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Navigating regulatory complexities to set up medical cannabis farms in Spain and Portugal

Germany often makes headlines as the first European country to legalize adult-use cannabis. It is also touted as one of the most profitable medical cannabis markets in the EU. However, other countries have also regulated the medical cannabis industry, such as Italy and Denmark—which recently made their medical cannabis regulatory framework permanent—as well as Spain and Portugal. The latter two, in particular, boast favorable climatic conditions for large-scale cannabis cultivation.

Being part of the EU, however, means that regulations can be quite stringent and present significant hurdles. This often results in high compliance standards for medical cannabis cultivation. In other words, your medical cannabis facility must closely resemble a laboratory; otherwise, obtaining a license is unlikely. "Delays or difficulties in obtaining the appropriate license can be quite burdensome for a grower constructing their facility," says Jaime Gil-Robles, Senior Advisor at AgroPharm, a company specializing in the development of medical cannabis facilities (EUGACP and EUGMP).

A bit of Spain, a bit of Portugal
Based in Córdoba, in the south of Spain, and operating across the Iberian Peninsula and Europe, AgroPharm is well-versed in the nuances of different countries' regulations. "In Spain, medical cannabis cultivation is authorized only under licenses issued by AEMPS and is strictly limited to research or production projects for third parties (generally for export)," Jaime explains. The licensing process in Spain is seen as more restrictive and bureaucratic, as AEMPS grants few licenses under very specific conditions, which may discourage new investors. Spain remains more conservative than Portugal, adopting a more limited and restrictive approach.

"According to the last update from AEMPS (29th October 2024), in Spain there are currently 16 licenses For research purposes, 10 licenses For the production and/or manufacture of Cannabis and its products for medical and scientific purposes, and 1 license for obtaining the batches necessary for the validation of the manufacturing process of narcotic active ingredients for medical purposes. On the other hand, with respect to cannabis production projects in Portugal,

INFARMED (23rd January 2025) indicates there are currently 40 licenses granted for Cultivation of Controlled Substances / Cannabis, which indicates the progress and commitment that Portugal has made in the cannabis sector compared to Spain" indicates Pablo Cortés, Technical Sales Engineer at Agropharm.

"The medicinal use of cannabis in Spain is less developed than in Portugal, with few authorized products and an absence of a specific framework for patients," Jaime continues. "On the other hand, initiatives such as the Spanish cannabis and hemp cluster, CLUSCANN, are emerging. These aim to foster constructive dialogue between the cannabis industry and government entities, ensuring a clear and firm legal framework for all actors in the sector in Spain."

Medical cannabis was regulated in Portugal in 2018. INFARMED has created a clearer and more favorable framework for the industry regarding licensing. The licensing process is considered more structured and accessible. Although the requirements remain strict, there is greater clarity in the procedures and fewer bureaucratic hurdles. Portugal has adopted a more progressive stance toward medical cannabis, facilitating its development as an emerging industry.

Constructing a farm
With experience in both markets and regulatory environments, AgroPharm knows how to navigate these complexities when a grower wants to establish operations in Spain or Portugal. Naturally, they have some top tips for those looking to enter the cannabis industry. "Facility design should be planned according to the type of project (indoor, greenhouse, or outdoor) to comply with regulations such as GACP and GMP from the outset. It's important to design facilities in phases to accommodate initial capital requirements and adapt to potential future changes in legislation, instead of designing the construction of a massive facility from the very beginning. Strategic locations with access to essential resources and compliance with current regulations are crucial. Using renewable energy sources, such as solar panels or geothermal energy, and durable materials can help reduce costs and environmental impact," Pablo advises.

He further explains that a critical aspect of planning involves dividing facilities into specific areas for each stage of cultivation. This includes adapting production capacity per cycle and cultivation area to meet market demand. "Adequate environmental controls and workflow designs are essential to optimize production processes, prevent cross-contamination, and ensure hygiene and operational efficiency," Pablo says. Another key point he mentions is that "as a general rule, it is more expensive to reconvert an existing building or greenhouse designed for horticulture other than cannabis than to build a project from scratch specifically designed to optimize the cultivation of this demanding crop".

Another key factor is integrating automated climate control systems, LED lighting, and HVAC systems to regulate temperature, humidity, and CO₂. Filtration systems are necessary to maintain a clean and safe environment, ensuring compliance with regulations and the production of healthy products. "Implementing sensors to monitor critical parameters, such as climate control systems or irrigation and nutrient dosing systems, is crucial. Using certified traceability software ensures transparency and regulatory compliance. Additionally, conducting exhaustive quality analyses of marketed products is of utmost importance," Pablo emphasizes.

"Market planning is another vital consideration for growers. However, it can be
challenging because market conditions may change by the time a facility becomes operational and the first harvest is ready, potentially impacting profitability. "At AgroPharm, we develop initiatives such as AgroPharm On Tour, where we attend various industry-related events throughout the year to promote our clients' products and services, whether raw materials or final products derived from the cannabis plant," Jaime says. "These initiatives allow us to exponentially expand our network of contacts, benefiting our customers and partners. Additionally, we provide legal and regulatory advice to help clients navigate the licensing and processes necessary for the successful development of medical cannabis projects."

Projects
None of this would be possible without the expertise of a specialized technical engineering office to prepare and optimize equipment calculations, area dimensions, and project workflows. One example of a case study of AgroPharm's expertise designing and building facilities is the Greatsoul Pharma project. "Greatsoul Pharma was a medicinal cannabis production project in Ortiga, Portugal, a multi-tunnel greenhouse design covering approximately 7,200 m²," Pablo says. "Another example is Neogreen, an indoor multi-tunnel project of around 4,600 m² under construction located in Guimaraes, Portugal. Currently, we are in the planning and design phase of two new projects in Spain, despite the regulatory uncertainty for the sector in this country. Additionally, we have collaborated with research entities in Spain, such as CTAEX, to develop outdoor cultivation projects aimed at reindustrializing industrial hemp in Spain—a historically significant crop with exciting global potential and new applications being discovered daily." As more growers and companies enter the market, competition is bound to increase, requiring growers to consistently produce high-quality cannabis. "Growers, decision-makers, and investors will focus on optimizing processes and complying with regulations such as GACP and EU-GMP" Jaime notes.

"AgroPharm, with its expertise in facility construction, is positioning itself as a leading company in the design, integration of services, and construction of advanced infrastructures for the legal cannabis sector (industrial, medical, and recreational/adult use) in regulated countries. AgroPharm will continue to promote efficiency, quality, and stability in raw materials and final products derived from the Cannabis sativa L. plant in a rapidly evolving sector," Pablo concludes.

For more information:
AgroPharm
+34 868 990 405
+34 911 454 862
info@agropharm.com
agropharm.com