February 2024 - Deep Dive

Italy's Medical Cannabis landscape

Since prehistoric times?Cannabis sativa has been available for, and known by, humans in Eurasia who domesticated the plant selecting for different and specific traits ultimately using it?as a source of fibre and drugs amongst others (Plant Science, 2020). Cannabis is thought to have been introduced in Italy between the tenth and eighth century BCE. The plant was readily cultivated well into the 20th century particularly in the textile industry. Italy was amongst the biggest producers of Cannabis?worldwide and recognised for its high quality. Beyond its textile applications it?was used in the production of paper, soap and fertiliser hence utilising the entire plant (Università degli studi di Padova, 2020). As of the mid-70s, 0.3% THC content became the arbitrary legislative threshold used to differentiate between the two main selections of Cannabis growing globally without contemplating its genetic composition or the intended use of the crop (Plant Science, 2020).

Some time between the second century BCE and the second century CE the medicinal uses of this plant were first recorded and recommended in the treatment of 'female disorders, gout, rheumatism, malaria, constipation and mental weakness' (Università degli studi di Padova, 2020). Cannabis is still used for medicinal purposes in Italy for example in the treatment of symptoms associated with multiple sclerosis, AIDS, chemotherapy, glaucoma, Gilles and Tourettes syndromes.?

However, the situation is not too straight forward.

The only place in Italy where medical Cannabis can be grown legally is at a military facility in Florence. While production is growing the Italian army's efforts to?produce large amounts of top grade own-brand medical Cannabis may not be enough to satisfy the country's?booming, and legal, medical market (The Times, 2024). Currently, Italy relies on imports due to limited domestic cultivation, but there's an opportunity for growth through legalisation and domestic production (Forbes, 2022).

Drugs containing active pharmaceutical ingredients (APIs) extracted from Cannabis may only be obtained upon medical prescription and are reimbursed only if said prescription originates from doctors operating in the public healthcare system. Pharmacies are the main distributors (and manufacturers really) of these APIs: Cannabis medications are only available as Galenic preparations. These are more expensive and time-consuming.

The Italian medical Cannabis market?2020 was?estimated at approximately $494m in 2020 and is expected to surpass $1.1b by 2030 (Statista, 2024). More broadly the European medical Cannabis market?is poised for robust growth. The latest market insights project the market will reach $9b by 2028 from the $3b registered in 2022. The expansion is characterised by a CAGR?of 19.0% over the forecasted period. Acceptance/legalisation and market growth tend to function synergistically helping each other grow. As countries such as Germany, France and the UK further recognise and embrace Cannabis' pharmaceutical applications the more regulatory adjustments are likely to occur ultimately improving?patient access?(Research and Markets, 2024).

The medicinal?Cannabis market in Italy has clear potential for growth and evolution?(and therefore investment) due to the high demand and low/inefficient supply. Materia Medica Processing?is working on providing?better and more cost-effective?solutions?ultimately positively impacting patient access to this class of APIs. Follow the link in the comments section to access this venture's dataroom on the Kobo Funds decentralised investment banking platform.