Germany makes moves to medicalize it.

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Germany‘s cannabis liberalization plans will not be as comprehensive as folks hoped. At least for now, Amsterdam-style coffee shops may be a pipe dream after talks with the EU. Instead, the Associated Press reports that the watered-down plan will use state-controlled non-profit social clubs. If you’re a German resident at least 18 years old, you can join one and purchase up to 25 grams per day (or up to 50 grams per month). However, if you’re in the 18-21 age bracket, that figure is limited to 30 grams for adults under age 21. 

Germany has allowed the sale of cannabis for medical patients since 2017. The cannabis liberalization plan is one of many social reform projects proposed by socially liberal German Chancellor Olaf Scholz’s three-party governing coalition planned to instate when taking office in December 2021.

Additionally, these cannabis clubs have a set maximum of 500 members each. The clubs can grow their own cannabis for their members to enjoy. Individuals can also grow, but it is limited to three plants per person. You’re only allowed to join one club, and authorities can limit the number of clubs that exist. The clubs’ expenses will be covered by membership fees, on a sliding scale, depending on how much cannabis the members use.

German officials also plan to set up regional test projects to sell cannabis through “commercial supply chains,” Health Minister Karl Lauterbach said. The finished proposal is a watered-down one that was initially proposed in October, which would allow the sale of cannabis to adults all across the country at licensed ships.

German ministers say that the scaled-back plan for liberalization results from restrictions established by the EU. Not everyone is ready to embrace the brave new world of cannabis legalization. Just as it is across the pond in the U.S., Conservative politicians oppose cannabis liberalization, saying loosening restrictions is dangerous, the BBC reports. For example, the Bavarian Premier Markus Söder tweeted that legalizing drugs was “simply the wrong path to go down,” adding that “drug clubs” did not solve any problems but created new ones. As a result, in a relatable outcome, Germany had to compromise. 

While Germany’s new cannabis plan is not a pro-cannabis advocate’s ideal outcome, it’s still a big step in the right direction. Twenty-five grams is nearly an ounce of cannabis. The intention of liberalizing Germany’s cannabis laws is to try and stop the black market. However, the country would be advised to look at places such as California, where the illegal market continues to flourish due to government red tape and high entry barriers into the legal market. If any country or state truly wants to eliminate illicit weed, it would be best served to create a realistic plan that meets consumers’ desires. 

The scaled-back plan comes after meetings with the European Union’s (EU) executive commission. The Associated Press reports that Agriculture Minister Cem Özdemir said EU law “sets us limits we must respect, but that I will also say we are pushing.” Özdemir also noted that the draft of the legislation will be finalized this month and that “consumption will become legal this year already.” The next step is to implement five-year tests of regulated commercial supply chains in select regions which remain to be chosen. 

The plans still need to obtain the approval of the German parliament’s lower house (officials said an endorsement is unnecessary from the upper house). That chamber represents Germany’s 16 state governments, including the country’s primary and more conservative center-right opposition bloc, which opposes liberalizing cannabis laws. However, the health minister argued that Germany’s existing policies have failed and added that their goal is to create safer products. “We are not creating a problem,” Lauterbach said. “We are trying to solve a problem.”

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A leader of Germany’s main opposition party took aim at the country’s proposal to decriminalize marijuana on Wednesday, asking the European Union to step in and block the plan. 

Klaus Holetschek, the health minister for a conservative-led state government in Germany, “met the EU’s director-general for migration and home affairs in Brussels on Wednesday to urge an EU veto,” according to the Associated Press.

The proposal was offered up late last month by German Health Minister Karl Lauterbach. If it were implemented, the new law would “decriminalize the possession of up to 30 grams (about 1 ounce) of cannabis and to allow the sale of the substance to adults for recreational purposes in a controlled market,” the Associated Press reported. 

As the German broadcaster Deutsche Welle reported in June, “legalizing and regulating the cannabis market was one of the progressive reforms promised by Chancellor Olaf Scholz’s government when his [Social Democratic Party of Germany] signed a coalition agreement with the neoliberal Free Democrats (FDP) and the Green Party last year.”

Lauterbach, a member of the Social Democratic Party, said in June that he had “always been opposed to cannabis legalization,” but that he revised his “position about a year ago.” 

