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Network News • 06-08-2020

Cannabis-Infused Products The Future Of The European Market?

Author: Jurgen Dalli – Junior Legal Associate, PKF Malta
Published on Malta Chamber of Commerce Blog:  6 August 2020

Perhaps, Europe has been one of the most active communities in this regard as many have legalized medical cannabis and have delved into the exportation and importation of cannabis. The latest novelty vis-à-vis cannabis in Europe is that of creating cutting-edge cannabis-infused products for the European Internal Market such as beverages, chocolate, and oils as well as dog treats amongst others.

This innovation has been dabbled with by Canadian syndicate: The Valens Company, which asserts that the future of the cannabis industry lies in marijuana-infused consumer goods manufactured via advanced extraction and formulation techniques. On paper, this revolutionary notion appears spotless, however, the fact still remains that much legislation has to be achieved first. The benefits of cannabis-infused products are plentiful, despite this, such products require extremely advanced methods of extraction in order to reap the full potential cannabis plants have to offer.

The Valens Company has managed to compute five types of cannabis extraction including supercritical and subcritical CO2 extraction, ethanol extraction, hydrocarbon extraction, solventless extraction and terpene extraction. Moreover, due to the introduction of these extraction procedures, cannabis-infused products are not merely limited to creams and beauty products, on the contrary, The Valens Company has expanded its remit and is infusing a plethora of products with cannabis particles.

A particular product which becomes very prevalent in our society are edibles such as cannabis chocolates. Edibles are extremely popular especially amongst the youth for recreational functions. However, its use is not only limited to recreational uses as edibles are also used as a means to digest one’s medicine. Hence, one would be taking his medicine and enjoying a delightful snack at the same time.

Edibles mostly take the form of cookies or brownies and recently have taken the shape of marijuana gummies as well. Prominent makers of such chocolates are Kiva and Defonce who are offering a new perspective of how we view chocolate. Nonetheless, these companies still operate solely in the US and have not penetrated the European market. The Valens Company has not wasted time and expanded its reach not only to Europe but also to South America and Australia. In the EU, the latter entity has a current area of interest in almost all countries and has exclusive rights in the EU and in the UK over SoRSE Emulsion Technology.

The situation is rather similar in South America in countries such as Brazil, Columbia, Peru, and Uruguay. It goes without saying that the company has facilities in North America and is waiting to open another facility in Australia where the medical cannabis market is booming. Cannabis-infused beverages are already present in Los Angeles but have not reached mainstream popularity. Europe has the opportunity to experience a refreshing way to enjoy beverages and other products, however, in most European jurisdictions, cannabis is only legalized for medical purposes. The projections for cannabis-based drinks by 2024 are expected to be somewhere in the region of €1.13 billion.

Some countries even omit cannabis for medical uses. At the moment, there is no European consensus on whether CBD products are legal or not due to the fact that laws differ on this issue. Industrial hemp is grown abundantly in Europe for the manufacture of CBD products. Once again, these products may face some hindrances from the legal aspect. For instance, in countries such as the UK, France, Germany, Sweden and Denmark; incarceration is even possible for minor cannabis possession. Nonetheless, medicinal cannabis is legal in 33 European countries, hence the Canadian exporter may be able to introduce these products is intended for medical purposes.

Medical cannabis is legal in countries such as France, Germany, Portugal, Italy, Czech Republic, and the UK amongst others, however, apart from medicinal cannabis, possession of marijuana is illegal. It seems that only a select number of countries have opted to legalize recreational cannabis such as the Netherlands and Portugal.

In Malta, recreational cannabis is illegal, however, possession in small amounts showing the intention of personal use rather than distribution is not punishable by incarceration. Nonetheless, Malta was one of the pioneering countries in legalizing medicinal cannabis, therefore, such products would once again most likely be allowed to enter the local market if these are strictly for medical benefits.

PKF Medical Cannabis advisory division can assist with company formation & setup, AML & compliance, assistance with preparation of relevant application and submission to Malta Enterprise & application management handling through until completion, assistance with relevant application for land allocation by MIP including legal assistance with contract review/assistance with sourcing private qualifying land & application management handling through until completion, assistance with relevant application for submission to Malta Medical Council & application management handling through until completion.

Author: Jurgen Dalli – Junior Legal Associate, PKF Malta
Published on Malta Chamber of Commerce Blog:  6 August 2020
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