Joining The Marketplace

The Danish Parliament recently announced plans to begin a four year trial of medical cannabis beginning on the 1st January 2018. The decision has been a long time coming and is the result of an initial proposal made by the coalition government back in 2014.

There is only a limited number of licences available, so the race is now on for companies to submit their proposals ahead of the 31st December cut off. We have taken a look at the licensing process and how Denmark has built on a framework that is already in place for the medical cannabis industry here in Europe.

Denmark’s medicines authority, Lægemiddelstyrelsen, released the details of the application process following the announcement. All licences will effectively fall under one of two categories:

  1. Permission to facilitate and grow cannabis domestically   
  2. Permission to import cannabis and cannabis-based products into Denmark

Applicants must reference whether they intend to be involved in Growing, Processing or Distribution.

Licences are open to both domestic and international companies - however, all entries must be submitted in Danish. This is a similar approach adopted by Germany earlier this year - although in Denmark this requirement is geared towards bolstering local enterprise.

We can expect to see a number of Canadian / Danish strategic partnerships. In fact, Canadian cannabis powerhouse, Canopy Growth, has already attempted to carve out a position in the Danish market with its recent strategic partnership with Danish Cannabis ApS. This culminated in the formation of Spektrum Denmark - one of the world’s largest cannabis companies teaming up with one of the largest hemp producers in Europe.

 Anne Sophie & Stig Gamborg of Danish Cannabis ApS partner, Moellerup Estate -  Photo Credit

Anne Sophie & Stig Gamborg of Danish Cannabis ApS partner, Moellerup Estate - Photo Credit

Gaining an early foothold in nascent markets, as the global cannabis industry expands, is fast becoming the lead strategic driver for Canopy. They have already employed the same technique in their partnerships with Spektrum Cannabis GmbH in Germany and Spektrum Chile SpA. Bruce Linton, CEO of Canopy Growth has stated that it is their approach to establish the “brands, infrastructure and people in a systematic manner to ensure success across numerous federally legal geographies”.

Although this move from Canopy is by no means a monopolisation of the Danish market, domestic companies will need to act with similar rapidity to ensure they capitalise on an industry that although in its early stages already has an exceptional track record across the globe. We are aware of 13 Danish companies that have already applied for permission from the Lægemiddelstyrelsen.

The European Model

With Danish physician and patient education on medical cannabis limited, doctors have already expressed an unwillingness to prescribe cannabis-based medicines. International companies and organisations like the ECTA who bring a wealth of experience and data will be vital if the Danish medical cannabis trial is to be a success. Canopy’s experience in similar fledgeling markets has highlighted the way forward in shifting these perceptions.

The Netherlands has become a major influence when outlining the production and cultivation standards required for the Danish market. In a series of questions raised by the Danish Environment & Food Committee, Ellen Trane Nørby (the Danish minister of health) repeatedly referenced the current Dutch model. Specifically, the high standards of cultivation and production that Dutch companies must live up to qualify for a licence.

 The Folketing (Danish Parliament) -  Photo Credit

The Folketing (Danish Parliament) - Photo Credit

In addition, the tide of legislative change that is currently gaining traction throughout Europe has ensured that there is already a framework in place for countries looking to implement their own cannabis reform. The European Medicines Agency’s ‘Guidelines On Good Agricultural And Collection Practice’ (GACP) and the European Commission’s ‘Good Manufacturing Practice’ (GMP) guidelines describes specifics for the growth, manufacturing and processing of cannabis and cannabis-based products. This level of detail eliminates any legal grey areas and provides a far simpler route to starting a medical cannabis industry than has previously been available. Theoretically, it has made the process much more streamlined for Denmark than for its predecessors.

Economic Opportunity

Initially, the introduction of a medical cannabis market seemed as though it would be extremely beneficial for Denmark’s 27 small islands (many of which have been suffering economically for several years). In March 2017, Alternativet MP Nicolaj Amstrup told DR Fyn that a legal medical cannabis industry “would be smart” and could potentially present “a new agricultural opportunity” to the islands. However, due to the strict nature of the application process, existing local agriculture seems destined to miss out on the new marketplace, as only cannabis-specific facilities can qualify for consideration.  

 Bornholm is one of Denmark's several farming Islands -  Photo Credit

Bornholm is one of Denmark's several farming Islands - Photo Credit

Initially, medical cannabis will be introduced into the Danish economy merely on a trial basis. However, it is believed that the ultimate decision on whether to make this industry a permanent fixture will be made some time before the trial’s end in 2021. If the successes of the Canadian and German markets are any indication, it is highly likely that we will see Denmark quickly become another nation that reaps the economic benefits of Europe’s fastest growing industry.