He stated “his desire to have a new set of cannabis laws to present to Germany’s parliament, the Bundestag, in the second half of the year,” Deutsche Welle reported at the time. 

But those plans hit a snag in September, when the coalition government of the Social Democratic Party (SDP), the Greens and the Free Democratic Party (FDP) expressed concern that the proposal they had prepared may not be approved by the European Union courts.

“There is a degree of caution about promises of a breakthrough before the end of the year,” a German government official said at the time. “The complexity of all is starting to sink in, and there’s a sharper awareness of the risks involved. We don’t want another autobahn toll debacle,” a reference to a plan to build a toll road that was abandoned when the European court of justice ruled it violated an anti-discrimination law because it would disproportionately affect foreign drivers.”

Last month, after unveiling his decriminalization proposal, Lauterbach said that the German government would “check with the European Union’s executive commission whether the plan approved by the German government is in line with EU laws and would proceed with legislation ‘on this basis’ only if it gets the green light,” the Associated Press reported at the time.

Under the proposal, cannabis could be “grown under license and sold to adults at licensed outlets to combat the black market,” according to the AP, while individuals “would be allowed to grow up to three plants, and to buy or possess 20 to 30 grams of marijuana.”

Holetschek blasted the coalition government’s proposal on Wednesday, and urged the European Union to block the measure.

Per the Associated Press, “Holetschek said he told the EU official, Monique Pariat, that ‘the German government’s planned cannabis legalization doesn’t just endanger health, but I am convinced that it also violates European law,’” and  he “argued that two EU agreements oblige Germany and other member countries to criminalize the production and sale of drugs such as cannabis.”

Although marijuana is decriminalized in a number of European countries, full-fledged legalization is still fairly rare across the continent. 

Last year, the tiny state of Malta became the first country in the European Union to legalize pot. The new law allows individuals to posses as many seven grams and to grow up to four plants in their residence. 

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A new survey studying the consumption habits of participants in the European Union (EU) reveal that cannabis use has increased, and the use of ecstasy has decreased considerably.

The European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) recently found that cannabis and ecstasy saw the strongest changes in consumption habits. The European Web Survey on Drugs was conducted online between March and April 2021 with the intention of illuminating patterns of drug use to consider in future regulation. Throughout 21 EU countries and nine non-EU countries, the survey recorded answers from those who were 18 or older and had used drugs.

The survey results, published on January 20, recorded the drug use breakdown of the 48,469 participants. “Cannabis was the drug used most, with 93 percent of survey respondents reporting to have used it in the previous 12 months and with little variation between countries,” the survey results state. “MDMA/ecstasy (35 percent), cocaine (35 percent) and amphetamine (28 percent) were the next most reported illicit substances, with the order of the three drugs varying by country. Around a third of respondents (32 percent) reported using more (herbal) cannabis and 42 percent using less MDMA/ecstasy.” The results also show that a group of participants had used LSD (20 percent), a new psychoactive substance (16 percent), ketamine (13 percent) and heroin (three percent).

Furthermore, participants from the Western Balkans (which is made up of a Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia and Kosovo) also echoed the high consumption of cannabis, and decreased use in other substances—especially ecstasy. “Most respondents (91 percent) reported using cannabis in the previous 12 months, followed by cocaine (38 percent), MDMA/ecstasy (22 percent) and amphetamine (20 percent). Again, around a third of respondents (32 percent) reported using more (herbal) cannabis and 34 percent using less MDMA/ecstasy.”

In terms of where these substances were consumed, 85 percent of participants in the EU and 72 percent of the Western Balkans used these substances at home, rather than at public venues. It also takes into account that the motivation for cannabis use at home was because of a multitude of reasons. Participants wanted to relax, get high in order to improve sleep, but their use of MDMA or ecstasy was used to attain “euphoric and socialising [sic] effects.”

The study result breakdown states that the information shared by the 50,000 people included in the survey is just a small portion of the EU, but still offers a useful glimpse into the changing habits of residents. “While web surveys are not representative of the general population, when carefully conducted and combined with traditional data-collection methods, they can help paint a more detailed, realistic and timely picture of drug use and drug markets in Europe. Over 100 organisations [sic] took part in the initiative, including the Reitox national focal points, universities and NGOs.”

