
This shift reflects a broader recalibration. Cannabis start-ups that once relied on successive funding rounds to fuel rapid growth must now show how they will operate lean, build resilient infrastructure and reduce reliance on external capital.
It is no longer about brands or packaging – nor cannabis in the traditional sense. Investors are increasingly drawn to asset-light models focused on technology, logistics, and services rather than cultivation or retail, as well as non-plant-touching infrastructure such as real estate, supply chains, and pharmaceutical compliance.
Experts also singled out hemp-derived, low-dose consumer products as an area of interest, particularly those that navigate restrictive THC laws while appealing to wellness-focused consumers.
Crucially, companies must present themselves as well-run businesses operating in the cannabis sector, not simply “cannabis companies.”
The investor view
For those seeking investment, investors offered a clear checklist:
- Clarity of purpose: What core problem are you solving, and why now?
- Operational discipline: Can you demonstrate governance, financial controls, and professional leadership?
- Scalable model: Is there a path to profitability without overreliance on volatile capital markets?
- Regulatory compliance: Are you GMP-certified, pharmaceutical-grade, and built for longevity?
- Capital strategy: Do you have access to future funding, or better yet, can you sustain without it?
“Without answers to these questions, you’re not investable right now,” warned William Muecke, Chief Investment Officer of Artemis Growth Partners.
Despite the hurdles, the consensus was clear: for those with the right approach, this remains one of the most promising moments in cannabis history.
“If you’re raising money, it’s tough out there,” Muecke concluded. “But if you have money, this might be the best time to deploy it. The winners in Europe will be those who build methodically, understand regulation, and treat capital as a precious resource – not a lifeline.”
