Cannabis for beauty and medical markets

Cannabis was first introduced to the Maltese Islands by the Phoenicians in the first millennium BC.

The plant was used extensively by the Knights of Malta during the Crusades. In the 18th century, Malta was a major producer of hemp. In the early 21st century, the Maltese government decriminalised the possession of small amounts of cannabis for personal use.

Cannabis has undergone a normalising process given its wide adoption, social tolerance and generally speaking a broader cultural acceptance; going from being branded as a gateway drug to being used as a therapeutic alternative to conventional medicine. The legalisation for medical cannabis represents a golden opportunity for licensed producers seeking to position themselves at the forefront of this emerging landscape.

In fact, the legal cannabis industry is attracting more and more investors who want to diversify their portfolios since this industry is considered one of the most promising industries. For example, the cannabis producing industry in Canada was worth $3bn in 2017. Many countries are now realising the potential of this growing industry and have moved to legalise cannabis for medical use. Uruguay was the first country in the world to legalise cannabis, followed by Canada in 2018 and eight US states have authorised recreational cannabis.

Looking at the European context, cannabis production has been decriminalised in countries such as Spain, Germany, Belgium, the Netherlands, Italy, Switzerland, Malta, Portugal and the Czech Republic. Given the everexpanding medicinal capabilities of cannabis, Malta has followed suite pioneering countries such as Canada, and in March 2018 it officially legalised the production and use of medicinal cannabis.

The Maltese Parliament has approved the Production of Cannabis for Medicinal Use Act,

“Stigmatisation of the use of this drug is a strong deterrent for many healthcare providers and uncertainty will slow down the use of medicinal cannabis.”

which is an all-encompassing act regulating which entities are eligible to distribute and produce cannabis under strict supervision. The new law also allows all registered doctors to prescribe medical cannabis to patients, which can be acquired in local pharmacies. In order to produce cannabis, entities must first obtain a letter of intent from Malta Enterprise and also a license from the regulatory authority.

Local media reports state that out of the 46 applications received, 20 entities have been issued with a letter of intent for the production of medical cannabis.

This new sector was the brainchild of ex-Prime Minister Joseph Muscat. He stated that the approved projects are expected to create local capital expenditures of more than €110m and 700 full-time jobs. Many agree that such legislation gives Malta an edge over other countries, as some countries still do not allow for the production and supply of medical cannabis.

For example, the use of medical cannabis is allowed in Germany, yet it is still in the first stage of granting its first licences. On the other hand, Malta Enterprise has already approved an area measuring 4,000 sq.m. for cannabis cultivation. Security systems must be in order to prevent unauthorised movement of cannabis material and only authorised personnel may be allowed to access specific designated areas. Waste material must not be treated with negligence and has to be stored in a lockable container.

The production and use of medicinal cannabis may provide a newfound relief to people afflicted by illnesses, yet it also introduces a vast array of economic opportunities and positive spill over effects. Naturally, cultivation requires a sizeable number of professional staff to allow a smooth and orderly process. An increase in the number of companies operating from Malta to cultivate cannabis transpires into additional tax revenue for the government, besides increasing the amount of research and development.

Cannabis production is also expected to increase the number of exports, resulting in an injection of funds into our local economy. All of these factors are expected to contribute to a continued increase to our country’s economic growth.

This is particularly important as the latest forecast issued by the European Commission indicates that while the growth momentum for the Maltese economy is expected to remain solid, GDP growth is forecasted to moderate in 2023/4 after registering a deficit measuring 5.7% of GDP in 2022. However, the net impact on the number of jobs created and output created by this emerging sector needs to be delved deeper over the coming years.

Another social aspect remains in place: the issue concerning the lack of information on the use of medicinal cannabis. Patients often comment on the limited knowledge by medical practitioners, particularly as medical practitioners are sometimes reluctant to prescribe cannabis as a form of treatment.

Apart from this, the price for medicinal cannabis is quite costly for patients. Some patients have shown their dismay after discovering that some variants costs as much as €17 a gram, giving rise to a number of concerns regarding the affordability of this medicine by the general public. While progress by the government has been made in this arena, the affordability issues of this effective medicine by the general public must not be discounted. It is worth exploring the possibility of offering this medicine to patients at a subsidised price.

Furthermore, one cannot separate the use of cannabis from its long history as an illegal substance, which is very often abused of. Stigmatisation of the use of this drug is a strong deterrent for many healthcare providers and uncertainty will slow down the use of medicinal cannabis. Indeed, the perception of the public needs to be educated, with perhaps the introduction of frank discussions about the use of cannabis.

In addition, continuous educational programmes for medical practitioners are also a must, in order to remove the general stigma concerning its use. The opportunities for using cannabis go beyond medical reasons. The beauty industry is also jumping on the bandwagon and at the moment Cannabidiol (CBD) is one of the most buzzed words one will find in the beauty spectrum. In fact, CBD oil is being used in a number of high-end creams, oils and even make-up products.

Given this potential, the cultivation of cannabis in Malta provides an added opportunity for local production to also produce this kind of oil for use by the beauty industry, thus enhancing the range of exports generated by the same industry.

One argues that the drive to attract foreign investors in this sector is not thwarted by an adverse reaction by local banks which so far have shown a lukewarm approach to onboard applications from licensed producers of cannabis.