In the rushing movement from the medical cannabis legalization trend across Europe, the Republic of Malta is beginning to carve out a place for itself in the budding industry.

With a population of about half a million people and a national GDP of 12.3 billion euros, the small island nation has been working to attract international interest to bolster its developing cannabis market.

Malta is one of a growing number of countries in Europe trying to grab a portion of the global marijuana space. The nation is promising it will be at the forefront of cannabis in Europe and across the world.

Here the Investing News Network (INN) takes a look at the investment opportunities in Malta and the role it could play in the European and international cannabis spaces.

Medical cannabis legalization and regulation in Malta

Malta legalized cannabis in March 2018 following the decriminalization of the drug in 2015. Deo Debattista, a member of Malta’s House of Representatives, tweeted that the country’s government moved to legalize the drug after observing its medical benefits.

With the amendments to The Drug Dependence Act, the cultivation and production of medical cannabis became officially legal and doctors in the country gained the ability to prescribe non-smoking forms of medical cannabis to patients.

The Maltese government also established the Production of Cannabis for Medicinal and Research Purposes Act in 2018, which is the legislation permitting the production of medical marijuana for use and research.

As of September, Malta Enterprises, the country’s economic development agency, has approved 20 medical cannabis projects.

In an interview with Business Malta, Malta Enterprises said its continued interactions with medical cannabis companies has been crucial to the growth of the sector. The agency also noted Malta’s impressive existing medical sector was a driver for international investment into the Maltese cannabis industry.

“From the already established pharmaceutical and life sciences sector and the attractiveness of medical cannabis industry in Malta, it is clear that Malta is seen by many companies as a potential central hub from where to supply Europe and elsewhere with very high-quality pharmaceutical products,” Malta Enterprises told Business Malta.

At a Cannabis Europa event in September, Malta Prime Minister Joseph Muscat told investors that all the projects approved so far would represent an investment of 110 million euros.

The projected growth of the Malta medical cannabis market

For its part, Malta is confident in taking on a considerable share of the market in medical cannabis exports.

During a visit to Canada and the US, Muscat said the country plans to ship out C$1.5 billion of medical cannabis products within the next three years. Muscat told Television Malta exports from the country are slated to start in the first quarter of 2020.

“We are estimating that exports by year 3 of these companies will reach more than one billion euro and that 900 jobs will be made available,” the nation’s leader said, adding that he expects to attract more players to his market as it begins to grow.

How to invest in the Malta medical cannabis market

The medical sector for the drug in Europe is projected to be big business.

A report from cannabis research firm Prohibition Partners said Europe’s medical cannabis industry could bring in 55.2 billion euros by 2028.

Some cannabis firms are looking to leverage Malta’s proximity to Europe as an entry point into the larger cannabis marketplace.

In fact, one medical cannabis firm, the privately held Materia Ventures, is betting its hand on the growth of the continent’s medical cannabis sector.

At an investor event earlier this year, Materia Ventures CEO Deepak Anand said his firm plans on using Malta as a jumping-off point for their Europe operations, citing its strong pharmaceutical industry and its flexible regulatory environment as benefits for the investment.

“Malta’s had a very welcoming and open regulatory policy on a number of different things; cannabis is one of them,” Anand told INN in an interview. “The country has been very, very open to setting regulations for products where regulations don’t exist.”

Anand told INN that as a member of the European Union (EU), Malta is beholden to EU Good Manufacturing Practice (EU-GMP) requirements that strictly regulate medicines within the union.

This standard ensures the production of medical products is of the highest quality, Anand continued.

The first phase of Materia’s Malta operations, which will be focused on the production and cultivation of dried cannabis, will go online during the first half of next year, Anand told INN. The second phase focuses on extraction and product creation and is set to be completed by the second half of 2020.

Materia is joining the likes of Canadian cannabis firm Aurora Cannabis (TSX:ACB), which was approved for the country’s first cannabis cultivation facility under its subsidiary, Aurora Malta, in 2018. The subsidiary was built in collaboration with Cherubino, a leader in pharmaceutical wholesale in Malta, with Aurora as the majority shareholder in the joint venture.

MGC Pharmaceuticals (ASX:MXC) is planting roots into the Mediterranean country as well, with an 11 million euro investment into a medical cannabis facility in the Ħal Far industrial estate.

The state-of-the-art facility will be used to create medicinal cannabis products and will serve as a gateway into European and international markets.

There’s also MPX International (MPXI) (CSE:MPXI,OTC Pink:MPXOF), which, after selling its US assets to iAnthus Capital Holdings (CSE:IAN,OTCQX:ITHUF), told investors it would focus on international ventures.

