Does The European Parliament Vote On Medical Cannabis Mean Anything?
March 20th, 2019
It is easy to be cynical about the impact of international bodies on things like cannabis reform. First of all, such decisions are never fast – certainly not when shaking off policies that have been part of the lexicon since such organizations were founded. In the case of both the UN and the European Parliament, cannabis prohibition was in force when both were formed. Undoing such pollicies, therefore, was never going to be easy.
That said, it is also significant that right after the World Heath Organization recommended that at least CBD be descheduled and THC be rescheduled, even if only in processed form, the European Parliament also passed a non-binding resolutionon sorting out cannabis policies in its own backyard.
Specifically, the European Parliament passed the resolution to incentivize European nations to agree on a unified, bloc-wide cannabis policy. The EP specifically calls for a legal definition of “medical cannabis” – and further to draw distinctions between specific medicines approved by regulatory bodies and other uses (including recreational and industrial). The commission also calls on member states to do more research, “stimulate innovation with regard to projects related to the use of cannabis for medicinal purposes” and to set standards for the same.
On the patient front, the EP wants member states ensure that patients have access to the full spectrum plant (or at least medicines based on the same) and that individual patient needs are considered.
On the consumer and business front, the EP also urges member states to consider tactics, including directing taxation from medical sales into funding such programs, to limit the impact of the black market.
What does all of this really mean?
Implications On Patients
The only “incentives” on the table, in essence, are to essentially greenlight the establishment of federally sanctified, cultivation, dispensation, authorization and payment mechanisms and gather taxes from the same to fund all the research and doctor education also clearly needed and called for.
However small a step this might sound to outsiders, this is in fact, the final figleaf that the German authorities appear to have been waiting for before going into a spring where it is widely expected to finally allow domestic cultivation.
Beyond that, creating a tax base for the medical market seems like a decent step, but in reality one that will not be able to fund the additional requirements. Why not? The dreams of selling high margin, highly branded cannaproducts to European public insurers (and the governments who regulate them) should stay on North American shores.
The entire discussion of cost and price is also about to come home to roost in Germany where the government is setting competing producers in the bid to undercut each others prices in the proposals and penalizing those who do not.
Tax revenue, in other words, from the strictly medical market will not fund doctor education and trials, in other words, and will either have to be privately funded, or funded by private and public partnerships.
The “fund it from tax revenue” idea that seems to have been lifted from the US, in particular, will not be the same animal, no matter how many Parliamentary resolutions wish it to be the case.
What “support for innovation” means is also unclear – but could easily encompass digital health initiatives across Europe.
So in sum, while it certainly could be “worse” it could also have been better too. This is going to be a step-by-step battle, and will not be “over” any time “soon.”
What Does This Mean For Investors?
There are also several noted things that this report does not say.
The first is that the European Parliament is not specific about flower versus processed products, although it certainly does seem to lean in the processed product direction. That said, the call for whole plant medication is a step in the right direction as are statements about personalized medicine access for patients who are also often comorbid. That seems to leave the door open for European countries (including Germany) who currently allow patients access to flower.
This means, in other words, that there will be an expanding, medical only market in Europe for the time being if not foreseeable future (five years).
The second issue is that the resolution also sidesteps the already looming regulatory differences between the cannabinoids already in the room. This means that anyone selling CBD in any European country should also see that the cards are on the table in terms of licensing (even if for bound for the lifestyle or even cosmetic market). Europe wide resolution on the same is also at least another two years off. In the meantime, countries are setting their own policies – which these days include banning unregulated sales of even CBD.
This means in other words, that any CBD play will be strictly regional until at least 2021.
Overall, in other words, while clearly good news about the intent long term of the European Union, there are a few key takeaways that suggest a highly targeted and cautious approach.
1. Look for medical production and processing plays with medical distribution in place. This means registration for a number of highly expensive procedures where outside investor money might well be welcomed.
2. Focus on the THC space. Why? Because legitimate investments and producers will need medical registration numbers for products that can then be sold Europe wide. This, rather than the CBD space, is easier to document and understand, particularly for non natives and foreign language speakers.
3. Look for other initiatives, including in technology, which look to streamline acceptance of medical cannabis into the very conservative medical and insurance industries. These are in their infancy in Europe, but beginning to show up.
4. Hire a consultant to give you the basic lay of the land before you start. Creativity is a necessary part of getting into the market, but some “creative” plays are doomed for a holding pattern if they are too far ahead of the rules. Holland, in other words, is not Austria, and there is a world of difference in “opportunities” in both countries right now. Those, particularly because of the relatively slow process of regional reform at the EU level, will continue to be all over the map for at least the next several years to come.
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