The thread that connects Operation Erva Daninha to today's price compression in Portugal's medical cannabis export market begins not in Lisbon or Berlin.
According to an industry source with direct knowledge of the scheme, the criminal network that would eventually trigger a sector-wide regulatory crackdown operated through a mechanism that allegedly exploited the loosest link in Portugal's export chain. Certain non-EU countries allegedly issued import permits that were then used by European operators holding the export permits on the Portuguese side, who sent those documents to Infarmed for approval and shipped product. When Portuguese authorities eventually called their counterparts from the countries in question to verify the documentation, the paperwork didn't hold. The main actors, the source says, made their money and left. "The worst thing is that Portugal was seen as the epicenter of pharma production in the world. They lost the reputation."
Investigators determined that the criminal organization, aware of the flaws and vulnerabilities in Portugal's inspection and control system for cannabis exports, had acquired pharmaceutical companies and created licensed wholesale and export entities, then used false documentation and certificates to send thousands of kilos to illicit markets across Europe and Africa.On May 20, 2025, the National Unit for Combating Drug Trafficking of the Polícia Judiciária carried out 64 search and seizure warrants from north to south of the country and on the island of Madeira, arresting several suspects. The operation was called Erva Daninha.
Legitimate operators were careful to separate themselves from the actors under investigation. Nuno Martens of Takodana said he welcomed the raids. "I don't get why people are scared about this. It's a good thing the PJ is doing these raids. If there are things that need to be investigated, then it's good they are." The real challenges to the market would soon materialize.
The aftermath
Over the months that followed, multiple licenses were pulled. Infarmed tightened oversight and added new paperwork requirements, creating an ever-shifting regulatory ground that made scaling, exports, and day-to-day operations considerably harder. It all started, as one Portuguese producer put it, when Infarmed began inspecting companies more closely after May's police raids.
One processor's trajectory shows how frozen product eventually became a pricing weapon. According to the source, companies that had their licenses revoked were sitting on allegedly 10 to 14 tons of inventory. Initially written off as a loss, the tide changed quickly when Infarmed reinstated those licenses and batches were freed. The source says operators didn't want that product anymore, it was already recorded as a loss, so the logical conclusion was to get rid of it as fast as possible. That's how significant quantities of cannabis were dumped in Germany at one euro per gram, forcibly pushing prices down across the board.
According to market data, by fall 2025, GACP-certified high-THC flower into Germany was already ranging between €0.75 and €2.30 per gram, with EU-GMP certified material commanding a clear premium at €2.15 to €3.55 per gram. By spring 2026, prices dropped further. GACP high-THC flower was ranging €0.60 to €2.50 per gram, and EU-GMP high-THC had softened to €2.00 to €3.48.
Restoring the reputation
The reputational damage had already spread beyond pricing. A grower active in Portugal told MMJ Daily that the trust issues created by the raids compounded everything that followed. "They had certain certificates, but made moves they thought were authorized and weren't." Now when operators want to structure deals through Portugal, the answer from international partners is: anything but Portugal. Malta's medical cannabis business reportedly grew 1,000% last year.
As of early April 2026, at least eight more medicinal cannabis operators had been removed from Infarmed's lists, in what analysts described as an unprecedented drop across all licensing categories. Whether those exits reflect administrative non-renewal, business failure, or the ongoing fallout from 2024's freeze is not yet fully clear.
A recovery signal is emerging, however. Another source familiar with the sector points to a new UN digital verification system for import and export documentation, set to roll out by the end of April 2026, as a potential turning point. The system is already drawing positive early assessments from operators who have seen it in action. If it delivers on that promise, the source believes Portugal's reputation could begin to recover within the next three months.
A trafficking network that allegedly used forged import permits and European export licenses triggered a police operation. The police operation triggered a regulatory crackdown. The crackdown froze tens of tons of legitimate product across Portuguese facilities. The frozen product, once released, hit the German market at a price that reset expectations for everyone else. The main actors, according to the source, are still at large.
