Regulatory and Industry Update: The Medicinal Cannabis Sector
News    ·   11-11-2019
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AUTHOR: Malcolm Falzon; Alexia Valenzia

Members of our pharmaceutical and healthcare team recently attended the Medical Cannabiz World Summit held on the 4 and 5 November 2019 in Malta.  This event brought together various industry stakeholders, ranging from general practitioners and researchers to investors and innovators, all having the shared desire to deepen their understanding of cannabis’ medicinal properties and attributes, the current legislative and regulatory frameworks in place and the investment opportunities that this sector presents.

The summit provided an interesting insight into the attitudes of local, European and global regulatory authorities and industry players with respect to medicinal cannabis.  Many speakers at the event emphasised that this is an emerging industry that can be considered a progression of the pharmaceutical sector meriting, however, its own sector-specific considerations.  

Here we summarise our top three take-home points from the event:

  1. 1.    Current State of Affairs

In April 2018, Malta implemented the Production of Cannabis for Medicinal and Research Purposes Act (Chapter 578 of the Laws of Malta) (the “Act”) as well as the Production of Cannabis for Medicinal and Research Purposes (Fees) Regulations (S.L. 578.01).  These legislative instruments allow for the processing, cultivation, production and importation of cannabis for medicinal and research purposes to be carried out, subject to the provisions of the Act and the requirements of a licensing regime created for operators in any of the said business lines.  The Act and the subsidiary legislation are also supplemented by guidelines issued by the Malta Medicines Authority in this regard.  Moreover, following amendments made to the Drug Dependence (Treatment not Imprisonment) Act (Chapter 537 of the laws of Malta), which amendments permit a licensed medicinal practitioner to prescribe medicinal preparations of cannabis in certain circumstances, the provisions of the Medicines Act (Chapter 458 of the laws of Malta) as well as other relevant legislation also apply to cannabis products.  

It is understood that around 25 letters of intent (a pre-requisite in the attainment of a license under the Act) have so far been issued by Malta Enterprise.  The authorities expect the first licenses to be issued under the Act to be granted by the end of 2019, with the first exports of medicinal cannabis expected in Q1 2020.

  1. 2.    Why Malta?

Throughout the event industry stakeholders that have chosen to set up shop in Malta highlighted the main reasons for choosing the Mediterranean island state, including:

-        The accessibility and clarity of the Act:  The Act was drafted with the intention of it being an umbrella act in order for local law to be quickly adaptable to reflect the needs of patients and operators in this field.  The Act, therefore, provides a clear and facilitative foundation for other legislative instruments to be issued thereunder.  The Act also fully adheres to the Single Convention on Narcotic Drugs, 1961;

-        Transparency of licensing application process: The steps required to be taken by applicants wishing to become license holders are comprehensively set out within the Act, with further guidance provided within the guidelines published by the Malta Medicines Authority, allowing applicants to prepare themselves appropriately in their submissions, saving on time and costs.  It was further highlighted that industry stakeholders have so far enjoyed positive relationships with the relevant regulatory authorities during this process;

-        Attractive fiscal regime: Malta’s corporate tax system and related ability of shareholders to claim refunds has proven to be an attractive incentive for businesses looking to establish themselves on the island;

-        Climate: Climate is an important factor to consider in the cultivation of medicinal cannabis.  Malta’s Mediterranean climate, having very mild winters and warm to hot summers, allows the island to lend itself favourably to the successful cultivation of the plant; and

-        Location: Malta’s position in the centre of the Mediterranean Sea and highly advanced infrastructure surrounding supply chain logistics allows for an efficient transportation and re-distribution process from and to all parts of the world.  

  1. 3.    Addressing the Challenges and Looking to the Future

The main challenge that was raised during the summit revolved around the need for more research and clinical studies to be carried out so as to better understand – and explain to the public at large - the efficacy and safety of the cannabis plant and the compounds derived from it.  It is clear that currently there is a lack of robust data on the safety and efficacy of the plant and its derivatives.  Furthermore, industry players were quick to point out that although attention has been mainly focused on cannabidiol (also referred to as CBD), due consideration from a regulatory and medicinal perspective should also be given to other cannabinoid compounds such as cannabigerol or CBG.  It is hoped that, upon the granting of the first wave of licenses under the Act for the use of cannabis for research purposes, Malta will be well-placed to be a leading research base.

While it was generally acknowledged that the Maltese legislative framework surrounding medicinal cannabis is clear and transparent, industry stakeholders stressed that this is not the case for other jurisdictions, including at European Union level.  For example, one of the panel sessions talked extensively about the uncertainty surrounding the classification of cannabidiol under the Novel Foods Regulation (EU regulation 2015/2283).  The general consensus in this respect is that Europe must reach a level of harmonisation on the classification of these compounds, not only with respect to the aforementioned regulation but also to the treatment of the drug in general, in order to facilitate patient access to these compounds and to facilitate trade between operators.

This is further emphasised by the fact that it is intended for the Act to be amended so as to include medicinal cannabis for veterinary use, widening the scope of the therapeutic indications of the cannabis plant.  Moreover, further legislative instruments are expected to be implemented to cater for cannabidiol products that would not necessarily be classified as medicinal products, but would be regulated nonetheless by new legislation. 

For more information on the local medicinal cannabis regulatory framework kindly contact Malcolm Falzon at malcolm.falzon@camilleripreziosi.com or Alexia Valenzia at alexia.valenzia@camilleripreziosi.com.

 

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