16th April 2021
The industry
Over the recent years, the medical use of cannabis gained traction and steady growth due to patients’ interest in its application to treat a plurality of medical conditions. The effects are known to be beneficial and provide some relief to patients suffering from chronic pain, anxiety, reducing symptoms of epilepsy, asthma and Alzheimer’s disease, and the improvement of lung capacity. Such benefits emerge due to the anti-inflammatory effects it produces on the nervous system of the body. Further to providing new-found relief to people afflicted by illnesses, medical cannabis also introduces a number of economic opportunities.
Responding to patients’ demands, a number of states in the US during the late 90’s paved the way towards the legalisation of medical cannabis on a global level. Indeed, today, most EU member states have legalised or are actively considering the legalisation of medical cannabis. Following the production of evidence highlighting the power of medical cannabis, the EU Parliament passed Resolution 2018/2775 in February 2019, effectively urged the EU Commission and Member States to carry out research and form a legal framework on medical cannabis. Nonetheless, the approaches taken, both from a regulatory and product point of view, vary considerably across the member states as no EU-wide policy has been adopted to date.
In 2019, the revenue of the legal cannabis market in Europe overall was approximately 0.3 billion U.S. dollars. According to the 5th Edition of the European Cannabis Report issued in 2020, as more European countries legalize cannabis, the market revenue is expected to rise to almost 2.5 billion U.S. dollars by 2024. It’s also projected to become the world’s largest legal market by 2028.
Malta was one of the first EU countries which legalised the prescription of medicinal preparations of cannabis and cannabinoids by medical practitioners, and which issued legislation to cater for the local production and distribution of cannabis for medical and research purposes.
It is important to keep in mind that while many countries have legalised or are moving towards the legalisation of medical cannabis, only a limited number of countries worldwide have introduced laws permitting the use of recreational cannabis.
Regulatory Framework in Malta
Malta has made great strides in legislating for medical cannabis, developing infrastructure devised to welcome foreign investment. The principal comprehensive law in Malta is the Production of Cannabis for Medicinal Use Act, 2018’ (the Act), which sets out all the guidelines and processes required for those that wish to produce cannabis for medicinal use. Moreover, the Medicines Act is another important piece of legislation which regulates medicinal products in general, transposing Directive 2001/83/EC (as amended).
According to the Act, anyone who obtains the appropriate license may set up business in Malta. To obtain such license, entities are first required to obtain a letter of intent from the Malta Enterprise. In order to apply for the letter of intent, the applicant must submit all due diligence documentation and ensure that all aspects of the company are in full compliance with the provisions of the Act, as well as any other relevant international obligations.
The next phase is for the entity to demonstrate that the production of medicinal products satisfies the criteria specified in the Medicines Act. Once all of these conditions are satisfied it is possible to apply for the actual license with the regulatory authority. The issuance of this rests on the requirement for all necessary approvals, certificates and permits.
Once the process is completed, the license holder is entitled to produce, process, import, and cultivate cannabis for purposes of research and medicine in Malta.
The nature of the business means that it is one of the most regulated sectors, and several safeguards have been put in place. One such important factor is the appointment of a Qualified Person (QP) who must be a pharmacist registered with the Maltese Pharmacy Council and also resident in Malta. Their job is to ensure the standards of good practice are continually met. Meaning that each batch of products is tested and approved under the laws in force. All this information must be recorded in a register. Beyond this, there are several other requirements and restrictions surrounding the manufacturing process, import and export documentation, and responsible waste management among others. All procedures and processes must also be consistently observed and monitored for policy changes.
The medical cannabis business in Malta has enjoyed a strong start and hit the mark right off the bat. According to information tabled at Parliament, as at February 2021, Malta Enterprise confirmed that it had received 53 applications and issued 33 letters of intent to companies seeking to produce cannabis for medicinal purposes. This is a clear indication of just how the country has progressed in the area within a short period after the law was introduced. The applications were approved on the basis that they would create hundreds of new full-time jobs and greatly supplement Malta’s exports by 2022.
Why Malta?
With the increased demand for the supply of medical cannabis, and considering the value of the industry, more and more companies are seeking to establish a European base for their production and distribution. When you consider Malta’s comprehensive laws introduced in the recent years, favourable tax rates and generally good climate, it becomes an attractive and cost effective proposition.
Furthermore, given that Malta is already home to well-established and reputable pharmaceutical activities, it offers resources and proficiency which can be easily utilised for the production of cannabis for both medicinal and research purposes.
The country’s EU membership means that cannabis is to be produced to EU-GMP standards, adding yet another advantage over products manufactured outside the bloc, and thus offering high value growth opportunities for exportation to the European market.
All these factors go hand in hand with Malta’s willingness and determination to place itself at the heart of the growing medical cannabis industry.
Our Team at Bridge can assist you throughout the setting up process in Malta, including obtaining financing and assisting with the application to obtain the necessary license and allocation of industrial space, making sure to put you in the best position to be successful in this emerging industry.