Germany imported 2025 tons of medical cannabis. Part of that volume came from a Portuguese processor whose license had been revoked, which was unloaded below cost as it was reinstated. The episode sparked attention, and consequences followed. PTMC’s Joao Duarte believes that most of these conclusions are wrong. “Eight tons is not even 5% of what Germany consumes per year,” he says. “For that to result in price dumping, the math just doesn’t work.”
Structural price pressure
According to him, the price pressure in Portugal is mainly structural. “The more countries that get into production and start exporting, the lower the prices will be. Today, Colombia is exporting, Costa Rica is exporting, and Brazil, with the scale it can bring to outside cultivation, is not far behind. Canada has been the main volume supplier to markets in Germany, Australia, Israel and the UK due to the strength of low-priced flowers from European producers. Again, and fast.” It draws a direct line with what happened in the CBD market in previous years, when prices were compressed as supply expanded and operators without cost or quality advantages found themselves without a market. Medical flower THC, he says, is following the same logic over a longer timeline.
To lift the burden of this price pressure, the answer obviously lies in the right regulations and policies. These should be based on the principles of providing high quality medicines to patients. To achieve this, the flowers must reach the consumers shortly after they are picked. As simple as it sounds, proximity is Portugal’s real advantage. “The fresher the flower is when it reaches the patient, the better the quality,” he says. “Only proximity gives that.”
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A turning point
As for the regulatory issue, Joao points to Portugal’s eight-year history of medical cannabis as a distinguishing feature, following last year’s police raids. Organizations that have long been involved in the licensing and enforcement framework have developed standards and experience in applying them. “Our GMP standards are real,” he says. “They are not a number on a certificate.”
The damage to the reputation of these raids, in his opinion, is exaggerated. “There is always a scandal in the industry,” he said. “That doesn’t necessarily mean it’s over, that a country’s economic sector has been kicked out. Canada, the largest exporter of cannabis, is the clearest example of that. Everyone remembers the CannTrust scandal in 2019, which made international headlines. That didn’t kill the Canadian industry until it became them, the regulatory system moved in their work. It looks like.”
EU-GMP clearance
One important area is EU GMP clearance, the practice of converting imported flowers through a European facility to obtain certification that the original material would not otherwise carry. “We would have more value growing the flowers than doing the conversion,” he says. For Portuguese producers, the practice reduces the premium that EU GMP certification must entail and makes it more difficult to distinguish domestically grown product from processed imports at the point of sale.
To each his own
Joao does not believe that other European countries can take Portugal’s place in the old continent’s cannabis industry. “This is simply because it’s not one thing for a country to be active in one sector and then push out another. It’s an open market, everyone participates at different levels.” As a neighbor, Joao cites Spain as an example. The country currently has less than ten licensed producers and has yet to build the export infrastructure or regulatory track required by the markets. “I don’t see Spain coming and taking over,” he says. “Both Spain and Portugal will take market share. Operators with established contracts will continue to move product. After that, it’s about quality and price.”
Denmark, he says, is an immediate competitive variable, producing significant quantities and moving into European markets with momentum. Portugal is currently among the top three to five exporters to Germany and has established positions in Australia, Israel and the United Kingdom. “This reflects accumulated capacity rather than regulatory time, and it’s not something that goes away because a processor loses its license,” he says.
A common European pricing policy, along the lines of the state-controlled model in France, is a mechanism that the industry should collectively push for. Without this, individual producers are left to absorb the cost pressures of suppliers operating on a scale that European policy has no current framework for. “We should aim to have good flowers,” he says. “We must not aim to demolish Portugal.”
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