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Macedonia: Cannabis Cultivation and Production of Hemp Extracts

By Tuesday November 20th, 2018Announcements

Medical cannabis is an emerging industry globally and Macedonia is the only country in the region that has legalised cannabis production and the production of hemp extracts for medical purposes.

Cannabis cultivation for medical purposes is rapidly expanding and the cannabis market is exponentially growing, it is expected to triple in size in the next three years. Having received requests from diaspora investors interested in investing in this sector in Macedonia, as it is the only country in the region that has legalised cannabis cultivation and production of hemp extracts for medical purposes – we prepared this brief with information on the Macedonian cannabis industry i.e. cannabis cultivation and production of hemp products[1].

The brief firstly presents the Cannabis Legalization World Map and then provides facts about cannabis in Macedonia. This is followed by an introduction of the Macedonian companies in the cannabis sector, and a summary of the procedures for obtaining a Permit for cannabis cultivation by the Ministry of Health (MH), and a Permit for production of hemp extracts. The document concludes with presenting the legal provisions for cannabis cultivation in Macedonia.

Cannabis Legalization World Map[2]

  • Argentina – Status: CBD legalized/Partially medically legalized/Decriminalized Australia – Status: Medically legalized/Partially decriminalized
  • Canada – Status: Medically legalized//Full federal legalization pending Chile – Status: Medically legalized
  • Colombia – Status: Medically legalized/Decriminalized Croatia – Status: Medically legalized
  • Czech Republic – Status: Medically legalized
  • Germany – Status: Medically legalized/Decriminalized India – Status: Federally illegal, but legal in some states Israel – Status: Medically legalized
  • Italy – Status: Medically legalized
  • Jamaica – Status: Partially medically legalized/Decriminalized
  • Macedonia – Status: Medically legalized
  • Mexico – Status: Medically legalized/Decriminalized Philippines – Status: Medically legalized
  • Poland – Status: Partially medically legalized Turkey – Status: Medically legalized
  • United States – Status: medical use is legal in 31 states and the District of Columbia[3].
  • Uruguay – Status: Legalized

 

Cannabis in Macedonia – Facts[4]

  • Grown on 140 thousands sq. m area
  • Of the six companies that have Permits from the MH for cannabis cultivation, only one produces cannabis oil (NYSK Holding).
  • World sales of medical cannabis are over $7B, and it is estimated that the market will increase its size threefold in the next three years
  • BIRN tried to get copies of the approvals for cannabis cultivation for medical purposes (through requests for information of public character), but they got incomplete answers or they did not get any answers at all
  • Prime Minister Zoran Zaev called out “all investors who have resources to invest in this industry because it is profitable”. He stated that the country expects a lot of newly-opened positions and €100M foreign currency income

 

Existing Companies[5]

Companies that currently operate in the cannabis industry in Macedonia are the following:

  • Replek Farm DOOEL, Skopje (May, 2016)[6]
    • First producer of cannabis oil
    • €400,000 investment
  • NYSK Holding, Skopje (December, 2016)[7]
    • NYSK has planted cannabis on 1,000 sq. m. where the plants are being grown indoor.
    • The only company with a facility for cannabis oil extraction and is already producing bulk final product oil.
    • The whole investment, as estimated by Keskovski, is expected to be approximately $5.5M
  • MAM, Sveti Nikole (April, 2017)[8]
    • MAM has planted cannabis on 20,000 sq. m in greenhouses
    • The total investment is expected to exceed 10M EUR, and currently there are 30 employees from Sveti Nikole
    • Trajce Zaev, the owner of MAM, said they have ongoing negotiations with foreign investors for opening an oil-extraction capacity.
  • Oaza Alkaloidi, Stip (August, 2017)[9]
    • Owner: Slave Ivanovski
  • Kaba Herbal, Skopje (August, 2017)[10]
  • 5 Letters, Resen (September, 2017)[11]
    • 5,200 sq. m facilities for indoor cannabis cultivation
  • Medical 420, Bitola (December, 2017)[12]
  • Farma Medica Cannabis, Valandovo (May, 2018)[13]
    • Co-Founders: Katerina Bojovik Zaeva and Boban Zaev
    • Boban Zaev has big plans about making an investment, which will allegedly open 500 new positions
    • Slave Ivanovski’s (Oaza Alkaloidi) name appears amongst the owners
  • F&M, Vrapciste, Gostivar (July, 2018)[14]

 

Licensing Procedures

  1. Procedure for obtaining a Permit for cannabis cultivation.

The legal entity interested in cannabis cultivation prepares an elaborate and submits it to the MH. The MH then forms a Special Commission (Commission) comprising of representatives from the MH, the Ministry of Agriculture, Forestry and Water Economy (MAFWE), and the Agency for Medicines and Medical Devices (AMMD). Within 7 to 10 days upon receipt of the elaborate, the Commission conducts a field inspection and prepares an Opinion Report (positive or negative) which is then forwarded to the Government of the Republic of Macedonia (Government). If the Opinion Report is positive, the Government issues a Consent and forwards it to the MH. The MH then grants a Permit for cannabis cultivation. Before commencement of cannabis cultivation, the legal entity submits a Request for cannabis sowing/planting to the MAFWE which grants a Permit for sowing/planting (depending whether seeds are sowed or seedlings are planted).