In August, the company confirmed the closing of its acquisition of Alphafarma Operations’ outstanding shares through its Maltese company, MPXI Malta Property.

As a part of the deal, Alphafarma transferred the lease for a GMP-sanctioned facility located just outside of Malta’s capital to MPXI for C$2.3 million.

When the transaction was first announced, Daniel Fryer, MPXI’s Head of European Development, said in a press release the move was an important milestone in the company’s expansion into Europe.

“Malta not only provides a strategic gateway to the emerging EU markets but also upholds high pharmaceutical standards and a strong regulatory framework,” said Fryer.

In August, MPXI said its Malta operations received a letter of intent from Malta Enterprises, a government agency tasked with seeking foreign investment into the country, for a license allowing it to import, extract and produce medical cannabis products for Malta and export them to key markets in the EU.

For Materia Ventures, those key markets include Germany, Denmark and the UK, Anand said.

Like Fryer, Anand agrees that the comprehensive Maltese pharmaceutical framework presents a unique advantage, pushing its position ahead of other low-cost cannabis production countries like Macedonia, Lesotho and Jamaica.

“Malta plays a pivotal role in that element … in setting up a regulatory regime that fosters the quality aspect,” said Anand.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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The Australian cannabis market has been maturing since medical marijuana was federally legalised in 2016.

The next year, Food Standards Australia New Zealand legalised low-THC hemp food for human consumption in Australia. The country went on to legalise medical marijuana exports in 2018, allowing medicinal marijuana products developed in Australia to be exported to licenced recipients in countries where the drug is legal.

Recreational cannabis remains federally illegal in the country, but recent legislation shows the door may be opening. In 2019, the Australian Capital Territory passed a bill allowing for the possession and growth of small amounts of cannabis for personal use. The law went into effect on January 31, 2020.

More recently, in late 2020, the Therapeutic Goods Administration greenlit the sale of low-dose cannabidiol (CBD) through over-the-counter methods without a prescription. The ruling from the Australian regulatory agency is expected to officially come into effect in February 2021.

With these and other changes in the works, Australia’s cannabis industry is projected to have long-term potential. The legal cannabis market in Oceania is expected to be worth US$1.55 billion by 2024, with Australia accounting for 79 percent of the region’s market, Prohibition Partners forecasts.

According to a study from FreshLeaf Analytics, the value of the medical market in Australia reached AU$95 million in 2020, and the firm expects revenue to jump again to over AU$150 million in 2021. In short, Australia’s role in the global cannabis industry will certainly continue to grow.

Here the Investing News Network profiles 10 ASX cannabis stocks with market caps between AU$30 million and AU$225 million. All ASX cannabis stocks below are listed in order of market capitalization from largest to smallest, with data compiled using TradingView’s stock screener on January 12, 2021.

1. Creso Pharma (ASX:CPH)

Market cap: AU$209.83 million

Creso Pharma was the first company to import medical cannabis into Australia and the first to launch these products in Switzerland for people, as well as animals. The cannabis company’s anibidiol product was the first hemp CBD complementary feed in animal health thanks to a partnership with Virbac Switzerland. Creso Pharma has also launched cannaQIX in Switzerland; it was the first CBD nutraceutical in human health.

The company’s medicinal cannabis product lines cover therapeutics, nutraceuticals, animal health, lifestyle and topicals.

2. Cann Group (ASX:CAN)

Market cap: AU$176.84 million

Cann Group provides a range of medicinal cannabis products for patients in Australia and globally. In 2017, the company was granted Australia’s first cannabis research licence, as well as the first medicinal marijuana cultivation licence. Cann Group partners with leading medical scientists in Australia to research and harness the therapeutic potential of cannabinoids, terpenes and other bioactive constituents of cannabis.

The company has secured supply agreements in global cannabis markets, including the UK, Germany and other European segments.

3. Incannex Healthcare (ASX:IHL)

Market cap: AU$166.42 million

Incannex Healthcare is a clinical-stage cannabinoid medicine company with global export capacity. It has four clinical programs underway for the development of a variety of cannabis medicinal products aimed at major unmet medical needs, including obstructive sleep apnea, traumatic brain injury/concussion, sepsis-associated acute respiratory distress syndrome and temporomandibular joint disorder.

In 2020, the company worked to advance its clinical trials. By the second half of the year, cannabinoid products accounted for Incannex’s entire revenue stream.