EMCDDA Director Alexis Goosdeel shared a statement regarding the goal of this survey, and the amount of participation needed from organizations to sort and analyze the data. “Web surveys are a key ingredient in our monitoring of Europe’s shifting drugs problem,” Goosdeel said. “They help us reach an important target population through innovative online methods. Today’s results reveal the wide variety of drugs available across Europe and provide valuable information on emerging trends and changing patterns of use during the COVID-19 pandemic. An impressive 100 organisations [sic] joined us this time in building, translating and disseminating the survey, ensuring that this is now an invaluable tool to help tailor our responses and shape future drug policies.”

Other studies in the U.S. have shed light on other topics related to cannabis, such as targeting teens with ads on social media or an updated Gallup survey that shows that a majority of Americans support legalization.

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As with many things in the cannabis revolution, there are moments when achieved reform or market creation feels bittersweet. Certainly, most within this industry, having attained a hard fought and well-deserved, even litigated, or legislative victory have also had the experience of realizing that such a development is both a step forward but also two back. 

Thus is the case in France right now.

On one hand, the order by the French Ministry of Solidarity and Health, issued on December 30, 2021, implementing Article R.5132-86 of the Public Health Code is a victory for the industry. In direct response to the KanaVape case, where the European Court of Justice decreed that imported CBD sold in France (and produced elsewhere in the European Union (EU)) was legal and by extension that the cannabinoid was not a narcotic, the French government has essentially enshrined an EU decision into French law.

Namely, that CBD can be sold and further that it is clearly not a narcotic.

However, it is what forms that cannabis could be available to consumers that are creating consternation if not a direct rebellion from some in the industry.

The Basics

Here is what the new order does. It legalizes the CBD industry and products. Here is the bad news. It specifically bans the retail sale of cannabis flower. This includes the smokable and tea varieties.

The positives? This development means that the purveyors of any CBD containing product that has been certified in the required regulatory pathways are finally in a position where there is a legal market for their products. 

No French police raids on grocery stores for CBD cookies loom in the horizon as a result. 

Merci beaucoup.

On the other hand, here is the merde a la mode.

The order is devastating to hemp producers and small stores who sell flower and products that contain the same (like hemp tea). While the legal limit for THC in hemp was also raised (from 0.02 percent to 0.03 percent), this means that cultivators must rely only on B2B sales to those who will further transform (usually extract) the CBD for use in other products (from cosmetics to food).

The new order also does not move CBD out of the Novel Food category. This could also be a ripe territory for legal challenges, particularly for CBD cultivated in France itself. However, given the blow just directed in the direction of the French cultivation industry, a by-product of this decision could very well move cultivation of even hemp outside the country’s borders.

A Whimper Rather than a Bang

The bottom line is that this development is hardly a French Revolution on CBD. Further it may well be a cynical move by French President Emmanuel Macron, who as of January 1 took over the next six month tenure as the President of the EU on his way to facing national voters in the near future. Namely, inch a conversation which is much despised at the nosebleed level of European politics only as far forward as absolutely necessary.

Indeed, this kind of unfortunate mindset is still much in keeping with the general attitude about cannabis cultivation, even of the medical kind, in Europe. Politicians in Germany were so opposed to legalizing home grow that they banned even registered German pharmaceutical firms from participating in the country’s first cultivation bid for the regulated pharmaceutical market. Beyond that, there are still many questions still open on the hemp side of the conversation.

It is trickle down reform and of course, as a result, will be fought, again, in court.

The Industry Strikes Back?

On January 3, industry groups including the hemp union and the trade association of CBD sellers, the Union des Professionals du CBD, for whom flower sales can represent as much as 80 percent of their business, issued a challenge to the new order. They are asking the government to suspend the same because at an EU level, there is no distinction between flower and extract. The application was submitted to the highest administrative court in France—the Council of State. It has so far not been rejected (meaning that the court could side with the industry).

Indeed, many on the ground feel that this is just another way of setting back the industry if not reform itself—and further apparently fairly similarly at the nosebleed level of European politics. For example, the discussion about the sales of both flower and CBD containing products has also been contentious in places like Germany (which has seen both police and court action against firms selling either or). In the UK, the sale of the same is explicitly banned. 

