Malta's medical cannabis industry on stand-by but poised to become a HUB for European markets

The Medical Cannabis World Forum, a two-day conference on medical cannabis and the future of the industry, was held this week in Valletta, the Maltese capital. Malta legalized medical cannabis last March and the Mediterranean island's political representatives were very keen to welcome the new industry.

However, national regulations have been somewhat delayed, and no company has yet obtained a license to produce and process cannabis on Maltese soil.

Political enthusiasm

Maltese Prime Minister Joseph Muscat declared: «This is the future. There is currently a global race around the medical cannabis industry and we want to be market leaders».

«We believe Malta will become a center of excellence for medical cannabis, adopting an advanced scientific research approach and a comprehensive evaluation of every stage of the supply chain, to ensure patient access to quality cannabis and for therapeutic use,» added the Parliamentary Secretary responsible for Malta Medicines, the licensing agency.

Dr Chris Cardona, Minister for the Economy, Investment and Small Businesses, reiterated the island's interest in the medical cannabis industry and the economic opportunities it offers. He said: «The Maltese economy is thriving and medical cannabis production is an economic niche that will broaden our horizons. Malta is a perfect place for opportunities and we are building a strong regulatory framework to contain this industry».

Despite strong interest from the Maltese government, domestic production has yet to begin, as regulations are not yet in place. Some companies have already obtained Letters of Intent (LOI) from Malta Enterprise but no license has yet been granted. According to Luana Mifsud Buhagiar, Director of Scientific Initiatives at Malta Medicines, Regulations, license fees and application procedures will be published shortly. Companies that have obtained a letter of intent will then be able to apply officially to the health authorities for a license.

Malta, future HUB for European markets

Aurora was the first company to obtain, in July, a letter of intent approving the construction of a vertically integrated operating structure. The facilities of Aurora Malta, a Group subsidiary set up in partnership with local company Cherubino, will cover all stages of production, from cultivation to the production and sale of medicines. «Having a GMP-compliant complex in Malta will ideally position us to serve various international markets, such as Southern Europe and beyond,» explained Mr. B. B. B., Chairman and CEO of Aurora Malta. Neil Belot, the Group's Director of International Development.

Antonio Costanzo, his counterpart at Aphria, another Canadian company, expressed himself in similar terms: «Malta has rapidly established itself as a key jurisdiction in Europe for creating a regulatory environment conducive to high-growth sectors. Malta's position in the European market and its proximity to mainland Europe provide Maltese players with a significant comparative advantage in the market». The group has set up a Maltese subsidiary, ASG Pharma, with a high-capacity laboratory that complies with European standards. The group's ambition is to create a hub for the production and distribution of cannabis oil to European markets.

However, the process is likely to be lengthy. As Buhagiar explains: «obtaining a letter of intent from Malta Enterprise is not the same as obtaining a license from Malta Medicines. Before producing anything for commercial purposes, they [companies] will have to undergo a rigorous application procedure, run their facilities, have their production methods validated and obtain EU-GMP (European Good Manufacturing Practice) certification from the health authorities».

While waiting for local production to take off, certain companies have been authorized by the health authorities to import products. These are generally foreign companies already producing in their home countries. This is the case, for example, of Bedrocan in Holland and Pedanios Gmbh, a German company owned by Aurora.

The Maltese medical cannabis landscape has so far been dominated by foreign companies who see an opportunity to flood the European market. Canadian companies have the upper hand, and are already well established with substantial capital.