Advantageous Positioning for Europe in Pharmaceutical Cannabis

Published on: 
Pharmaceutical Technology, Pharmaceutical Technology, February 2023, Volume 47, Issue 2

The European bio/pharma industry’s high regulatory standards and GMP requirements are set to position the region as a frontrunner for pharmaceutical‑grade manufacturing of cannabis-based medicines.

Across Europe, a variety of cannabis or cannabinoid-based products used in pharmacotherapy are mainly indicated for the treatment of chronic pain, nausea, and vomiting as a result of chemotherapy (1). However, up until the time of writing, there has only been one cannabinoid-based pharmaceutical product (Epidyolex/Epidiolex, Jazz Pharmaceuticals) that has been granted approval by the European Medicines Agency (EMA) under the centralized procedure—meaning it can be marketed throughout the entire European Union (EU) (1,2).

As the cannabis pharmaceutical market is expanding around the world, with some forecasters projecting a compound annual growth rate of 18.6% between 2022 and 2027 for the global market (3), Pharmaceutical Technology Europe spoke with Michael Sassano, CEO at SOMAÍ Pharmaceuticals—a next-generation biotech company—to learn more about the European market and how pharmaceutical applications will shape up in the future.

At the forefront

PTE: Could you provide an overview of the European medical cannabis market and the role of pharmaceutical applications within this sector?

Sassano (SOMAÍ Pharmaceuticals): Europe is at the forefront of medical and pharmaceutical cannabis. While the US [United States] and Canada paved the way for regional closed border recreational cannabis, Europe created a global cannabis market by regulating cannabis as a pharmaceutical API and adopting international standards of medicine EU-GMP [EU-good manufacturing practice] certification. By following the European Pharmacopoeia (Ph. Eur.), EU cannabis producers that conform to pharmaceutical GMP requirements can cross borders with cannabis so that doctors and patients can obtain a prescription for a multitude of indications like epilepsy, multiple sclerosis, and pain to name a few.

The EU market is small compared to the US market, because it started around 2017 and currently has roughly 350,000 patients in a few defined countries (4). Germany is the largest consumer market with approximately 200,000 patients, Italy the second largest market with approximately 65,000 patients, the UK [United Kingdom] with approximately 22,000 patients, Denmark with approximately 10,000 patients, the Netherlands approximately 9000 and smaller markets like Portugal, Czechia, Switzerland, to name a few. Only in the last two years has the European market started to transition from flower APIs to medicinal extracts which conform more to the medical and pharmaceutical standards. Most of the market is magistral prepared cannabis extract APIs, but advancements and normal course of development is showing the first signs of finished medicinal products.

Demand drives development

PTE: Will cannabis-based pharmaceuticals become more prominent in the future in your opinion?

Sassano (SOMAÍ Pharmaceuticals): With the advent of extracted and formulated [cannabis-based] APIs and finished products, Europe has entered the true pharmaceutical space. There are already examples of pharmaceutical products like Dronabinol, Epidiolex, and Sativex, which have undergone clinical trials commensurate to standard pharmaceutical products. But there is also the herbal medicinal market, which is a global US $150 billion (€139 billion) market (5), that cannabis has entered with plant-derived extracts. The herbal extract market will be the largest explosion in growth for EU cannabis over the next few years and long run. And there is the OTC [over the counter] market or adult use that is also being explored in Europe and is already a US $35 billion (€33 billion) global OTC/recreational cannabis market today (6). Cannabis has a place in all three pharmaceutical pillars for clinical trial products, herbal extracts, and OTC.

Demand by patients is driving the early entrepreneurs to develop the infrastructure needed to support the growing European market. The trend in Europe for cannabis is largely skewed to a safer and better way to relieve pain and has an average age of 50-years-old. Whereas mature OTC markets, like the US, have an average age of 30, and although pain is still the largest sector, people are using cannabis for many more reasons like stress, anxiety, sleep, and much more. This [variance] is primarily because there are not enough clinical trials to prove efficacy for EU doctors to prescribe for other indications. For a more robust European medical market to expand, more studies and education for doctors is needed and that will come as the number of patients looking for relief expands in Europe.

Movement is happening

PTE: Are European pharma companies already participating in the cannabis market?


Sassano (SOMAÍ Pharmaceuticals): Already in the past two years since the UN [United Nations] voted to classify cannabis as a medicine in December 2020, there have been major acquisitions by pharmaceutical companies: Jazz Pharmaceutical bought GW Pharmaceutical for US$6.7 billion (€6.2 billion) in early 2021 (7), which was followed up at the end of that year with Pfizer purchasing Arena Pharmaceutical also for US$6.7 billion (€6.2 billion) (8); Teva Pharmaceuticals entered the distribution of cannabis products (9); Dr. Reddy’s, an India based pharmaceutical company, bought German distributor Nimbus Health (10); and the large Netherlands API manufacturer DSM bought cannabis API manufacturer Brains Bioceutical (11). This [activity] is only the tip of the iceberg for pharma players, and nearly every company, whether API producers, clinical trial companies, herbal medicine producers, distributors, generics, or Big Pharma looking for complimentary therapies, are all looking to find their position [in the market].

Europe has an advantage because companies must follow more robust pharma EU-GMP regulations, while the US and Canada follow either novel foods GMP or even less robust restaurant quality regulations. To be global and to be attractive for pharma, the EU standards are a bullseye. And Europe is far ahead of the curve.

Country-wide variation

PTE: Are there any differences between European countries in terms of interest/investment into the cannabis market?