Yet this is not the trend in Europe. In most places, although not explicitly stated as such as in Belgium and Luxembourg, CBD flower is more or less treated like tobacco. In both Malta and Italy, home grow is also now explicitly allowed—even if just of the hemp variety. Indeed, that is one of the more intriguing aspects still outstanding of the KanaVape case (namely that the imported extract at the centre of all the hullabaloo was for inhalation). 

Obviously, since 2017 in Germany, there are very clearly medical flower sales that are smoked by patients and nobody is talking (yet) about removing flower from the high THC, adult-use market, coming hopefully now sooner than later aus Deutschland. There is also no guarantee that those patients now participating in French trials are only consuming their dispensed flower by approved medical vape.

Regardless, no matter the hypocrisies and inconsistencies, on both the smoking argument, and of course the perennial pushback from the police (on issues from not being able to tell the difference on the street, to driving issues), these are the issues much in the room across the European discussion right now. This newest development in France is no exception.

Further, the underlying assumption being made about even CBD flower is also highly significant. Not only does it rule out the opportunity of consumers and patients to make their own products using extraction methods, but it also continues to categorize all cannabis flowers in a highly harmful category.

This is concerning for two reasons. The first, obviously, is that this is potentially a major blow to the hemp industry in France, an industry with about $180 million in sales last year. More worryingly, it may also have an impact far beyond French borders. European countries are looking to each other to figure out a pathway to legalization that can be both accepted and implemented given the current state of international regulations on cannabis. Namely the still unchanged classification of cannabis and cannabinoids by the UN as a Schedule I drug.

Indeed, the many wrinkles in the path towards even CBD legalization seen in France, among other EU countries, are just a small precursor to the now looming fight over THC.

It is for all these reasons that the hemp industry at both the French and increasingly European level is watching this case actively, if not preparing strategies on how to fight back not only on the ground in France, but use similar tactics unleashed locally in every sovereign nation in Europe.

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In a sign that things are absolutely at a tipping point in Europe, the Mediterranean island of Malta became the first country in both Europe and the European Union (EU) to legalize recreational cannabis cultivation, possession and use. Luxembourg announced similar plans (and a similar model) about a month ago, but this will be (at least initially) limited to the public sale of seeds. 

While the bill still needs to be signed by the President, this is a small detail. In the words of the lawmaker who introduced the legislation into the Maltese Parliament, Owen Bonnici, this is in fact a “ground-breaking” moment. It also marks the first time a European legislative body has enacted recreational cannabis reform at a federal level. 

Despite a greater federal involvement in the regulation of the industry in Holland, even the Dutch have not gone this far. Switzerland is not in the EU.  Portugal and Germany are poised to move forward but have not yet. Luxembourg has come out of the shadows, but only to create a public seed market (for the time being).

Indeed, given the timing of such announcements, it is very likely that the Luxembourgian market and the Maltese one will develop along very similar timelines if not industry constructs.

The only difference of course is that in Malta, there is no grey area left. Cannabis specific outlets will be allowed to operate—albeit at a suitable distance from schools and youth centers.

Beyond this, consumers will be able to carry seven grams in public, grow up to four plants and keep up to 50 grams of cannabis at home.

The Birth of the European Recreational Cannabis Market

This development was only a matter of time. In the past months, recreational cannabis reform has been on the top of the docket all over Europe—even if not moving quite so quickly as in Malta. Most significantly, the new coalition government in Germany, Europe’s largest economy, has announced plans to legalize recreational use as early as next year. 

Luxembourg and Switzerland are both moving forward with limited trials. Portugal is also very likely to follow suit. Italy is also hovering around the edge of this question, with over half a million signatures gathered this summer to force the issue forward at the legislative level.

If there was a parallel, this is now a time very much like 2012 in the United States. Reform is now formally being accepted at a legislative level (although here it is at a sovereign rather than at the state level). In two years, there could be as many as five or six recreational reform states up and running.

What Does this Mean for the Industry?

