Although highly regulated, Denmark’s cannabis industry is maturing at one of the faster rates in Europe, and the new year heralds another milestone on the road towards wider acceptance and tolerance.

A recent political agreement has made further cannabis products included in the government’s four-year pilot programme eligible for reimbursement from January 1, 2019.

Under the agreement, terminally ill patients can reclaim 100 percent of their fees when buying cannabis products included in the pilot programme. Other patients will be reimbursed 50 percent, up to an annual reimbursement amount of DKK 10,000 (around €1,350 or $1,560).

On January 1, 2018, the Danish parliament launched a four-year medical cannabis pilot programme, designed to give patients better access to treatment with marijuana products. It has made monitoring the use of medical cannabis products easier, and created a safer industry for both entrepreneurs and patients, said lawyers from Njord law firm in Denmark.

Furthermore, a parallel development programme allows companies to provide products to the pilot programme, ensuring the Scandinavian territory is one of the few countries in Europe to allow the domestic production of cannabis for medical use.

A domestic success story in the shape of cultivator Stenocare has emerged in the last year, as the Scandinavian region welcomes interest from growers and distributors in Canada, London and the US, all looking to exploit the rapidly expanding European market.

In stark contrast to the mess Germany is making of its domestic licensing scheme, the Danes are pressing ahead with additional regulations designed to crack open the markets for cultivation, manufacturing and distribution of medical cannabis in Denmark.

Licenses are required for firms wishing to legally cultivate cannabis for medical purposes, and potential distributors must also apply to the Danish medical regulator to have their products added to the list of medicines that can be dished out domestically.

The only entities legally able to receive the products are pharmacies, hospitals, and other manufacturers with the same licenses.

In a similar vein to other areas of Europe, exports are under strict supervision, and it is only legal to export to two countries from Denmark; the usual suspects Canada and the Netherlands.

However, while Germany’s licensing and domestic cultivation scheme is floundering, importers in that country have the upper hand, as German-licensed businesses who handle restricted narcotic products can also distribute cannabis without additional licensing, which is not the case in Denmark.

The Danish parliament accepts that the fledgling nature of both the laws and the industry means the legislation will need to be tweaked from time to time.

One of the most recent changes concerned the THC limit in cannabis-based products. As of 1 July 2018, the executive order on euphoriant substances was changed to introduce a threshold limit, making it possible to produce and sell cannabis-based products containing up to 0.2 percent THC without contravening the executive order on euphoriant substances.

Despite the minor roadblocks, in just a few years Denmark has created multiple new business opportunities, and the government estimates the the number of patients using cannabis will triple from 500 in 2018 to 1,500 in 2021.

“This creates an opportunity for companies to enter the medical cannabis market as only a few companies are acting under the pilot programme today,” said Jeppe Brogaard Clausen, attorney at Njord law in Copenhagen.

Denmark’s Stenocare is currently only European firm in the world’s 13 leading cannabis companies, according to analysts at Markets and Markets. That group includes three American firms, one Israeli producer and eight Canadian companies.

In October, Stenocare triggered a stock market charge as investors flocked to buy into its shares on their debut, ramped up by enthusiasm for the therapeutic benefits of its products. The firm was the first European cannabis company to go public with an Initial Public Offering (IPO)

The stock nearly quadrupled in price to hit a high of 33.50 Danish crowns in early trade, valuing the company at more than 200 million crowns ($30 million). The IPO had priced shares at 8.80 crowns.

The company, only launched in 2017, announced at the end of November it had received its second batch of medical cannabis oil, imported from its strategic partner CannTrust Inc. in Canada, ensuring it was on target to hit patient demand.

Since the products were introduced on the Danish market in September 2018, the oil products have been prescribed to patients with multiple sclerosis, chronic pain and nausea caused by treatment with chemotherapy.

Stenocare is pumping the funds into the creation of a major cultivation facility project in Denmark, but now has competition in the form of London manufacturer Indiva.

On November 21, Indivia struck a $2.6 million deal with AEssense Europe, a subsidiary of a California-based hydroponics provider, to acquire a medical cannabis cultivation licence in Denmark. AEssense Europe received its license from the Danish Medicines Agency on January 12, 2018.  

Through the partnership the pair plan to construct an indoor grow facility, and sites in Denmark have been identified to begin construction of a 1,000 square foot research lab as part of the production facility, with ample expansion room to create facilities of such scale as to be able to serve Danish patients as well as the European market with cannabis products.

Indiva chief executive Niel Marotta described the deal, is expected to be signed off by the end of the year, as “the gateway to Europe”.

“This is a big deal for us,” he said Marotta. “It allows us to build a global platform, and the European market is huge: half a billion people, high per-capita GDP across the board. That will enable us to sell product not only in Denmark, but all over the EU.”

Europe’s industry is predicted to grow from $10.3 billion in 2018 to $39.4 billion in 2023, and tipped for the fastest compound annual growth rate as medicinal cannabis is increasingly rolled out by a number of countries on the continent.