European Cannabis Weekly Round-up

Mile High Labs set up in Northern Ireland

On April 18th, Mile High Labs officially launched sales into the UK and the EU. Jason Roth, CEO of Mile High Labs, commented, “Our expansion is a testament to the global consumer demand for CBD.”

Mile High Labs had begun preliminary operations in Belfast during the fourth quarter of last year, recruiting staff and building a team to speed up the process. The move represented for this American company the first step into the emergent European cannabis market, which a large number of Canadian and US companies seek to enter.

Based in Colorado, Mile High Labs is an extractor of CBD isolate, the purified form of the non-psychoactive element of the cannabis plant. The UK, therefore, proves to be a logical choice for this company, since the current framework allows legal CBD as long as it does not contain more than 0.2% THC, the chemical that causes the cannabis ‘high’.

Moreover, the UK, and the Northern Irish region especially, offer further advantages for Mile High Labs. Most importantly, the UK patent box system allows the company to lower its effective corporate tax, opening up a low-cost gateway to serve European markets. Similarly, the relationship with Invest NI, which the company defines ‘very close’, creates new business opportunities in the region.

EU to Increase Permitted THC Levels in Legal Cannabis Products

Currently, within the EU bloc, the permitted THC levels in legal cannabis product are limited to 0.2%, whereas in the US, Canada and Switzerland the existing limit is 0.3%.

The 0.3% limit was actually allowed in the EU until 1999 when stricter governance of the bloc pushed it back to the current limit.

Recently, lawmakers in the European Parliament’s Committee on Agriculture and Rural Development voted to include the reintroduction of the 0.3% limit within a set of proposals for post-2020 reforms. These proposals will go through the European legislative process, which includes the whole Parliament and the EU Council.

This decision comes after the European Industrial Hemp Association (EIHA) made an appeal last month, asking as follows:

“That is why we are asking the European Parliament, the European Commission and the Member States to reverse the tightening up of 1999 and to restore the European hemp industry’s full competitiveness.”

The managing director of EIHA Lorenza Romanese, commented “[the vote] represents a major step forward for the sector. EIHA worked hard to assure the positive vote.” Indeed, this rule change might prove a positive development for patients and businesses, since it would bring the EU in line with the dominant cannabis-sector geographies.

Germany

Two weeks ago we reported the outcome of the public tender to cultivate and distribute medical cannabis in Germany. Among 79 contenders, the 13 lots have been awarded to three Canadian companies: Aurora, Aphria and Wayland through its joint venture with Demecan GmbH.

On April 18th, both Aphria and Aurora have announced that, following the conclusion of a mandatory 10-day standstill period for public contracts, the companies were granted cultivation licence. Thus, Aphria is building an indoor growing facility in Neumunster, whereas Aurora is set to begin construction of an indoor cannabis production facility in Leuna, to be completed within 12 months from now.

On the other hand, Wayland/Demecan – which was originally awarded three cultivation lots – is now facing some issues linked to the assignation of these lots. Namely, four licences, including the three originally given to Demecan, remain under review as they have been challenged by a third party.

In the meantime, the other two companies are awaiting the completion of the tender process for the four remaining lots under review, one of which was provisionally awarded to Aphria Germany.

Spain

Mediterranean Countries, including Spain, are considered to be the most ideal growing regions in the world and companies from around the globe are seeking access to them. Like other Canadian and American companies, Canopy Growth is trying to expand its European footprint in this direction.

Besides the already-existing production sites in Denmark and Germany, Canopy has recently secured access to the Spanish market. On April 16th, they announced that the acquisition of Spain-based licensed cannabis producer Cáñamo y Fibras Naturales, S.L., known as CAFINA, had been accomplished.

The advantages of this acquisition lie behind a special permission that has been recently given to Cafina. Previously, this research-focused company had been awarded a hemp licence which authorized the cultivation of cannabis sativa (<0.2% THC). Last November, Cafina got a special licence from the Spanish competent authority, which allows them to cultivate, distribute and export cannabis containing more than 0.2% THC for medicinal and research purposes.

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