Several Madrid companies bill millions of euros with hemp and its related products. Although the plant is illegal and police persecution of the sector, they forecast a boom encouraged by foreign investment
«Marijuana has not yet reached the ceiling.» Álvaro Zamora, 37, is clear. And it does not refer to the size of the plants but to the marijuana business, which is experiencing an effervescent moment. Zamora has more than half a life being passionate about the hemp plant. 15 years ago he started working behind the counter of a small shop in the center of Madrid dedicated to cannabis products. Now he speaks from a 1,200-square-meter warehouse in Rivas, the headquarters of Leaf Life, a company dedicated to the distribution of products for cannabis self-cultivation , where Zamora serves as head of international sales. The firm closed 2016 with a turnover of 12.7 million euros, three times more than what it invoiced in 2012 (4.1 million), according to data from the commercial register. Encouraged by the global climate of legalization , businesses related to cannabis flourish. In Spain, despite the prohibition of the plant, the cannabis industry is experiencing its best moment in two decades; Madrid is home to many of these companies.
“The profile of entrepreneurs is changing a lot. At the beginning we were all hippies and every time I see more men in suits and ties, ”adds Zamora, who has visited ten congresses this year, in Italy, Mexico or the United States to meet with large international investors. Leaf Life, with 46 workers, is not the only company based in Madrid dedicated to this buoyant business. Although they export, generate direct work and invoice millions of euros in a legal way, the entire industry associated with cannabis continues to live with some concern: unlike other countries, in Spain the mere fact of growing the plant is illegal. In addition – and unlike other autonomous communities – in Madrid some actors in the sector feel “harassed”.
The hemp market has several facets and types of businesses: associations or clubs of smokers, growshops (stores for growers), seed banks, industrial hemp, distributors, manufacturers, magazines and lawyers. Users use the plants for recreational or therapeutic purposes and plant at home or join a club. Both activities are framed within the margins of the law. While hemp seeds are legal, raise a plant no. At the same time, going to a club to consume is allowed, but it is forbidden to transport the minimum amount of marijuana or hashish on the street. Although users are the most obvious part of the cannabis world – three out of every ten Spaniards have ever consumed it, according to data from the National Drug Plan – the facet that moves more money and the one that has grown the most is the industrial one: companies that create seeds, those that distribute wholesale materials to raise the plant or stores that they sell to growers.
The first growshop in Spain opened in Madrid: Houseplant opened in 1997 in a small shop on Palma street. Like many businesses of the time, they dared not put the minimum reference to marijuana in their logos or advertisements. Currently, it is still operating in Malasaña, but in a huge two-floor store in San Vicente Ferrer. Last year, it invoiced more than one million euros, ten times more than in 2014. For its part, Cannabiogen, created in 2002 as the first Spanish seed bank, multiplied its income by four between 2012 and 2016, up to 1.2 million in sales annual
“My California colleagues are surprised at the size our industry has acquired despite the illegality [of the plant],” says Enrique Díez, aka Kaiki, founder of Cannabiogen, based in Alcobendas. Like other cannabis-pioneering entrepreneurs, for years he used a pseudonym for fear of reprisals: «Nobody wanted to get in trouble with the DEA [US Drug Enforcement Agency].» Now, these small entrepreneurs in Madrid, who opened business in the sector two decades ago, are experiencing a bright moment, thanks to a progressive normalization of cannabis and the impulse of foreign markets where medicinal or recreational consumption has been legalized. They are still far from the multimillion dollar figures of some businessmen from Canada or from several US states that have legalized the business, but predict a prosperous future for the sector in Spain.
«We have it all but there is still legal uncertainty,» says Xosé Bargé, spokesman for Spannabis, one of the most important fairs in the sector – «the main cannabis exhibition in Europe» – and which has been taking place in Spain for fifteen editions. Madrid has hosted the event in previous editions (in La Cover de Leganés, Casa de Campo or in Rivas) and was going to do it again in 2019. But last October the organizers changed Madrid for Barcelona, specifically for Cornellá de Llobregat The reason: the previous year his visitors felt harassed by the police at the entrance or exit of the event, which fined several of them. «Something that does not happen in Catalonia,» they say from the organization. It coincides that in 2019, Spannabis celebrates the biggest event in its history: 282 exhibitors, with a waiting list of a hundred, (and with more than twice as many exhibitors as ten years ago). An entry to the March congress, with an invitation to the afterparty at the five-star hotel W Barcelona, borders the 500 dollars (499, about 440 euros).
Although she was a pioneer in the cannabis industry, Madrid has lagged behind Barcelona. In Spain, in 2028, the medicinal and recreational cannabis industry has the potential to reach 6.1 billion euros, according to a study by the London consultant Prohibition Partners, always assuming legalization. In addition, the activity could generate more than 3,000 million euros in taxes and social security contributions, according to a study by the Drug Policy Unit of the Autonomous University of Barcelona published last month. The most optimistic predict that Spain could be a world power in the sector because of its favorable climate for cultivation and because it is the second largest tourist market in the world.
