Author: George Mangion
Published on Malta BusinessToday 7th May 2020
Globally, cannabis has undergone a normalising process given its wide adoption, social tolerance and generally speaking a broader cultural acceptance; going from being branded as a gateway drug to being used as a therapeutic alternative to conventional medicine.
The legalisation promulgated for medical cannabis represents a golden opportunity for licensed producers seeking to position themselves at the forefront of this emerging landscape.
In fact, the legal cannabis industry is attracting more and more investors to Malta. These want to diversify their portfolios since this industry is considered one of the most promising industries. Many countries are now realising the potential of this growing industry and have moved to legalise cannabis for medical use. Uruguay was the first country in the world to legalise cannabis, followed by Canada in 2018 and eight US states have authorised recreational cannabis.
Looking at the European context, cannabis production has been decriminalised in countries such as Spain, Germany, Belgium, Netherlands, Italy, Switzerland, Portugal, and the Czech Republic. In line with findings that people are more likely to maintain or increase consumption in the coming months, there have been numerous reports from North America and Europe that consumers have been bulk-buying cannabis from dispensaries, leading to record-breaking sales. Governments in regions like Quebec, Illinois, and the Netherlands will keep cannabis stores open despite regional lockdown measures.
This is intended to maintain the supply of medications to patients. Some revenue may yet be lost due to the incidence of lockdown factors such as disrupted supply chains, shop closures, restricted movement, and general economic slowdown.
However, this temporary setback may also prove an important time of innovation, planning and strategising for cannabis companies, the fruits of which will outlast the pandemic distinction must be drawn between recreational and medical use, as well as the legal and regulatory issues underpinning both issues.
Smoking cannabis should not be recommended by any medical professional. Nevertheless, trained medical professionals may reasonably consider the use of cannabis-based medicines – such as oils, capsules, or vaporised substances – for chronic neuropathic pain and stress relief.
Given the ever-expanding medicinal capabilities of cannabis, Malta has followed suite pioneering countries such as Canada, and in March 2018we officially legalised the production and use of medicinal cannabis. The Maltese Parliament has approved the “Production of Cannabis for Medicinal Use Act”, which is an all-encompassing Act regulating which entities are eligible to distribute and produce cannabis under strict supervision.
The new law also allows all registered doctors to prescribe medical cannabis to patients, which can be acquired in local pharmacies. In order to produce cannabis, entities must first obtain a letter of intent from the Malta Enterprise and also a license from the regulatory authority. Such legislation gives our country an edge over other countries, as some countries still do not allow for the production and supply of medical cannabis.
For example, the use of medical cannabis is allowed in Germany, yet it is still in the first stage of granting its first licences and thus the first harvest is only expected in 2020. On the other hand, Malta Enterprise has already approved an area measuring 4,000 in square metres for cannabis cultivation.
Security systems must be in order to prevent unauthorised movement of cannabis material and only authorised personnel may be allowed to access specifically designated areas. Waste material must not be treated with negligence and has to stored in a lockable container. The production and use of medicinal cannabis may provide a newfound relief to people afflicted by illnesses, yet it also introduces a vast array of economic opportunities and positive spillover effects.
Naturally, cultivation requires a sizeable amount of professional staff to allow a smooth and orderly process. An increase in the number of companies operating from Malta to cultivate cannabis transpires into additional tax revenue for Government, besides increasing the amount of research and development.
Cannabis production in Malta is also expected over the next five years to increase the number of exports, resulting in an injection of funds into our local economy.
All of these factors are expected to contribute to a continued increase to our country’s economic growth. This is particularly important as the latest forecast issued by the European Commission indicates that whilst the growth momentum for the Maltese economy is expected to be badly hit by the pandemic.
The GDP growth is forecasted to drop this year to 3.1% or less. Total debt to service payroll subsidies for idle workers will possibly peak in the region of €8 billion. However, the net impact on the amount of jobs lost and reduced economic output created by the pandemic remains to be seen.
Another social aspect remains in place: the issue concerning the lack of information on the use of medicinal cannabis. Locally, patients often comment on the limited knowledge by medical practitioners, particularly as medical practitioners are sometimes reluctant to prescribe cannabis as a form of treatment.
Apart from this, the price of medicinal cannabis is quite costly for patients. Some patients have shown their dismay after discovering that some variants cost as much as €17 a gram, giving rise to a number of concerns regarding the affordability of this medicine by the general public.
Whilst progress by the Government has been made in this arena, the affordability issues of this effective medicine by the general public must not be underestimated. It is worth exploring, the possibility of offering this medicine to deserving patients at a subsidised price. Furthermore, one cannot separate the use of cannabis from its long history as an illegal substance, which is very often abused of.
Stigmatisation of the use of this drug is a strong deterrent for many healthcare providers and uncertainty will only slow down the use of medicinal cannabis. Indeed, the perception of the public needs to be better informed, with perhaps the introduction of frank discussions about the use of cannabis.
In addition, continuous educational programmes for medical practitioners are also a must, in order to remove the general stigma concerning its use. The opportunities for using cannabis goes beyond medical reasons.
The beauty industry is also jumping on the bandwagon, and at the moment Cannabidiol (CBD) is one of the most buzzed words one will find in the beauty spectrum. In fact, CBD oil is being used in a number of high-end creams, oils, and even make-up products.
Given this, the cultivation of cannabis in Malta provides an added opportunity for production to expand its use of oil by the beauty industry, thus enhancing the range of exports generated by the same industry.
Author: George Mangion
Published on Malta BusinessToday 7th May 2020
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