Legalization of medical cannabis in Ukraine

Publication date: January 10, 2024

As a law firm cooperating with clients in matters of cross-border investments, KIEŁTYKA GŁADKOWSKI KG LEGAL tries to keep up to date with information on regulatory changes in neighboring jurisdictions for the purposes of the expansion and investment plans of our foreign clients.

In this article, we present general information about legislative changes in Ukraine in the field of medical cannabis.

KIELTYKA GLADKOWSKI KG LEGAL PROVIDES ITS FOREIGN CLIENTS WITH LEGAL SUPPORT IN UNDERTAKINGS RELATED TO MEDICAL CANNABIS LOGISTICS CENTRES IN POLAND FOR DISTRIBUTION TO UKRAINE

Legislative changes in Ukraine.

In Ukraine, on December 22, 2023, a bill on the legalization of cannabis for the production of medicines was passed. It provides for the authorization to use medical cannabis for the prevention and treatment of various diseases. This medicinal product will, of course, be available only on prescription, and its sale will only be carried out by pharmacies that have the required licenses and can offer appropriate storage conditions. Additionally, each plant, batch of processed products, unit of packaged products, and packaging of cannabis-based medicine will be marked with a unique electronic identifier. The project also envisages the creation of a special information database in which data from these identifiers will be entered.

Despite the controversial topic of the bill, it was passed by 248 deputies, and only 16 voted against the proposal. However, this vote was preceded by a large number of amendments. A total of 900 were submitted, of which 100 were included in the bill. It should also be mentioned that under the act, the cultivation and distribution of cannabis for non-medical purposes will still be punishable.

Who is medical cannabis intended for?

Such strong support for the legalization of medical cannabis, visible in the overwhelming majority in the vote on the bill in the Verkhovna Rada of Ukraine, is the result of the current situation in Ukraine. According to Maria Mezentseva, vice-chair of the Commission for the Integration of Ukraine with the EU and head of the Ukrainian delegation to PACE (PREVENTION – ACCOMMODATION – COMMUNITY – ENTERPRISE Organization), over 70% of Ukrainians currently support the legalization of medical cannabis.

The health benefits of its properties may prove crucial in relieving severe pain, resulting in patients limiting the use of strong painkillers. A key aspect turned out to be the positive impact of medical cannabis in the treatment of patients with psychological problems, such as post-traumatic stress disorder, which many Ukrainians struggle with and may struggle with after their experiences during the war currently taking place there.

According to information provided by Warsaw Institute, the WHO National Office in Ukraine and the Ministry of Health of Ukraine estimate that from 10 to over 15 million Ukrainians will need professional psychological help due to war.

List of diseases and ailments that can be treated with medical cannabis:

• Pain of various origins, including: traumatic, postoperative, neuropathic, in the course of degenerative diseases, pain in cancer patients, migraine headaches, dysmenorrhea, fibromyalgia;
• Neurology: multiple sclerosis, amyotrophic lateral sclerosis, spinal cord injury, epilepsy, dystonia, Huntington’s disease, Parkinson’s disease, Tourette’s syndrome, Alzheimer’s disease, dementia;
• ADHD, ADD;
• Autism;
• sleep disorders;
• Post-traumatic stress disorder (PTSD);
• fatigue syndrome;
• Inflammatory bowel disease;
• Crohn’s disease;
• Ulcerative colitis;
• Rheumatoid arthritis;
• Endometriosis;
• Glaucoma;
• Skin inflammations, including:
  • Psoriasis,
  • Atopic dermatitis (AD);
• Metabolic syndromes: obesity, diabetes;
• Nausea and vomiting during radio- and chemotherapy treatment of cancer.

Is Ukraine a potential new giant on the medical cannabis production market?

The law passed by the Verkhovna Rada of Ukraine introduces many new opportunities and solutions, both for companies already present in Ukraine and for many foreign giants wanting to expand their area of activity. Pharmaceutical companies will be able to produce new drugs, and farmers will gain access to a new niche for growing medical hemp, not just industrial hemp.