Madrid is home to two of the six companies that the Medicines Agency licensed in 2016 for cultivation for therapeutic or research purposes: Alcaliber, recently sold by Spanish billionaire Juan Abelló to the British fund GHO, and DJT Plants, controlled by the British William Piccaver Stuart. These plantations, authorized by the Government, are seen as the prelude to the expected legislative relaxation. On the other hand, Barcelona and the rest of the Mediterranean have benefited from its climate, ideal for outdoor cultivation. There are some of the biggest seedbeds, such as the Catalan Alchimia (7.5 million turnover and 39 employees); the Valencian Sweet Seeds (6.3 million and 43 workers). The largest of all is the Basque Dinafem Seeds with (17.8 million and 72 employees). Basque Country pioneered the creation of smoking clubs.
“In Spain, the plant is demonized. In Madrid, all the activity, very persecuted ”, affects the lawyer Bernardo Soriano, who is also a spokesman for Responsible Regulation. Activists and businessmen also complain that the prosecutor’s office has recently tightened its stance regarding smoking clubs . They point out that the police are waiting at the doors of these premises to fine members for carrying cannabis in their pocket. The possession of drugs on public roads, even if it is an amount for personal consumption, is sanctioned with fines of between 601 and 30,000 euros.
Cintia, 30, is the manager of one of these clubs. He does not want to give his real name and asks that the location of his establishment not be identified, next to a discreet portal in a neighborhood of Madrid. The space, diaphanous and bright, has two floors: in one there are a couple of teles; in the other, only books, armchairs and even a smoke-free room. Between them, a small room works as a dispensary for various varieties of hashish and marijuana. “Every day, when I come to work, I think I can end up at the police station,” he acknowledges. He opened the club two and a half years ago. Account that started with 20 partners, now have 600: «300 assets [that come at least once a month] and about 50, therapeutic.» «We think about growing and opening in another neighborhood,» says the businesswoman, «but we are waiting to see what happens with the legal issue.» His colleagues in the sector in other cities in Spain tell him that the police do not stop them as much as in the capital. «In Spain, 320,000 people are sanctioned annually for having cannabis in their pocket,» says Bernardo Soriano, who represents many of the 110 clubs currently operating in the capital, according to data from the FAC (Federation of Cannabis Associations).
In spite of everything, in Madrid the industry continues to flourish. Entrepreneurs believe that the greatest potential of the capital, in the legalization scenario, lies in the sale of the final product in dispensaries and in smoking clubs, which could open their doors to tourists. The lawyer Bernardo Soriano believes that in the current legislature it is “unlikely” that the sale of marijuana is authorized, but he predicts that it will occur soon: “At the latest in five years”. He believes that the legalization last month in Canada , “driven by a liberal government”, will contribute to the dismantling of many objections from the Spanish right and from the most moralistic and paternalistic sectors: “We have never been so close”.
Experiences with cannabis in the nine US states where its use is allowed – as in Colorado, where therapeutic use is legal since 2000 and recreational, since 2012; in Uruguay or, since last October, in Canada they are not only spurring the global market but also the political debate.
«Only the political path remains,» says lawyer Bernardo Soriano. It refers to the fact that the laws raised and the judgments ruled in Spain are closing the door more and more to options such as the so-called «collective consumption» , a legal precept on which the smoking clubs are based in order to function.
«We have done everything possible,» says the lawyer who is also a spokesperson for the Responsible Regulation initiative, in defense of removing the plant and its derivatives from illegality. They have launched ideas such as the realization of an autonomous law in Madrid (they registered a Proposal No of Law for its achievement) as well as several Popular Legislative Initiatives (ILP) in other regional parliaments: in 14 of them some type of action has been carried out.
Catalonia passed a law to regulate the clubs, but the Constitutional annulled it shortly after considering that it invaded the powers of the State and could protect illegal activities. In Madrid, on the other hand, regional law did not prosper. In addition, the entry and exit of club members is controlled and several have been closed – the last one, a week ago. Many, within the world of cannabis, associate that hard hand with the arrival at the Provincial Prosecutor’s Office of Madrid of María Jesús Armesto.
From the Responsible Regulation they convened last year, at the end of May, a concentration in Madrid, at the Puerta del Sol: 25,000 people attended. «Apart from that it can be a strategic sector, in Spanish society there is a de facto standardization,» adds the lawyer. It provides another figure to reinforce that idea: «12 years ago there were no smoking clubs in Spain, now there are 1,500».
After the announcement of the legalization in Canada, Podemos took the debate on cannabis to Congress . Its ultimate goal is to modify the current narcotics law, which criminalizes the sale and cultivation of marijuana and restricts consumption and possession to private spaces.
The party plans to present a proposal to legalize cannabis in early 2019. A regulation with which the party also seeks to avoid market concentration in a few hands. «We want the Spanish model to be deeply democratic in every way, and especially economically to avoid monopolies and / or oligopolies,» says Podemos deputy Miguel Vila. “This is, in fact, the fundamental battle. The question is no longer whether or not to legalize cannabis, but of how and when we will do it. In the how is where the key is and therefore where there will be greater political dispute, ”adds the politician.