Sassano (SOMAÍ Pharmaceuticals): Each country has unique positions in Europe for cannabis. The largest consumer market, which benefits distributors of medical cannabis, is Germany. The main driver was the 2017 German health reformation, which gave doctors the freedom to choose cannabis as a therapy for their patients (12). [In 2022], Switzerland followed the same path as Germany and doesn’t require doctors to get federal approval before prescribing cannabis. The UK requires doctors to have tried at least three other therapies before prescribing cannabis, which greatly hinders adoption. And even more restrictive are countries like Denmark and Ireland, which limit use to major ailments only, epilepsy, multiple sclerosis, and stage III cancer-related issues. Without pain and other less serious indications, cannabis cannot get widespread adoption as the pool of eligible patients is very limited.

Other countries like Portugal have become the EU leader in cultivation and manufacturing cannabis flower and extracts. The Portuguese regulatory environment treats cannabis in line with Ph. Eur. on herbal APIs and extracts and allows for the market authorization of cannabis finished extracts. Couple that with a highly educated population and most reasonable wage structure for western Europe, Portugal will be the leader of cannabis exports for the foreseeable future with already 21 licensed facilities and home to the biggest cannabis companies like Tilray. Small countries like Malta and Luxenberg have embraced the more social aspect of OTC adult use but it’s small and hasn’t really started.

PTE: Might certain countries be at risk of being left behind in the pharmaceutical cannabis market?

Sassano (SOMAÍ Pharmaceuticals): Many major European countries are addressing the issue of how to regulate cannabis use in their country. Spain was expected to come out with comprehensive regulation like Germany by Q4 2022 but has yet to do so. France has been running a pilot programme and is very eager to adopt rules once they see Germany and Spain movements for 2023. Greece, although initially being an early pioneer for producing cannabis, has opened their first facility recently and still has hopes to compete as a producer like Portugal, albeit they are far behind and [it] doesn’t look very promising given poor regulation adoption. Additionally, Greece is in transition from government-controlled distribution to pharma distribution. Italy has been actively changing the rules for bigger adoption and is also going away from government-controlled distribution and focusing to pharmaceutical standard distribution.

As more and more countries adopt pharmaceutical standard manufacturing and distribution, and the sooner they allow for doctors to be educated and help their patient, the larger the EU cannabis markets gets. [The year] 2023 will prove to be the most expansive and news-filled year for such developments as the largest countries pave the way for rules that smaller countries can adopt.

Big regulatory shift

PTE: What regulatory hurdles must pharma companies consider for the cannabis market?

Sassano (SOMAÍ Pharmaceuticals): There is a big shift right now from magistral preparation compounding at pharmacies to finished cannabis medicines with market authorization. Initially, cannabis products were treated as an API that pharmacies would then purchase and compound to give to patients. This was clearly a path pushed by pharmacists so they could charge a higher margin than finished products. It was also the quickest path for regulators to certify APIs that could get to patients quicker than the longer road of registered medicines.

Since the advent of extracts and formulated products, the shift is towards these products because they are more cost effective for the patients and they are produced and regulated at a much higher quality standard than pharmacy-made products. That transition is occurring as countries like Portugal have adopted the standard EU herbal pharmacopoeia to manufacture extracts and allow for finished form dosages like gel caps, sprays, drops, and other pharmaceutical standard delivery devices. The consumer will benefit greatly because there are fixed increases that pharmacies and distributers can charge for medicines. Volumes will increase to offset any lost margin. But we aren’t there yet; countries like Germany and Italy, the two largest markets, are magistral.

A global powerhouse

PTE: What should industry expect for the future?

Sassano (SOMAÍ Pharmaceuticals): Europe will no doubt be the second largest cannabis market in the world next to the US. But the high standards of pharma EU-GMP will make Europe the only global powerhouse far surpassing the US for pharmaceutical manufacturing. Standardization and a large population to serve will be a hotbed of pharmaceutical transactions over the next coming years and the future while countries [whose regulatory standards for cannabis‑based products are akin to those for] novel foods like Canada and even lower restaurant standards for the US will not participate significantly in the global medical markets.


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2. EMA. Epidyolex. (accessed 18 Jan. 2023).
3. Research and Markets. Global Cannabis Pharmaceuticals Market (2022–2027) by Brand, Product Type, Distribution Channel, Application, and Geography, Competitive Analysis and the Impact of COVID-19 with Ansoff Analysis. Report, September 2022.
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6. BDSA. BDSA Reports Global Cannabis Sales to Jump 22% in 2022; Forecasts $61 Billion by 2026. Press Release, 2 March 2022.
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8. Pfizer. Pfizer Completes Acquisition of Arena Pharmaceuticals. Press Release, 11 March 2022.
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10. Dr. Reddy’s. Dr. Reddy’s Laboratories Enters into Definitive Agreement to Acquire German Medical Cannabis Firm Nimbus Health GmbH. Press Release, 3 Feb. 2022.
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12. Gunelius, S. Inside the European Cannabis Industry. Cannabiz Media, 20 Dec. 2019.

About the author

Felicity Thomas is the European/senior editor for Pharmaceutical Technology Group.

Article details

Pharmaceutical Technology Europe
Vol. 35, No. 2
February 2023
Pages: 28–30


When referring to this article, please cite it as Thomas, F. Advantageous Positioning for Europe in Pharmaceutical Cannabis. Pharmaceutical Technology Europe, 2023, 35 (2), 28–30.