4. Botanix Pharmaceuticals (ASX:BOT)

Market cap: AU$131.37 million

Botanix Pharmaceuticals has a product pipeline that includes three advanced clinical programs using synthetic cannabidiol for the topical treatment of serious skin diseases and for antimicrobial applications. The company also has an exclusive licence to use a proprietary drug-delivery system called Permetrex for direct skin delivery of pharmaceuticals.

Botanix Pharmaceuticals’ programs are focused on treating acne, rosacea, atopic dermatitis and microbial infection. The company secured a clear development path for its BTX 1801 synthetic cannabidiol antimicrobial product after the successful completion of a pre-investigational new drug meeting with the US Food and Drug Administration.

5. Althea Group Holdings (ASX:AGH)

Market cap: AU$114.2 million

Althea Group Holdings takes the concept of medical cannabis a step further with its work as a pharmaceutical-grade cannabis supplier. In addition to offering relief through accessible medical cannabis, the company is implementing components of the plant in its research on advanced drugs.

Althea has successfully expanded into the global cannabis market with a wholesale supply agreement to import a range of Althea-branded finished products for sale and distribution in South Africa beginning in Q2 2021. This agreement came on the heels of the news that the company is slated to become the first commercial supplier of Australian medicinal cannabis extract products to the German market, with all necessary licences for sale and distribution granted by the German government.

6. Zelira Therapeutics (ASX:ZLD)

Market cap: AU$113.79 million

Zelira Therapeutics’ efforts are on unmet clinical needs and on using medicinal cannabis to treat a range of diseases and disorders. Its most common target areas include pain, anxiety and sleep.

Zelira is largely focused on developing treatment options using plant-based medicinal marijuana, and currently has three clinical-stage programs with a focus on insomnia, autism and opioid reduction. The company is also conducting a pre-clinical research program to test cannabinoids in breast, brain and pancreatic cancer.

7. Medlab Clinical (ASX:MDC)

Market cap: AU$75.51 million

Medlab Clinical is a medical research and development company focused on novel biotherapeutics such as nutraceuticals and pharmaceuticals. The company is also developing pharmaceutical cannabis products.

In early 2020, Medlab Clinical launched the NanaBis Observation Study in Australia. NanaBis is a cannabis-based pain treatment drug that may prove useful as an alternative to opioid medication. It is also being used to investigate cancer pain management.

8. BOD Australia (ASX:BDA)

Market cap: AU$49.25 million

BOD Australia is focused on cannabis and hemp-related products. It develops, distributes and markets health and skincare products created using plant-based extracts in Australia. The company secured a foothold in the European cannabis market in 2020 with a AU$200,000 purchase order for four Swiss-branded hemp seed oil products to be sold in France, the Netherlands and the UK.

BOD Australia’s reach in Australia ranges from selling prescription and over-the-counter products to more than 1,000 outlets, such as pharmacies, retail stores and healthcare chains. It also has distribution agreements with two pharmacy wholesalers in Australia.

9. IDT Australia (ASX:IDT)

Market cap: AU$42.47 million

One of Australia’s oldest listed life science companies, IDT Australia is a pharmaceutical manufacturing company with extensive experience in the development and production of pharmaceutical products. Through its GMP-compliant facilities, the company provides full-scale services for new drug development, plus scale-up and commercial active drug manufacturing for local and international clients.

IDT Australia’s clients include Cann Group; IDT Australia is the manufacturer of the medical cannabis products that are a part of two of Cann Group’s export supply agreements with European and UK partners.

10. MMJ Group Holdings (ASX:MMJ)

Market cap: AU$31.04 million

MMJ Group Holdings has a wide range of cannabis investments, including healthcare products, technology, infrastructure, logistics, processing, cultivation, equipment, retail and research and development.

Among other companies, it has invested in Harvest One Cannabis (TSXV:HVT,OTCQB:HRVOF), which develops health and wellness products; Fire & Flower Holdings (TSXV:FAF,OTCQX:FFLWF), a recreational cannabis retailer that’s developed a variety of cannabis products and accessories; and MediPharm Labs (TSXV:LABS,OTQQX:MEDIF), a cannabis extraction company that received its cannabis oil production licence from Health Canada in 2018. MediPharm Labs has launched cannabis extraction services in Australia.

Investor takeaway

The presence of these ASX-listed cannabis companies shows that the cannabis industry in Australia is undoubtedly growing, as are investment opportunities in Australia’s cannabis industry. While recreational marijuana remains illegal in the land down under, the medical cannabis industry is thriving, making that side of the sector worth considering.

So far, Australia has no timeline attached to the legality of recreational use of marijuana, but it will be a story to watch over the coming years for those interested in the space.

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