Denmark now authorizes mass exports of medical cannabis

In 2018, Denmark launched two experimental medical cannabis programs each lasting four years: one authorizing its use, the other its production. Initially, only single-dose medical cannabis was authorized for export, but a decree has expanded these provisions. The new law took effect on January 1 and allows for the export of medical cannabis without any restrictions on form or quantity. Denmark is now at the forefront of the European medical cannabis scene.

European Leadership

The Danish authorities have shown remarkable efficiency in implementing the medical cannabis program: in just one year, medical cannabis was legalized, regulations were finalized, and exports were authorized. In comparison, Germany is still struggling to get its program off the ground. It has been more than a year that it is seeking to launch a program for growing medical cannabis at home, but this is constantly delayed. In fact, Denmark now has a head start over other European countries, whose programs are still being developed.

This advantage has led to a massive influx of foreign investment into the country. According to the Danish Horticultural Association and Invest in Denmark, the Danish cannabis industry has already attracted more than $306 million in foreign direct investment. The country is particularly a magnet for investments by large Canadian companies that are looking to enter the European market. Among those already established in Denmark are the giants Aphria, Aurora Cannabis, The Green Organic Dutchman, and Canopy Growth. Through subsidiaries and partnerships with local businesses, these foreign companies are collectively building approximately 2 million square meters of cultivation space to meet local and European demand.

So far, only one Danish producer has been granted a license to produce medical cannabis: StenoCare. During its initial public offering last October, StenoCare has nearly quadrupled in value. Its stock has now stabilized at twice its initial value. «I think the market is going to explode next year,» says Rikke Jakobsen, CEO of Cannabis Denmark, an NGO that works with producers, patients, doctors, and politicians.

Competition from countries in the Global South

For now, the Danish industry has the first-mover advantage, but it may soon face competition from Southern European countries such as Portugal, Malta, and Greece. Their climate allows for longer growing seasons, and labor is much cheaper there. Greece has already begun to issue its first licenses for domestic production and Malta is preparing to do so. Aware of their comparative advantages over Northern countries, these countries are considering becoming hubs for the European medical cannabis market by concentrating production activities.

These countries pose a substantial threat to the Danish cannabis industry, but according to Michael Prytz, investment manager for Invest in Denmark and an advisor to the Danish Ministry of Foreign Affairs, competition among European countries in the Mediterranean basin in the agricultural sector is nothing new, and Denmark—a country where a quarter of its exports are tied to the agricultural sector—has managed to remain competitive. “What happened is that competition came from the south, where the climate is clearly better, so Danish facilities had to become more sophisticated and automated (…) There has always been a need to do more with less here,» he explains. Its agricultural technology and expertise in plant genetics even make the country an ideal location for indoor farming.

Thus, despite the competition, Denmark remains an attractive location for indoor or greenhouse cultivation. The country has the advantage of having one of the cheapest energy costs in Europe, a key factor for the cannabis industry, which is very energy-intensive. Its proximity to the German market—considered the “golden goose” of the European market thanks to its aging population and the government’s coverage of medication costs—is also a draw. For now, the Danish program is only experimental, but according to Prytz, it is unlikely that it will not be renewed. He had received the support of many parties and 94% from members of Congress.