  1. Procedure for obtaining a Permit for production of hemp extracts.

On the other hand, the procedure for obtaining a Permit for production of hemp extracts is much simpler: the legal entity submits a Permit Request with supporting documents to the AMMD[15], which makes a decision upon reviewing the Request. The supporting documents for obtaining the Permit are the following:

  1. List of pharmaceutically-dosed forms that will be produced
  2. Technically-Technological Elaborate – Extensive Site Master File
  3. Documents (such as undergraduate degree in pharmacology, pharmacy competency exam, job contract etc.) for the employees responsible for production, quality control and labelling of the hemp extracts for trade
  4. Proof of record of the legal entity in the Central Register of the Republic of Macedonia
  5. Permit for usage of the facility where the production of hemp extracts will take place
  6. Property list as proof of ownership of the facility, or facility lease agreement
  7. Proof of paid administrative tax and other costs associated with obtaining a Permit for Production of Hemp Extracts according to the bylaws on medicines.

Furthermore, depending on the type of production of hemp extracts, the producer needs to have the following premises available:

  1. Warehouse for receipt and storage of raw materials, with fulfilled quarantine requirements while the quality control takes place
  2. Warehouse for receipt and storage of packaging materials, with fulfilled quarantine requirements while the quality control takes place
  3. Space for production and packaging
  4. Space for temporary storage of semi-products
  5. Space for control of raw and packaging materials
  6. Control lab
  7. Warehouse for storage of products under declared keeping requirements, with fulfilled quarantine requirements while the quality control takes place
  8. Separate warehouse; secured warehouse for storage of:
  9. Raw materials  categorized  in  the  group  of  opium  drugs,  psychotropic  substances  and precursors of opium drugs
  10. Medicines that contain opium drugs and psychotropic substances
  11. Hazardous chemicals
  12. Raw materials and products that are not approved in the quality control procedure i.e. recalled items
  13. Shipping facility
  14. Office
  15. Wardrobe
  16. Sanitary facilities

The cost associated with the procedure for obtaining a Permit production of hemp extracts is 1,000 EUR. The deadline for granting a Permit for production of hemp extracts products is 90 days.

Legal Matters on Cannabis Cultivation

  1. Eligibility criteria

In the section “Cultivation of hemp intended for the production of narcotic drugs” of the Law on control of opium drugs and psychotropic substances, it is stipulated that cannabis cultivation is allowed for medical and/or scientific purposes. The cultivation of cannabis is allowed only for legal entities that possess a Permit for cannabis cultivation issued by the MH, upon prior Consent from the Government.

  1. Required conditions

The legal entity is obliged to:

  • Have adequate space, surfaces or land for  cultivation, drying, and  storage of cannabis, equipped accordingly to the production; i.e. a processing capacity of the legal entity for cannabis cultivation;
    • the space should be atmospherically protected and enclosed with at least 4-metre-high fence, with brinov element in front of the fence in three rows of buckets and a barbed wire above the fence;
  • Have a 24-hour video surveillance over the whole space;
  • Have a 24-hour presence of physical security;
  • Have at least four employees of which at least one person is a graduated pharmacist with at least three years of work experience in the field of pharmacy and at least one person is a graduated agronomist – agriculture programme with at least three years working experience in the field.

 

  1. Procedure for obtaining a Permit for sowing cannabis

The legal entity that has a Permit for cannabis cultivation issued by the MH, before the commencement of planting is obliged to submit a Request to the MAFWE for obtaining a Permit for sowing cannabis. The Request shall be supplemented by the Permit for cannabis cultivation issued by the MH (certified photocopy by a notary); a document for certified seed material; elaborate/plan for cultivation of hemp which contains information on how the plant will be cultivated, quantity (number of seeds, seedlings, stems, wet and dry weight).

A Permit for sowing cannabis is issued by the MAFWE within 15 days from the day of receipt of the complete Request. The legal entity, after receiving the Permit for sowing hemp from the MAFWE, is obliged to notify the MH, the MAFWE, the AMMD, and the Commission before beginning the sowing/planting of the hemp seed. The legal solution stipulates that during the period from sowing/planting to hemp harvest, the Commission will conduct an inspection at least twice over the cannabis cultivation.