Now is a very good time for American investors, in particular, to begin staking out a presence here. While flower and product cannot cross the Atlantic (at least not easily and without a few detours), investments can. The British are also circling. While reform has not (and probably will not come) as fast as it has on the continent, the equity markets in London are already a go-to place for those on the hunt for investment.

What has begun as a trickle this year is likely to become a veritable flood within the next six to 12 months.

German firms, particularly those who have managed to get into the medical space with an operational distribution license, have a clear advantage at the moment, across the region, simply because of the benefit of an early organizational head start.

Change at the EU Level

While such developments are clearly exciting, don’t expect all of this to be smooth sailing. There are still several big impediments that remain before the industry can operate more normally. While individual countries will begin to move in the recreational direction, the topic still needs to be addressed at a regional level. So far, the only place this has happened is with CBD (which still has not been adopted by many countries).

This will be an issue in (at least) the cross-border trade of cannabis—and for that reason, EU GMP is likely to play a much larger role, at least at first. German pharmaceutical specialty distributors will also have a clear advantage in the coming market—and not just in one country, but across the region.

Regardless, real cannabis change is finally coming. It just happened in Malta first.

And while it may still not make it into the top 10 most significant events in Maltese history, this development is certainly a marker of great change—and further, not limited to just this one, small European island.

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Budget wars, not antipathy to the prospect of the full and final legalization of cannabis, will probably put Portugal behind on the recreational reform question within the European Union (EU). The country’s 2022 budget had included tax cuts and increased public investment to stimulate the economy post COVID. It was opposed by both hard Left- and Right-wing parties. In late October, such political opposition to the budget proposed by Prime Minister António Costa triggered a final meltdown of the coalition that has governed here since 2015. 

In a rare event for the country, indeed one that has not happened since Portugal transitioned to democracy in 1974, the government was dissolved two years early by the right-wing President Marcelo Rebelo de Sousa. National elections will be held on January 30 of next year.

What happens next, even on the cannabis discussion, is anyone’s guess. That said, it is also very unlikely that any new government here will oppose forward cannabis reform. The country has a vested interest in the development of the sector. And even though the licensing process on the medical side has been fraught with difficulties if not delays, it is clearly proceeding.

Why is Portugal Important in the European Cannabis Discussion?

Portugal is famous for its liberal approach to all drugs, although it is inaccurate to say that everything has been “decriminalized.” There have been various attempts to reform the country’s drug policy ever since the 1970s. In the present, cannabis is not technically legal here, although the medical cultivation sector has certainly taken off since 2017.

In early June, a bill to formalize the legalization of the personal use of cannabis was proposed by two parties, the Left Bloc and the Liberal Initiative and forwarded to the Health Commission for debate. This debate never happened due to repeated requests for postponement.

Now that the government has been dissolved, the legislation will have to be re-introduced by the new government.

Regardless, since 2017, when Tilray began construction on its cannabis facility, Portugal has begun to play a larger and larger role in the entire European cannabis discussion. This, so far at least, is less about the liberalization of policy domestically and more about the ability to obtain cultivation licenses (although this too is not as “easy” as many in the industry have infamously claimed). That said, the country has the most operating regulated cultivation facilities and licenses of any EU sovereign state outside of Holland. Of course, unlike the Dutch, these are all of the internationally regulated, GMP variety.

As it stands, the market is geared towards the production and, coming soon, extraction of the plant primarily for export (and even more specifically, targeted at and for the German medical market). Indeed, production and labor costs here put the country, along with Greece and evolving African cannabis cultivation economies, roughly on par in terms of cost per gram (both for flower and extracts).

What Would a Portuguese Rec Market Actually Impact?

The answer is, quite obviously, that a recreational market here would positively affect not only the broader economy but the tourist sector, in the process creating a booming market with a canna flair.

That said, it is also clear that this might in turn be a bit of a stretch for a region where the most forward cannabis reform country (Luxembourg) just punted on the question and took a slower path to the entire conversation with a home grow provision (along with supporting a regulated cannabis seed market).

However, after Europe emerges from what is likely to be another hard COVID winter, such sensitivities could well be overrun by politics and politicians who are looking for economic stimulation any way they can get it. This entire conversation, of course neatly fits that bill, no matter how contentious economic development with a cannabis flair still is outside of Greece (at least within the EU). Certainly, the medical sector has gotten more respectable over the last four years. Even the German government is now considering the same, in part because of the estimated tax revenue that is likely to come of the formal development of this market.

