Providing new opportunities for investment in Cyprus
In February 2019, the Cypriot Parliament approved and passed the amendment to the Drugs and Psychotropic Substances law of 1977, and implemented the Drugs and Psychotropic Substances Regulations of 2019, thereafter coming into force on the 6th of March 2019. These amendments essentially legalise the cultivation and production of cannabis for medical purposes. The said Regulations aim at managing the import and export of medical cannabis, regulating the licensing of research and development of cannabis in medicine, and providing a framework for its production, sale and supply.
Undoubtedly, this step not only brings Cyprus to the forefront of research and development in the field of medical cannabis at European Union level, as it is one of the few Member States to have taken such large strides in the subject, but also provides an excellent opportunity for bringing in further investment in pharmaceutical research and development on the island under an already favourable investment climate. In fact, as the subject still remains largely unregulated at EU level, despite the call by the European Parliament to regulate the subject last February, Cyprus is already a step ahead of many of its fellow Member States.
What makes Cyprus stand out?
Cyprus stands out as a location for the cultivation of cannabis due to the warm and humid climate and the long periods of sunshine that favour the island, allowing for excellent environmental conditions for the growth of good-quality cannabis.
Additionally, Cyprus' membership in the European Union further allows for direct access to the EU Single Market, which has seen a growing interest in medical cannabis in the last few years, in particular with the gradual decriminalisation and legalisation of the use of the product as a medical drug across several EU Countries. Cyprus' position in the south-eastern Mediterranean is also undoubtedly considered as strategically and geographically ideal with access to Europe, the Middle East and most of Africa.
Finally, the favourable foreign investment conditions in Cyprus in general, and the proactive encouragement of foreign direct investment in Cyprus by the Cypriot government, coupled with a favourable corporate tax system and well-established legal and regulatory framework, undoubtedly make Cyprus an interesting opportunity for those already involved in the production, sale and supply of such products on the global markets.
What do the Regulations envision?
In addition to legalising the imports and exports of cannabis and by-product substances, the Regulations also permit the cultivation, possession and use of these products, strictly for medical and medicinal purposes, thus enlisting cannabis as a regulated legal drug.
This is made possible through a strict system that the Regulations set up, which allow for three licensed producers to be able to engage in the aforementioned activities related to medical cannabis, as set out by the Regulations and include its production, cultivation, sale and supply.
Who is allowed to apply for a licence?
Both natural and legal persons are allowed to apply for a producer's licence, so long as they fulfil the below conditions:
- The natural person, or directors and employees of legal persons, have to be adults, of any nationality, and must permanently reside in Cyprus or within an EU Member State.
- Both natural and legal persons have to have at least five years' experience in the cultivation and production of medical cannabis on the global market (in the case of legal persons, this condition may be fulfilled if a subsidiary or holding company or two of the natural persons holding a key position within the company have such experience)
A licenced producer shall thereafter have to indicate a senior official and a supervising official that will be in charge of managing the producer's activities within the licenced premises.
How to apply for a licence?
It must firstly be noted that the current Regulations allow for the possibility of three such licences to be issued by the Ministry of Health. These licences shall be granted following a public call for expression of interest to three natural or legal persons chosen by a Coordinating Committee to be set up by the Council of Ministers. The elements that the Coordinating Committee shall take into account while considering the prospective candidates will include having sufficient funding to carry out the relevant activities, having adequate experience, a well-defined business plan and having a suitable security plan for the premises.
Furthermore, the process for the granting of the licence, after being elected by the Coordinating Committee, includes providing full details of the person's information such as address, date of birth, and contact details, but also detailed plans with regards to the security of the premises and an efficient and adequate business plan.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.