First and foremost, we recognize that the most important conversations and articles that can be written about the war in Ukraine are about the utterly devastating toll–both in loss of life and home–on the Ukrainian people as they so valiantly fight to defend their freedoms and motherland against Russian aggressors. As such, in no way is this article intended to be insensitive to the ongoing struggle and plight of the Ukrainian people by examining the rather niche topic of how this war is affecting cannabis sales in Europe.
The harsh reality is that the ripple effects of war significantly impact to the point of crippling industries that are the livelihoods of individuals. So, by talking about the impact of war on the cannabis industry, we are not shining a spotlight on some abstract corrupt conglomerate that jacks the global prices of a particular product up just because it can. Instead, we are talking about how the loss of revenue has massive, if not devastating, economic repercussions on good people who, just like you, work hard to provide for their loved ones and themselves.
Impact on legalization Reforms in Europe and Ukraine
Before 1950, Ukraine was once one of the world’s major players in the cultivation of hemp, and in January of this year, just weeks before Russia launched its surprise invasion of Ukraine, the Verkhovna Rada of Ukraine–the country’s parliament–was poised to consider a bill proposed by its Cabinet to permit the use of medical cannabis. This would have made medical marijuana legally accessible to over two million patients in Ukraine. Due to this war, talks of legalization are, understandably, completely off the table in Ukraine as the country focuses on self-preservation. And, it is not just Ukraine, but its European neighbors who until being faced with the omnipresent threat of war spreading across the continent had placed legalizing marijuana for medical and/or recreational purposes on their dockets for consideration. However, what was once a priority for some European countries have either been moved to the bottom of the list or completely removed.
Disruption of the Supply Chain
At this exact moment, it is not believed that the European cannabis supply chain is being severely affected as Ukraine is and has not been a medical cannabis supplier. Furthermore, countries all over the world, including countries as far away as Australia and Uruguay, contribute to the supply of Europe’s cannabis industry. However, Ukraine shares four of its seven borders with EU member states–Hungary, Poland, Slovakia, and Romania–and Germany is an approximate 15 hours drive away from the Ukrainian border. As such, it is not hyperbolic for those in the cannabis industry to be voicing concerns about the production and supply chain of cannabis being or becoming severely impacted as this war carries on.
What is of immediate, growing concern is the explosive rise in gas prices, which is heavily impacting all industries and individuals around the world. When the cost of fuel goes up, the cost of energy does too, and the cannabis industry is not exempt from being highly reliant on energy. In fact, in countries like Germany, the Netherlands, and the UK, cultivators of medical cannabis are required to grow indoors, and the cost of indoor cultivation has always been higher than doing so outside. As such, cultivators and all sectors of the cannabis industry, from production, storage, and transportation to distribution, are being heavily constrained by these massive price hikes on gas. Furthermore, depending on how much longer this war continues and whether or not Russia attempts to invade other countries on the European continent, the economic toll on the cannabis industry resulting from rising energy and fuel costs will be reflected in the cost of the actual products made available to consumers.
In brief, Russia’s invasion of Ukraine initially resulted in European cannabis stocks suffering fall-off-the-cliff declines, but have begun to somewhat level out. That said, though there have been slight recoveries, the longer Russia continues its aggression against Ukraine, the more that not just European, but global, stock prices will suffer. It is currently being projected that several major players in the cannabis industry will suffer losses of $1 million or more in revenue due to the ongoing crisis in Ukraine.
How the Cannabis Industry is Showing Up for Ukraine
Cannabis businesses all over have been showing up in support of Ukraine. For example, some dispensaries and cannabis companies have been donating a percentage of their sales to non-profits like Sunflowers for Peace, matching donations to CARE Ukraine Crisis Fund, or helping direct people to donation platforms like the KSE Charitable Foundation.
It goes without saying that in times of war, the ones who pay the highest price are the civilians who are made casualties and refugees, individuals and families displaced from their homeland, and economic security. While it is the people who always matter the most, the reality is that every single agricultural and business sector is also crippled and what hobbles one then causes a severe blow to another. As this article began with: when an industry like cannabis is severely impacted by war, be it via legalization being put on the back burner or the rise in energy costs affecting the supply chain or huge revenue losses, what is really being talked about is how patients who need the medicinal properties of cannabis lose access to it and good, hard-working individuals who are either employed in any of the sectors of the cannabis industry or are consumers are then fiscally damaged due to the rise in costs and loss of revenues. What we are really talking about in all of this, is how people all throughout Europe are also being impacted in all aspects of their lives by this senseless war in Ukraine.
Written by Kim Thompson
Along with being an award-winning creative and literary writer, Kim works as a freelance copywriter, editor, and proofreader both domestically and internationally.
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