Bottom line? Portugal is no longer the outlier it once was on the topic. Indeed it may now fall behind full reform in other countries even within the EU, starting with both Luxembourg and Germany.

That said, the development of a fully legit market here will undoubtedly continue to impact the entire industry across the continent—starting with sourcing medical production bound for elsewhere, but undoubtedly, as the entire discussion progresses, recreational cannabis products too.

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Even the most die-hard “medical only” German voices within the cannabis industry have been posting the news all over their social media including LinkedIn for the past week, even before the news was official. But as of Wednesday, that has changed, officially. The new so-called “Traffic Light Coalition” will indeed be legalizing recreational use cannabis with a bill to do so introduced in the German Bundestag next year.

For those who have fought for the same, in the trenches, for years if not decades, it is an exciting moment. It is also electrifying the industry, which now has over 100 medical cannabis specialty distribution licenses, a growing patient base (estimated 100,000 at this point), and a topic that just will not quit. Particularly as the Swiss (in part, a German language country) are doing the same thing. This is particularly momentous given the timing. Germany might even beat Luxembourg into the recreational discussion within the European Union.

That said, no matter how exciting, the devil, as always, is in the details. How much, what exactly, and how it will be implemented is all still up in the air. Cannabis is still not actually decriminalized, and there are all sorts of strange pieces of case law and to be changed statutes still very much in the room.

What Is Known So Far

The reason this is such a big deal is that the announcement comes as the three parties who won the most votes in the federal election in September have sealed the deal to work together with a common plank that includes cannabis reform (along with phasing out coal by 2030 while also having at least 15 million electric cars on the road). After that, it is just a matter of crafting the legislation and introducing it into the German parliament. Unlike the U.S., where there have been multiple, unsuccessful attempts to pass a federal legalization bill, this one is almost guaranteed to pass. The Germans are funny like that.

Here is what is actually official. In a statement released by the SDP, Greens and FDP, this is what the coalition plans to do. “We are introducing the controlled supply of cannabis to adults for consumption in licensed stores. This controls the quality [of marijuana], prevents the transfer of contaminated substances and guarantees the protection of minors.”

The government will review the experiment in four years to determine the impact (including economically and socially). That said, there is little chance such a forward step would be rolled back.

Issues And Problems Along the Way

It is not like this is going to be smooth sailing. There are a few major issues to address. Chief among those is how to amend the country’s federal narcotics law. Cannabis, including CBD, is considered a narcotic. This is already out of step with EU policy on the same (with a pending lawsuit to change that). Regardless, add THC to the mix, and there is going to be some fancy footwork and legal eagling to make the change happen not only in the new legislation, but that which governs and regulates the medical variety.

German Impact

There is little doubt that Germany’s move to recreational cannabis will forward the debate across Europe—and potentially in the same timeframe as it has impacted the medical conversation. Just four years ago, the concept of using medical cannabis even for pain relief was a very strange, often socially unacceptable topic. Today, there are about 100,000 German patients.

The Germans may not have arrived yet, but they are certainly on the way.

This is absolutely a Colorado if not Canadian tipping point. However, it may also be one that is not just about Germany, or even Europe, but an international and global one.

Coming as it is on the international news of Mexico implementing recreational reform by year’s end and Italians potentially having the ability to vote on legalizing personal possession and home grow as of next spring, not to mention both Luxembourg and Switzerland definitely moving ahead with their own recreational markets, it is clear that full and final cannabis reform is now a mainstream topic and goal on a federal level of many countries.

This will also, undoubtedly spur on the debate in the U.S. If Germany can do this, less than four years after federal legalization of its medical market, what is the U.S. waiting for? Or for that matter China? In the latter case, with a corporate real estate market melting down, perhaps finally, and on a global scale, cannabis will be considered a great if not green and global investment.

In the meantime, the last days of Prohibition have clearly arrived and on a global level.

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Ever since Tilray decamped for Portugal during the early days of the German cannabis cultivation bid circa 2017, the country has been touted as “the place” within the European Union (EU) for the German distributors to source their product.

