Twelve countries in Europe have well-established medical marijuana programs, and about 16 countries allow specific cannabis products under certain conditions or have launched pilot medical marijuana programs.
Even though 15 countries still completely prohibit cannabis products, the continent is still ripe for growth. In November, the European Court of Justice ruled that CBD is not a narcotic, thus enabling the movement of legally manufactured CBD products within the E.U. And on Dec. 2, the United Nations Commission on Narcotic Drugs has made a final decision to remove cannabis from Schedule IV of the 1961 Single Convention on Narcotic Drugs following WHO recommendation.
Panaxia Labs (TASE: PNAX) (OTC:PXLIF) Israel’s largest medical cannabis producer, is one company that sees these developments as opportunities for growth across the E.U.
Last year, the company partnered with European pharmaceutical company Neuraxpharm to bring medical cannabis products to Germany. It also entered a contractual agreement to use a Maltese R&D facility, was chosen by the government of Cyprus to present its cannabis oils in the country, and was recently selected to take part in the cannabis pilot program in France.
Panaxia general manager Assi Rotbart shared with Benzinga the company’s expectations for both Germany and France, as well as the company’s future plans for the U.S.
BZ: What do you expect from medical cannabis sales in Germany?
A.R.: One of Panaxia’s strategic goals in recent years has been penetrating the German medical cannabis market. That is why the fact that we joined forces with Neuraxpharm last year and have met all the regulatory milestones for the commercial sale of medical cannabis in Germany, including initial sales, is a major achievement.
Today, the German medical cannabis market is the largest and fastest-growing in Europe, and the third-largest worldwide. The limited competition in the country, along with estimates that the German market, which currently has 120,000 patients and is expected to reach approximately 800,000 patients within four years, makes the market very attractive in business terms. We expect that within a few years, the German medical cannabis market will reach several billion euros.
These estimates are making the entire Israeli and global cannabis industry train their sights on Germany as a market with the largest potential profit, and which is currently based solely on imports. What’s more, it is a highly regulated market, with a strict health care system, which requires the production of medical cannabis with stringent pharmaceutical standards. As a company that is committed to the production of the highest quality medical cannabis, under the strictest possible standards, Germany is the type of market we want to be in.
How do you think the pilot will be accepted in France?
We believe that France will lead the way for other countries to embrace the use of medical cannabis in the coming years and that the French market will become one of the world’s most advanced medical cannabis markets. France has the highest reported use of cannabis in Europe.
France currently has a population of 67 million, according to published figures/estimates, there are approximately 700,000 patients who meet the criteria and can be eligible in the future for a prescription for treatment with medical cannabis.
With hundreds of patients already treated (at the end of the experiment) and doctors used to prescribe their products, we see this pilot as a great opportunity.
Between Germany, France and Cyprus, Panaxia seems to be focused on European countries. Which country has the biggest potential for developing a strong cannabis market?
Panaxia is a medical cannabis manufacturer that produces products under strict medical and scientific standards, at the highest quality and with a fixed dose of active ingredients in every type of product. We are also the only company in Israel, and among only a handful worldwide, that have EU-GMP certification, which is required for the production and commercial export of medical cannabis. Therefore, our current focus is on European markets with clear and stable regulations that know how to evaluate and enforce the highest standards in the pharmaceutical industry, including in the medical cannabis space. In business and commercial terms, we are currently focused on Germany and Poland, two countries with large populations, rapid potential growth, and strict regulation.
Any plans to reach the U.S.? And what are your goals for 2021?
We are very interested in entering the US market, and we will do so as soon as US federal law permits it. Our goals for 2021 are to establish our market segments in the European countries in which we are active (Germany, France, and Cyprus) and to expand our activity to additional European countries, where medical cannabis is legal. As a public company, we are allowed to share only information that was already made public by the TASE.
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