  1. Records of cultivating, harvesting, and drying hemp

The cannabis cultivator is obliged to keep a record of the cultivated cannabis (sowing, seedling production, transplanting, and number of stems). The cannabis cultivator is obliged to register and report all changes and deviations in the cultivation of cannabis, which were previously planned in the elaborate, to the MH and the MAFWE.

The cannabis cultivator is obliged, before commencing the harvest, to inform the MH about the day of commencement of the hemp harvesting. After the completion of the hemp harvest, an inspection of the harvested items is performed by the Commission for the purpose of determining the number of collected stems and wet mass. The form, content and manner of keeping records for all stages of the cannabis cultivation shall be prescribed by the MH.

“After a harvest, the collected plant/hemp is dried in a special purpose-built orderly space, sized depending on the quantity of cultivated hemp located in the same location where the hemp is grown. The cannabis cultivator must have the dried plant/hemp packaged in a cardboard box and sealed with a safety seal. Furthermore, the cardboard box with the dried plant/hemp is obligatory marked with the following data: name and head office of the legal entity (cultivator/producer), year of production, name of raw material, net and gross dry mass, form (leaf, flower, plant, whole, chopped) and packaging date. The cannabis cultivator shall submit a Report to the MAFWE and the AMMD for the completed process of cultivation and the total dry mass which was obtained”, is defined in Article 29-f of the respective legal solution.

  1. Legal restrictions

In the respective legislation it is stipulated that the cannabis cultivated in the Republic of Macedonia can be processed only in the Republic of Macedonia exclusively by a legal entity that has a Permit for production of hemp extracts. The transfer of hemp to the processing site is carried out by the hemp producer accompanied by representatives from the Ministry of Interior, at the expense of the producer.

Export-Import

A Permit from the AMMD must be obtained prior to the import of seeds and seedlings. According to the latest amendments of the respective legislation, the legal entity is obliged to provide only a proof of origin of the seeds/seedlings that are to be imported; a quality certificate of the seeds/seedlings is not mandatory. Macedonian companies in the cannabis industry use both seeds and seedlings in their cultivation processes. Replek Farm, for example, imports a middle product – dried cannabis flower from which it produces extracts.

According to the existing legislation, only export of final products (extracts, granules, oil and similar) is permitted. The companies that cultivate cannabis in Macedonia are not allowed to export the plant and therefore freeze the flowers (fresh or dried). It is recommended that a prospective company finds placement for its plants or builds an extraction facility before commencing cannabis cultivation. Furthermore, the final products can be classified, and hence exported, as three types, depending on the THC content present in the product:

  1. Food – below 0.001% THC;
  2. Border Line Product – between 0.001% and 0.2% THC (also products from cannabis that are low in THC but contain other cannabinoids, such as CBD, belong in this group);
  3. Medicine – above 0.2% THC

The AMMD is the official body that grants a Permit for export of Border Line Products and Medicines. The export duty amounts to 1,000 MKD, regardless of the quantity exported. In the case of Medicines, the procedure is more complicated and requires greater control and documentation.

Article by Adil Mehmed, Summer Research Intern

 

[1] For clarification purposes, the term cannabis refers to the plant, whereas the term hemp denotes all over-ground fresh or dry parts of the plant.

[2] http://www.cannabisbusinesstimes.com/article/cannabis-legalization-world-map/

[3] http://www.ncsl.org/research/health/state-medical-marijuana-laws.aspx

[4] http://prizma.mk/makedonska-kanabis-revolutsija-vo-najava/

[5] https://www.novamakedonija.com.mk

[6] http://emagazin.mk/vesti/vest/22379

[7] http://www.slvesnik.com.mk/Issues/e98cbb3c65e140648d51a1a108d6bad2.pdf

[8] http://www.slvesnik.com.mk/Issues/2d30f673843b49159e15813163ffcc2a.pdf

[9] http://www.slvesnik.com.mk/Issues/df612c2cedda4ebf9e85c5469d1ed1eb.pdf

[10] Ibid.

[11] http://www.slvesnik.com.mk/Issues/b5bcde690e394ba6b1af920f95ebefb7.pdf

[12] http://www.slvesnik.com.mk/Issues/5129020c4df94e0d9e7e0e698c353d84.pdf

[13]  http://vlada.mk/sednica/70

[14] http://vlada.mk/taxonomy/term/5

[15] https://malmed.gov.mk/wp-content/uploads/2.14-Pravilnik_za_obrazecot_na_baranjeto_i_potrebnata_dokumantacija-

_za_proizvodstvo_na_ekstrakti_od_konop-Sl_vesnik-br.90-od-2016.pdf

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