That said, the actual progress of the industry has been a little slower than that—in part because of the length of time it takes for legislative change to happen. Indeed, it was not until April 15 of this year that Ministerial Order No. 83/2021 was finally published. According to local legal practitioners, at least, this order also has clarified a great many practical aspects of the application process. This includes reference prices.

Looking at the progress of cultivation licenses, however, and the proof is in the pudding. To date, there have been 114 applications for the cultivation of cannabis to the National Medicines Agency (Infarmed). Of these, just 23 are “under analysis,” 11 are awaiting a response from the cultivators, and 61 are waiting to be inspected (a major issue facing almost every budding cannabis cultivator thanks to COVID.)

Here are a few more dampening statistics. Of the 19 currently operational cannabis cultivation facilities, only three can manufacture medical grade extracts and products. One of these is in business solely for the purposes of providing “quality control.” The remaining facilities are in business to cultivate the plant as a “raw material,” or, of great interest of course to every German distributor looking for new sources of EU cultivated product, “active substances.”

What, exactly, is going on?

EU GMP Is Not an Easy Certification

Despite its reputation to the contrary, including the now pending legislative move to formally legalize adult-use cannabis, the medical authorities here are very strict. They must be. They are the country’s version of the Federal Drug Administration (or FDA).

Indeed, it was only this February that Tilray announced that it had received the first and only market authorization for medical cannabis products in Portugal. This means that everyone else is cultivating for export to other countries (notably Germany). Many German distributors (for starters) are currently importing raw flower (or flos) as “Active Pharmaceutical Ingredients” or APIs. There is clearly a market for the same.

Getting a medical license also takes capital. And it is also very clear that Portugal is also not the only game in town. Greek, Macedonian and, as of this year, African cannabis is also starting to enter the room.

Further, while there is a great deal of enthusiasm, generally, about the coming cannabis revolution on the recreational side, the medical game remains, as always, a difficult nut to crack, even after the capital has been raised. This is not always a popular task to take, but it is clear that when the dust clears, Infarmed is not interested in being just a pass-through agency.

According to Rob Smallman, a highly experienced Canadian cultivator who has been involved in multiple European projects, including in Portugal, “experience and a focus on the actual business in the room is a far better strategy than just satisfying investors.”

Michael Sassano, CEO and founder of SOMAI Pharmaceuticals as well as the recent recipient of an innovative product grant by the Portugal 2020 committee, concurs. “Cannabis entrepreneurs need to know exactly what they are doing to succeed and receive full certification,” he said. “Medical cannabis growing, and manufacturing requires more than just a lot of capital. It requires deep knowledge of regulations and GMP standards plus serious knowledge of the cannabis plant to surpass timely building, operational, and international sales goals.”

Portugal 2020 is a partnership agreement between Portugal and the European Commission to fund policy goals of interest to both member states and the EU as a whole.

Domestically, however, there is another catch. In a land known rather infamously if not accurately as “anything goes,” on the “illicit drug” front, cannabis as medicine is just as foreign here as it is everywhere else. Not to mention, just like everywhere else, medical cannabis is very expensive. The monthly price tag of about $600 is out of reach to most, if not many.

What Impact Does Pending Recreational Reform Mean for Portugal?

There are several answers to this question. The first and most obvious one is “nothing” since Infarmed only regulates a medical market, not a broader consumer one (more like BfArM in Germany than the FDA in the United States).

However, this is also not the only answer. Forward reform of Portugal’s legislative approach to recreational reform has repeatedly stalled, even as both Switzerland (outside of the EU) and Luxembourg (within it) have progressed.

There is of course this twist. Just like the Czech Republic (and Switzerland) have now started to discuss (and Holland has been in the midst of the same since 2017 when Dutch insurers stopped covering the drug the same month the German Bundestag or Parliament, voted to cover it under Deutsch public health insurance), the entire discussion of “medical” cannabis is coming under scrutiny. Particularly for domestic use, rather than foreign export.

This is a simmering issue. But it is bound to stay in the room, particularly given the advance of overall cannabis reform across Europe.

In the meantime, it is clear that Portugal is proving to be a stringent port of call for all things medically cannabis related—and far from just a pass-through cultivation or extraction state.

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