Medical Cannabis – a new opportunity to invest in Malta

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.

Given the ever-expanding medicinal capabilities present today, Malta has followed suite pioneering countries such as Canada, and in March of 2018 has officially legalized medicinal cannabis. The Maltese government has adopted the ‘Production of Cannabis for Medicinal Use Act 2018’; an all-encompassing Act regulating which entities are eligible to distribute and grow the plant, the process through which interested parties have to go through to be able to distribute cannabis and the manner in which medical practitioners are to prescribe cannabis to their patients.

The Benefits of the Regulation and Legalisation of Medical Cannabis in Malta

  • Under the new law, patients having debilitating conditions may obtain a prescription for the use of medical cannabis from a Maltese doctor registered with Malta’s Medical Council
  • This allows Maltese citizens to participate in the legal, regulated cannabis industry.
  • The removal of penal sanctions and criminalisation of drug users in Malta.
  • Beneficial spill over benefits to the Maltese economy.

Legal requirements

The production of any products and trade in cannabis and/or any preparations intended for medicinal and/or research purposes is permitted against the required approvals, authorisations, licence and/or permits. In order to carry out any of the above-mentioned activities, it is required to:

  • Comply with the terms of Production of Cannabis for Medicinal and Research Purposes Act.
  • Acquire a letter of intent from Malta Enterprise.
  • Follow all the principles, including any international obligations resulting from an agreement to which Malta may from time to time be a party to.
  • Obey all the principles that relate to the production and quality standards of products for medicinal and/or research purposes.
  • Acquire a license from the regulatory authority.
  • Obey any other principles as shall be disseminated under the Act or any other applicable law.

A fee of €35,000 is due upon an application for a manufacturing site licence related to cannabis for medicinal purposes, and an equivalent annual fee has to be paid in line with Legal Notice 391 of 2018 – “Production of Cannabis for Medicinal and Research Purposes (Fees) Regulations, 2018”. Other fees are applicable depending on the nature of activity.

Furthermore, in line with the “General guidelines on the production of cannabis for medicinal and research purposes” issued by the Malta Medicines Authority;

  • The licence holder must engage a qualified person who is a pharmacist registered with the Maltese Pharmacy Council and is resident in Malta.
  • A licence holder must produce, store, package, and label cannabis only within the designated area.
  • Exportation of cannabis is restricted to finished products intended for medicinal use and must be in conformity with import permits issued by the competent authority of the country of final destination.
  • Licence holders must provide details on waste management, such as closed incineration or composting, or other waste disposal systems.
  • Due diligence procedures are applicable to company shareholders, ultimate beneficial owners, directors, management, qualified person(s), responsible officers and any other persons with a financial interest or persons with decision making powers of influence. Due diligence reports should be submitted with the application.
  • The perimeter of a licensed site, and particularly areas within a site where cannabis is present, must at all times be visually monitored by suitable visual recording devices and secured by an intrusion detection system.
  • Whether local or overseas, cultivation of cannabis to be subsequently manufactured in Malta must be in accordance with Good Agricultural and Collection Practices, and backed up by a documented quality system.
  • At periodic intervals, determined by the regulatory authority, the licence holder shall be requested to submit estimates of the amount of cannabis produced.
  • A licence holder must inform the regulatory authority of the number of finished product packs that shall be produced over the subsequent quarter, whether intended for the local market or export.
  • A licence holder must keep a record of the cannabis transactions to ensure traceability.

How can we help?

PKF in Malta is now offering professional support to producers by drawing up the required documents necessary in support of a formal application to Malta Enterprise. Our team of legal and business advisory experts can assist in compiling the application form, and carry out the necessary due diligence procedures.

Furthermore, PKF Malta offers the following additional services:

Audit and Assurance

  • Statutory audit
  • Mergers and acquisitions
  • Business valuation and transaction support
  • Due diligence and litigation support
  • Budgetary control

 

Tax and Business Advisory

  • Socio-economic impact assessments
  • Cost Benefit Analysis and Feasibility Assessments
  • Econometric and statistical analysis
  • EU funds assistance
  • Assistance in procurement-related matters
  • Corporate and personal tax compliance
  • Cross-border corporate and personal tax planning field audits and tax investigations support
  • International taxation
  • Trust and asset protection, estate duty reporting and planning

 

Corporate governance

  • Internal control review
  • Corporate governance review
  • Compliance manuals

 

 

Should you be interested in accessing the Maltese cannabis market, we invite you to contact us on info@pkfmalta.com or call our offices on +356 21484373.