According to the act, the production of medicines will be strictly controlled at all stages. It will be crucial for potential producers to obtain an appropriate license and GMP certificate (certificate of good production practices) and to grow it only in closed ground conditions.

It will also be necessary to enable the Police to provide 24-hour video surveillance of cannabis cultivation. Additionally, to effectively track the flow of plants to the patient, it was decided to individually code each bush.

Moreover, the Ukrainian government promises subsidies for the construction of new greenhouses where cannabis production takes place. Greenhouses should cover an area of at least 0.4 hectares, but not exceeding 2.4 hectares, which is the limit for granting a subsidy. Depending on the parameters given above, the subsidy will range between UAH 2 million (about PLN 50,000) and UAH 7 million (about PLN 170,000).

Growing medical cannabis in greenhouses allows for as many as 4 harvests per year (3-4 kg per m2, which compensates for the high costs it generates.

A large market, potentially high demand and state subsidies may constitute an interesting alternative for foreign investors. Many companies may be interested in the vision of a new market with potentially large profits. Moreover, the possible production of cannabis in Ukraine for subsequent export to European markets is also an attractive possibility, especially with Ukraine’s active efforts to join the European Union. This is also the opinion of the head of the Ukrainian Association of Medical Cannabis, Gennady Szabas, who claims that international companies are already interested in producing medical cannabis in Ukraine.

The rapidly growing global market means that by 2028, the European medical cannabis industry may reach a value of EUR 115 billion. Analysts’ forecasts suggesting an annual growth of Ukraine’s domestic market by 20% by 2030 herald a significant share of Ukraine in achieving the above-mentioned value and becoming a significant player on the entire European market.

Legalization of medical cannabis in Poland

In Poland, in contrast, the legalization of medical cannabis was regulated by the Act of July 7, 2017 amending the Act on Counteracting Drug Addiction. This Act added Art. 33a, according to which non-fibrous hemp herb and extracts, pharmaceutical tinctures, as well as all other non-fibrous hemp extracts and non-fibrous hemp resin may constitute pharmaceutical raw material for the preparation of prescription drugs. It is necessary to obtain a marketing authorization issued by the President of the Office for Registration of Medicinal Products. This permit is issued for a period of 5 years.

Medical cannabis, unlike the solutions provided in Ukraine, is not a medicine but only a pharmaceutical raw material. Pursuant to the definition in Art. 2 section 40 of the Pharmaceutical Law, it is a substance or mixture of substances used to prepare or produce medicinal products. However, a prescription drug should be understood as a medicinal product prepared in a pharmacy on the basis of a doctor’s prescription, and in the case of a veterinary medicinal product – on the basis of a prescription issued by a veterinarian (Article 2(12) of the Pharmaceutical Law).

Moreover, with the entry into force of the Act of July 7, 2017, it was no longer possible to cultivate non-fibrous hemp for pharmaceutical purposes. As a result, the main source of the discussed pharmaceutical raw material was import. Only the Act of March 24, 2022 amending the Act on Counteracting Drug Addiction introduced the possibility of growing non-fibrous hemp and harvesting non-fibrous hemp herb or resin for the production of pharmaceutical raw material. However, the regulations introduced in Ukraine from the beginning do not provide for any restrictions in this respect.

The Act of March 24, 2022 allows only research institutes to grow medical cannabis under the supervision of the Ministry of Agriculture. It is also necessary to authorize the cultivation of hemp other than fiber hemp, which will be issued in the form of a decision by the Chief Pharmaceutical Inspectorate after seeking the opinion of the provincial police headquarters. In Ukraine, however, non-fibre hemp will be able to be grown by any registered entity that receives a license. As a consequence, many global companies producing medical cannabis may decide to locate their branches in Ukraine, because not only can this be a much cheaper venture, but above all, it can save unnecessary delays in actually entering the market.