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Italian army’s monopoly on medical cannabis production stifles market growth, new data suggests

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While Italy is one of the oldest and largest medical cannabis markets in Europe, new data has revealed the continued inability of its system to “meet the needs of patients”.

The medical cannabis market in Italy has been growing by double-digit percentage points for a number of years, yet the country still sees its military monopolizing local agriculture.

With domestic military production failing to grow since 2019, this monopoly is stifling the growth of one of Europe’s most important medical cannabis markets, Now the second largest company in Europe According to the number of patients.

Industry and data analyst at Banning Partners Conor O’Brien told Businesscann: “The government’s monopoly on medicinal cannabis production in Italy was a complete failure.”

Lack of supply

New figures obtained from the Italian Ministry of Health by an Italian journalist Fabrizio Dentini It showed that while domestic supply grew last year from a low in 2020 of just 37kg, it still represented a small portion of total demand.

In 2021, the Italian Army grew 101,904 kg of medicinal cannabis, which is a 175% increase over the previous year, but this was a 17% decrease compared to 123 kg in 2019.

Although recovering from such a significant decline in 2020, this represented a fraction of the total medical cannabis sold in Italian pharmacies that year.

year Sold as a kg for pharmacies kg planted in Italy Sweetened %
2014 59 0 0%
2015 119 0 0%
2016 138 0 0%
2017 351 56 16%
2018 578 113 20%
2019 861 123 14%
2020 1,123 37 3%
2021 1,271 102 8%

“The numbers speak for themselves,” Dentini told Business magazine.cann.

In fact, if compared to the 1,400 kilograms estimated by the Ministry of Health as a national requirement for 2021, the military agency was only able to cover 8% of the 1,271 kilograms tangibly distributed during the same year.

“A monopoly production system de facto fails to carry out the functions for which it has been operated, and the lack of production licenses for the private market hinders the development of a healthy and competitive production chain.”

After the medical cannabis program was launched in 2007, the Italian government moved to allow its military to begin producing medical cannabis in 2015 as part of a project designed to meet the growing needs of Italian patients.

The government continues to offer all products in the country, and it is understood that only five companies have licensed to distribute medical cannabis so far.

“To counteract the apparent production deficit, the Italian state benefits from the periodic structural import of medicinal cannabis from the Netherlands (900 kg were imported in 2021),” Dentini explained.

Although limited amounts of medical cannabis are imported through Canada and, more recently, Australia, through agreements with Aurora and Little Green Pharma respectively, the limited number of licenses granted means there are significant supply gaps and persistent shortages across the country.

According to Mr Dentini, this has led to the initiation of “several emergency measures” to “una tantum Import batches of medical cannabis.

On August 24 this year, he called for another emergency batch of medical cannabis to counter the growing deficit.

The call, which has a deadline of October 5, 2022, requires 630 kg of dried cannabis, including 530 kg of high THC, 50 kg of high CBD hemp and an additional 50 kg of cannabis with a balanced titration.

“The above quantity was determined by taking the unit price per gram of €3 as a reference and setting the maximum contractual amount of supply at €1,810,000.”

Home cultivation on the horizon

“The government’s strict control over local production and import of medical cannabis means that many patients in need of relief have been unable to obtain their medicines. A shortage like this creates a circuit breaker for the industry as well. If patients and doctors suffer from one deficiency, they feel They cannot rely on the same drug that is constantly available in the future.

Ongoing supply problems make the legislation currently being considered by the Italian government even more important for the country’s medical cannabis patients, who are now believed to number more than 20,000.

in july, Businesscann mentioned The bill to decriminalize cannabis, which has been in legislative limbo with the Justice Committee since 2019, has finally reached the Chamber of Deputies, Italy’s lower house of parliament.

The bill is expected to be voted on by the parliamentary upper house sometime in September, and if passed, the law would be changed to allow any Italian adult to grow up to four cannabis plants for “personal use.”

While the bill may not effectively address the country’s supply issues with medical-grade cannabis, it is designed to prevent people in need from turning to the black market, a problem Mr. O’Brien notes continues to hamper market growth.

“A shortage like this creates a circuit breaker for the industry as well. If patients and doctors suffer from one deficiency, they feel they cannot rely on the same drug that is constantly available in the future.

This causes some patients to leave the legal space of cannabis, and return to illicit consumption or seek alternatives such as opioids. It is a major reason why the use of legal medical cannabis in the country has not grown as much as it should have over the past five years.

“The government needs to produce more, but in the near term, it also needs to open a license for imports if it is serious about meeting patients’ needs.”

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