The European medical cannabis supply chain has spent the better part of three years running through Portugal. The infrastructure was there, the relationships were there, and for a while, the prices made sense. Then things started going sideways. Compliance issues piled up, and the confidence of buyers who had built their pipelines around Portuguese processing started to erode. The question now is where that volume goes next, and the answer, at least according to one GMP-certified operator already set up in Spain, might be closer than people think.
Americo Folcarelli from Extraction Solutions explains that the company was built to support CBD extractors with above legal THC threshold crude oils. The Spain based company takes the oil, remediate the THC, handle the post-extraction work, and do it all under GMP from day one. In 2019, when this all started, medical cannabis was not part of the roadmap. "We started with the idea of building a location where all the CBD extractors in Europe would be sending their crude oil," Americo says. "We'd get the oil, remediate the THC out, we had all the equipment to do post-extraction. We went with the idea to be GMP from day one." Americo is very much aware of how crucial GMP is in Europe cannabis. It's no wonder he's also the one behind Grecan, a GMP-certified cultivation facility out of Greece.
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GMP from the start
The GMP certification for Extraction Solutions in Spain came in 2022, making the company one of the earlier certified operators in Europe. Shortly after, the company started manufacturing medical cannabis APIs, as well as Dronabinol. Around the same time, Americo found himself pulled into the German import corridor, spending the better part of two and a half years working with Canadian producers moving flower from the West Coast of Canada into Germany. It was through that work, watching the market from the logistical inside, that he started seeing the Portuguese situation for what it was becoming. "At a certain point, I started to see this whole bending of the rules, taking advantage of the rules," he says. "I told my partners, there's going to be an opportunity, a gap to fill in the market. I think Spain could take over, while Portugal is going to be going through these problems."
About ten months ago Americo made that read, and reality seemed to prove him right. German importers who built their sourcing strategies around Portuguese processing are actively looking for alternatives, and Spain, for all its well-documented regulatory friction, is starting to look like the most credible one, Americo believes. "We are already licensed for flower alongside distillates and extracts, our logistics infrastructure is in place, we've cultivated a genuinely productive relationship with Spanish regulators."
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The classic complaint about Spain is too much bureaucracy. "But they've been helpful, they are very proactive and reactive," he says. "We are happy with them, and it makes us feel comfortable, as well as our clients. And because we have companies close by that do stability studies, it gives Spain this hub where there's everything a client would need."
The pitch to German buyers isn't simply that Extraction Solutions can do what Portugal was doing. "We don't have the stigma attached to what happened in Macedonia and Portugal," Americo says. "We can look at the mistakes made, that creates more confidence in clients, knowing we are not going to be stuck with products on hold for months and they need to dump it. It's better for the growers because they get better prices, and better for the patients, as the quality of the product will be better."
Not just APIs
On the research side, Extraction Solutions is in conversation with one of the largest cannabis companies in Germany about joint R&D work in Spain, including an education program and product development around formats that don't yet have a real foothold in European medical markets. "German clients are coming to the importers, the wholesalers, they are coming to us not just saying, take over what Portugal was doing," he explains. "They want us to do R&D on products that will be revolutionary, looking at how, say, live resin could be a better product for some patients rather than distillate-based products. How do we hold extraction for products that aren't on the market now, and how those products can be used in therapies."
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Spain is still not where Germany or the UK are from a regulatory standpoint, and Americo doesn't pretend otherwise. The framework for medical cannabis is younger, less developed, and the country's status as something of an outlier in the EU creates its own uncertainties. But the market, it seems, is already making its own calculations while the regulators catch up. "Whenever there's an outlier in the EU, sometimes in the future it'll become like everybody else," Americo says. "The burden is on the EU to have one cohesive law for everybody. But right now, the opportunity is here."
For more information:
Extraction Solutions
Av. dels Oficis 10, Pt. 3, 03570 Villajoyosa, Alicante, Spain
(+34) 865 662 220
[email protected]
extractionssolutions.com
