Cannabis-Europe-Italy

Cannabis in Italy

Overview

2020 Market Size 2025 Market Size Largest Product Types (2020) Key Distribution Channels

US $18.6 million

EUR €16.5 million

US $44.5 million

EUR €39.5 million

Oils and Capsules - US $12.9 million (69%) 

Pharmacies

While medical cannabis is significantly easier to obtain in Italy relative to other European countries such as the UK, and products available are diverse as they are extracted in-house by pharmacists with multiple permitted format options, the market is limited by its pricing structure and a persistent supply bottleneck. Though medical cannabis prices are fixed at a reasonable rate for flower, the majority of prescriptions are for extracts, which remain prohibitively costly for patients who are not covered by insurance due to additional costs incurred from the compounding process. The market is further limited by the supply shortages it faces on an annual basis, given that only three entities have been permitted to supply the market and not at rates sufficient to meet demand.

Regulatory Analysis

Medical cannabis was formally approved in 2017, with Law Decree S.2947 “provision concerning the cultivation administration of medical cannabis” regulating the use of medicinal products of cannabis plant origin. Previously in 2015, Decree 9 established the conditions for regulation, cultivation and prescription processing.

Italy’s medical cannabis program is overseen by the Ministry of Health, and the function of the National Cannabis Agency is shared between the Ministry’s Central Narcotics Office and Pharmaceutical Service. The Ministry of Defense is responsible for overseeing domestic cultivation of cannabis. The Italian compounding pharmacist is the only professional authorized to manufacture and dispense medicinal cannabis products.

Though regulations vary at the local level, in general physicians can prescribe medical cannabis so long as it is in keeping with the national framework, which dictates that:

  • Cannabis must only be prescribed when previous treatments have proved to be ineffective.
  • The prescriptions are valid for 30 days and current eligible conditions include chronic pain, spasticity, Tourette’s syndrome and appetite loss in patients with AIDS and anorexia.
  • To prescribe medical cannabis, the doctor assumes responsibility and must obtain informed consent from the patient.

The administrative regions in Italy have a degree of autonomy for health policies and as a result, the majority offer patients some insurance coverage for medical cannabis. For cannabis produced by the military facility, the price paid by pharmacies is regulated and fixed at €6.88 per gram (plus VAT and shipping). The Ministry of Health also enforces a maximum retail price of €9 per gram of flower (+10% VAT) to standardize prices for patients, though pharmacists may add compounding or other additional fees to this cost, plus regions may introduce regional price laws. Thus ultimately, though the prices paid by patients are technically fixed, they can vary depending on how the flower is sold and prepared (i.e. oil vs ground flower), as well as the dosage defined in the prescription. As it is advantageous for pharmacies (which must pay their own 22% VAT for flower) to compound and sell oils at a premium, the retail price that patients pay on average has ended up closer to 20 euros per gram.

Competitive Landscape

Roughly two-thirds of medical cannabis demand in Italy is met by imports from the Netherlands (Bedrocan via Dutch Office of Medicinal Cannabis - OMC), with the rest supplied domestically by the Italian army (SCFM, domestic cultivation) and Canada’s Aurora Cannabis (supply imported under government tender).

Approved cultivars (not all of these are available at any given time):

There are significant annual supply shortages in Italy when the annual limit that the Netherlands are willing to export is reached (typically around September/October), and by December/January there is very minimal stock left in the country. While supply may slowly increase over time as the SCFM builds production capacity and improves quality, and additional government tenders are announced, there is no immediate term plan to address supply bottlenecks in the country and the competitive landscape is unlikely to see any major shifts during the forecast period.

Distribution Analysis

Suppliers may sell product to distributors (who sell to pharmacies), to the Italian military in the case of Aurora, or directly to public hospitals with pharmacies. All medical cannabis product is sold to patients by compounding pharmacies, with the rare exception of finished pharmaceutical Sativex, which is only prescribed in hospitals by neurologists.

Product Type Analysis

Barring finished pharmaceutical Sativex (a 1:1 THC:CBD hybrid for treatment of spasticity from multiple sclerosis), which makes up an extremely small portion of the market, there are no pre-packaged extracts on the Italian market. All domestic production and imports are for dried flower, which pharmacists can compound into ‘galenic formulations’ in a range of formats depending on what is identified in the prescription. Extraction is carried out at in-house pharmacy laboratories.

Today, the market is largely dominated by oils and capsules per Dr. Marco Ternelli (compounding pharmacist at FarmaGalentica, one of the top three pharmacies in Italy by volume of cannabis compounded) – as well as other extracts like resin/RSO, eye drops, liquids for vaporization, topicals and suppositories. The second-largest product category after extracts is flower, which is sold primarily for vaporization, but also for tea preparation.

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