HIGH CONSUMPTION AND FAVOURABLE LEGISLATION BOOST ITALY’S CANNABIS MARKET

Last year, we discussed Italy’s progressive approach to cannabis legislation and investigated how the Military Chemical and Pharmaceutical Plant (SCFM) became the sole producer and distributor of medical cannabis.

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As of September 2018, the system is struggling to meet patient demand. In 2017, 300 patients applied for medical cannabis but, a year later, nearly 10,000 patients are actively seeking medical cannabis prescriptions for a range of qualifying conditions including:

  • MS

  • Glaucoma

  • Chronic pain

  • Tourette’s Syndrome

  • Nausea

  • Spinal cord injury

  • Anorexia

  • Cachexia

To address this, the Italian government have demonstrated a willingness to relinquish the army’s monopoly on domestic cannabis production, issuing seven medical cannabis import licences. Most of these licences are being controlled by Canadian joint ventures. For instance, Toronto-based Nuuvera has acquired Genoa-based FL-Group, which holds one of these licences and Pedanios, the German subsidiary of Aurora Cannabis, has won an exclusive tender to supply 100 kg of medical cannabis to the Italian government.


Growing Through Turmoil

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Italy has had a turbulent relationship with cannabis over the past few decades.

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Despite Berlusconi’s attempts to reclassify cannabis as a ‘hard’ drug, Italian drug policy has progressed, allowing medical cannabis prescriptions in 2013. Unfortunately, the lack of a formal system had halted growth until 2017 when a critical mass of patients began to access the drug.

In order to access medical cannabis, Italian patients must obtain both a doctor’s prescription and ministerial approval for products containing THC, although a formal medical cannabis access scheme is in the process of being established in the medium term. In some regions of the country, cannabis treatments can be covered by the national insurance but in some cases, patients have to pay in full. As the access scheme develops, patient numbers are expected to increase significantly and with the government looking to import supplies to meet rising demand, international market players, such as Aurora and Pedanios, are capitalising on the emerging Italian market.


A Budding CBD Industry

Italy’s CBD industry has experienced a substantial upturn. A reform implemented last year has boosted Italy’s fledgeling hemp industry, with an 80% increase in acreage of cultivated land. The new legislation has resulted in the removal of substantial red tape from hemp production. Any farmer can now grow legal cannabis containing a level of THC (0.6%) greater than any other European country (with the exception of Switzerland, which allows cultivation of hemp with THC content up to 1%).

The commercial potential for Italian cannabis can be derived from the current success of Easy Joint, a ‘cannabis light’ brand that contains a small amount of THC (less than 0.6%) that can be sold legally in Italy. In the first 8 months of operations, May 2017 to February 2018, the group had sold 17,000 kilograms of CBD flowers.

In Italy, nearly 1 in 5 young adults have consumed cannabis in the last 12 months. High consumption levels have contributed to a high value estimation for the recreational market in Italy, and, as we have witnessed in several US states, high consumption levels are indicative of a propensity to legalise adult use. California, Colorado and Washington legalised recreational cannabis partly in response to the high consumption levels and popularity of cannabis among its populations. With Italy showing similar trends and usage, they are likely contenders to legalise recreational cannabis within the next three years.

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To understand the Italian market further, we spoke to Marco Perduca, the International Programme Coordinator at the Luca Coscioni Association, a non-profit which furthers civil liberties and human rights through encouraging scientific research.

The centre-right coalition, which received the most votes, does not support drug policy reform, while the populist Five Stars Movement, which is the biggest party in parliament right now, has called for the legal regulation of cannabis for all purposes, but did not give any priority to the matter during their electoral campaign. The centre-left coalition, primarily represented in the parliament by the Democratic Party, which has been the senior party in the governing coalition for the last five years, is mildly in favour of reforming drug laws but still has mixed views on the issue.

The election results will only allow a government that is either supported by a mixed coalition of those that secured the most votes in the elections, or a government of technocrats with the external support of all political parties. In either case, the regulation of cannabis will not be a popular policy in any successful coalition. The timing of the formation of the government, as well as its duration, remain unclear. In November 2016, a citizens’ initiative calling for the legal regulation of cannabis was presented to the parliament with the support of 68,000 signatures. The draft was not discussed by the parliament, but it will qualify for discussion in the coming term.

Italy re-legalised industrial hemp in December 2016 after some 40 years of prohibition. That change in the law has allowed the opening of over 400 hemp shows around the country. There remain numerous bureaucratic problems, but judging from the speed at which shops have been opened, the fact that cannabis light products sold out on the day of their launch, and keeping in mind that Italy has some 4 million cannabis users, the development of a strong industry is plausible.