Issue link: https://maltatoday.uberflip.com/i/1150355
01.08.19 12 OPINION Yann Cecconi Yann Cecconi is a Business Development Assistant at PKF Malta, an audit and consultancy firm I t must be admitted that the public in general has been wary of the idea of entering the medical cannabis mar- ket. Perhaps, this fear was accentuated by certain sectors of the media which vented stories aimed to spread "scare- mongering" headlines. is can be attributed to the fact that marijuana had previously been a "taboo subject" that no Maltese politician had even dared to mention let alone suggest to promulgate laws to regulate its pro- duction for medical use. It was only last month, that Prime Minister Joseph Muscat announced the successful launch of an exciting new sector of medical cannabis in Malta. Media quoted him saying that over 40 international companies applied to start investing in the sector out of which, Malta Enterprise accepted 20 projects. Of these, it is worth mentioning a number of world-wide names such as MGC Pharma, Supreme, Aurora, Aphria, Columbia Care, MPXI, Way- land, Alvit, Nuuvera and Panaxia. All passed the rigorous tests and were awarded Malta Enterprise's Letter of In- tent. Muscat made sure to emphasise that Malta picks only the best, the most in- novative and reputable. As a matter of fact, all the applica- tions which were submitted, have gone through a minute evaluation process and a very thorough due diligence exer- cise, in order to ensure that only those applications which met set criteria and shared our vision were eventually ap- proved. is protects Malta's reputation since one appreciates that it does not say yes to everyone that knocks on the door. It is slowly turning the selection process into an elite club of quality and serious producers. Typically, one meets with the Cana- dian firm Nuuvera which invested €5 million project to turn it into a hub for the production and distribution of oil- based medical cannabis products to the emerging European medical cannabis market. e company says it does not intend to grow cannabis in Malta. Moving on, one observes an Australian company Pharma which recently was awarded a 4,000 square metre site by the govern- ment to build and operate a cultivation and medical cannabis facility. Cannabis has undergone a normalis- ing process given its wide adoption, so- cial tolerance and generally speaking a broader cultural acceptance; going from being branded as a gateway drug to be- ing used as a therapeutic alternative to conventional medicine. e legalisation for medical canna- bis represents a golden opportunity for licensed producers seeking to posi- tion themselves at the forefront of this emerging landscape. In fact, the legal cannabis industry is attracting more and more investors who want to diversify their portfolios since this industry is considered one of the most promising industries. Estimates are that in ten years, the Eu- ropean medical cannabis market is set to be worth more than €55bn. e le- galization for medical cannabis in many countries has opened the way for a new market with strong potential: that of so- called beauty products. Indeed, what we find in cosmetics is cannabidiol (CBD), one of the mol- ecules found in cannabis, thought to have medical benefits and can more ef- fectively improve the health of our skin. Its extraction is made from the head or the resinous part of the cannabis plant. CBD can be found in different forms but oil is the most widely spread form. Several studies have shown the effec- tiveness of CBD oil for cosmetic skin and hair care, indeed, CBD oil is an effective compound to treat acne, ec- zema, psoriasis and many other skin disorders. at's why CBD is now considered one of the most promising components for the treatment of skin problems. By discovering the multiple aspects of cannabis more and more investors and entrepreneurs have a vested interest in this branch because both the mul- ti-billion-dollar beauty industry and the cannabis industry come into play. Many small players have rushed into this market but leading companies in the beauty sector adopt a wait-and-see attitude due to legal and regulatory un- certainties about this substance. In fact, there is no harmonisation of rules at European level concerning the production of cannabis for the purpos- es of cosmetic companies, in some Eu- ropean countries only hemp seeds can be used which might force the major groups to remain cautious by produc- ing cosmetics products based on oil from hemp seeds used in cosmetics for a long time and wait for clarification of regulations. However, the fact remains that more companies are now free to develop CBD beauty products and the poten- tial of the CBD beauty industry is even greater when one knows that these beauty products can be sold without a prescription which eases consumer ac- cess. One could take the example of Sepho- ra, the famous multinational beauty and care chain which has put CBD products in stores, a first in the U.S. It should be noted that the entry into the CBD market presents some difficul- ties, indeed, it's not easy to find a qual- ity source of CBD and the manufactur- ing processes and standards for CBD products may differ making it difficult for businesses to meet the requirements of the various medical products agen- cies across countries as some countries have specific CBD laws and regulation currently limiting market expansion. Nevertheless, as laws and regulation concerning the production of CBD products become more harmonised, we can expect all the major groups in the beauty sector to rush into it by adding CBD products to their current range or by acquiring smaller companies. Cer- tainly, this market will grow further. In conclusion, Malta sees research in cannabis oil as a progression of its life sciences sector and a continuation of its pharmaceutical industry, and is work- ing to foster growth by building a "rela- tionship of trust" with local and foreign companies. PKF Malta is expanding its links with affiliated firms in the USA, Canada and Australia to create a forum for further promotion of the nascent cannabis sec- tor in Malta. Potential of CBD oils for cosmetic use