Okay, class, here’s a snap quiz. Name the world’s second-largest economy.

Bueller? Bueller? Anyone?

Wrong! It’s not China. It’s Europe.

In fairness, I posed a trick question. The European Union is collectively the world’s second-largest economy, in nominal terms, after the United States. But most Americans rarely think about the national economies in the Old World.

Parochialism runs deep in U.S.-based news media, reflecting the isolationist impulse that’s ingrained in American society. Unless there’s a far-flung crisis, the rest of the world barely gets covered on the nightly newscasts in our country.

If you don’t believe me, try an experiment tonight. Watch a few minutes of U.S. network news, then toggle over to, say, the BBC. The contrast is astonishing, if not dispiriting.

But the fact is, we live in an interconnected Global Village. That’s why, as a marijuana investor, you should monitor the world and not just America.

As the global economy recovers from its pandemic battering, Europe’s economy is returning to health faster than expected. That’s a good sign for the U.S. as well, because it means a stronger market for U.S. products. For years, the European Union was America’s largest trading partner (the U.S. was overtaken in 2020 by China as Europe’s number one partner).

Most European countries have legalized medical marijuana in recent years. Access to recreational pot is inconsistent, but a growing number of countries in Europe have decriminalized possession of small amounts of cannabis, making marijuana easily obtainable across the continent. Regardless of respective laws and regulations, social attitudes are tolerant and the police tend to turn a blind eye.

The European cannabis market is forecast to grow at a compound annual growth rate (CAGR) of 67.4% to reach 3.2 billion euros ($3.75 billion) by 2025, according to a new report from the research group Prohibition Partners.

Europe’s medical cannabis market will be worth 406 million euros by the end of 2021, a year-over-year growth of 75% compared to 2020. Germany is the biggest medical marijuana market in Europe, due to liberal legislation and a large and affluent population. By the end of 2024, Germany will comprise more than half of the European market for medical marijuana, for a value of more than 840 million euros.

Of particular interest is the explosion of demand in Europe for cannabidiol (CBD). In November 2020, the European Court of Justice ruled that CBD should not be considered a narcotic substance under E.U. Law.

According to marijuana research firm New Frontier Data, per capita spending in 2020 on CBD among European users varied widely by country, ranging from 7 to 57 euros (between $8-$68), for an average of 21 euros ($25). Total spending surpassed consensus expectations in both Germany and the U.K. (see the following chart):

Source: New Frontier Data

Meanwhile, we’re witnessing a boom in transnational mergers and acquisitions (M&As) in the global economy at large and within the marijuana industry in particular.

Read This Story: Let’s Make a (Pot) Deal

Mega-cap food, beverage, and cosmetics companies, many of them based in Europe, are scooping up smaller marijuana players and integrating their pot offerings into their global supply networks. These consumer behemoths get immediate marijuana industry exposure; the smaller, acquired cannabis companies get access to entrenched retail and supply chains.

When a marijuana M&A occurs, many investors don’t always understand its profit potential. That’s where our investment strategists come in. Our seasoned analysts continually scrutinize new, under-appreciated opportunities in the thriving marijuana sector.

We always keep an eye on the big picture, which means monitoring developments not just at home but also overseas. Whether it’s the U.S., Canada, Europe, Mexico, Latin America, Asia, or Africa, the entire world is our purview.

We’ve just pinpointed cannabis plays that could get swept up in the next wave of international mega-deals. If you’re looking for a future cannabis windfall, click here for details.

John Persinos is the editorial director of Investing Daily. He also writes the twice-weekly e-letter Marijuana Investing Daily. Send your questions or comments to mailbag@investingdaily.com. To subscribe to his video channel, follow this link.