Amid Government Corruption, Macedonia Waits on Legislative ‘Go-Ahead’ to Export Cannabis Flowers

For more than 14 years, the tiny, poor Balkan country of North Macedonia has been trying to edge its way into the EU. Now, with just over two million inhabitants, and legislation to run a global medical cannabis market, North Macedonia is fighting corruption to prove that big things can come in very small packages.

In Macedonia, cannabis is illegal for recreational use. There are no personal use or decriminalization laws. It cannot be bought, sold, grown, or used legally by private residents for recreational purposes. Prison sentences for being caught breaking cannabis laws can go up to 10 years.

Medical cannabis in North Macedonia

In 2016, a North Macedonian Health Committee approved an amendment to the laws governing the control of psychotropic substances, allowing for cannabis to be used legally for medicinal purposes. Both ruling and opposition parties were in favor of the change. Part of the reasoning behind the necessity of the law, was to make it so that people who were already using such products illegally to self-medicate, could get better results with medical supervision.

The new laws allowed oils and extracts with .2% THC or lower to be sold without a prescription, and those containing greater than that amount to require a prescription. According to the law, the only doctors capable of writing prescriptions for cannabis products are: radiologists, oncologists, neurologists, and infectious disease specialists.

To give an idea where North Macedonians themselves stood on the issue of legalizing for medicinal use before it happened, a poll from the previous year published by the M-Prosepekt agency, found that 70% of those polled were for the legalization. This number was up 20% from a similar poll done in 2013.

Medical cannabis production in North Macedonia

Along with opening up the laws to allow for residents to have access to medical marijuana, North Macedonia also opened up its laws for the cultivation, production, and exportation of cannabis products.

As of January of this year, over two dozen private companies have already received licenses for growing cannabis, with many more applications in the pipeline. But gaining access to Macedonia’s cannabis industry is no cheap feat. Even without the cost of a license, investors should expect to shell out anywhere between $750k-$1 million, and will need a registered entity in the country.

The licensing process is multi-step. After the initial one is granted when cultivation conditions are met, along with residency stipulations, a prospective grower must also gain another approval from the Ministry of Agriculture, Forestry and Water Economy to have the right to plant seeds.

Another interesting stipulation of the licensing and growing process in North Macedonia, is that every new business must hire at least four people, one of them being a pharmacist, and one of them being an agriculture expert with a degree in agronomy.

Other stipulations for growing include having security in the form of four-meter-high walls complete with security cameras on top, along with actual security guards to watch the crops. And for all crops to be grown in greenhouses or halls.

North Macedonia has a free market structure to its cannabis industry which allows private companies to grow and sell their product.

The problem

North Macedonia has been building up its medicinal cannabis export industry in the last few years, but according to the county’s laws, only extracts, oils, and tinctures can be exported, the combination of which makes up about 30% of the available market. Smokable hemp flowers and CBD flowers make up the other 70% of the market, making Macedonia only appealing to a small portion of it. In order to gain access to a larger population of buyers, Macedonia would have to start exporting flowers as well.

Of course, fixing a small issue like this shouldn’t be a problem, right? Especially when both leading political parties are on board. Just a simple amendment to current legislation, and – poof! – hemp flowers can be exported abroad. And that’s exactly what should have happened in 2018 when it was realized just how much revenue was being lost by not accounting for this market. In anticipation of this legal change back in 2018, new licenses were given out as more foreign investors took interest, waiting for the legal update and the ability sell low-THC flowers abroad. However, it never happened. Because what’s one of the best ways to stymie anything useful happening in government? Corruption!

Cannabis corruption in Macedonia?

The root of the issue has to do with former prime minister himself, Zoran Zaev, who has been a huge force in building a medical cannabis industry in North Macedonia, stating: “Let me tell you, this country has huge potential, and I’m excited to be a part of turning Macedonia into one of Europe’s first cannabis superpowers.”

The issue is that members of the opposition party made claims that Zaev was showing a major preference when handing out licenses, giving special predilection to a few companies run by his own family members, and that the new legislation to amend current laws to allow for dried cannabis flowers to be sold, was aimed at specifically helping them. In light of this, and some other concerns, revisions to the Law on Narcotic Drugs and Psychotropic Substances was removed from the immediate agenda late last year until revisions could be made.

Along with Zaev’s actions, there were general concerns from non-governmental organizations which want more context concerning obtaining licensing, producing drugs, and the regulation of new drugs. These organizations take issue with the government having sole control of who is granted licensing (without any outside input), the requirement of a €500k bank guarantee, and the overall fear that these reforms would knock smaller players out of the market.

This wouldn’t be the first time in history that contracts have been awarded, and laws manipulated, based on illegal, self-benefitting measures of politicians and businessmen. These measures are not generally met with a favorable reaction by those not on the receiving end of the benefit, and while Zaev denied these claims, the issue helped freeze further discussion on including hemp flowers as exportable products.

Zaev is no longer prime minister. As the Corona pandemic subsides, issues like this that have been pushed to the back burner will once again come out. The draft bill is currently with the Ministry of Health, and will re-enter the legislative process once appropriate revisions have been made. With Zaev out, it should make for smoother sailing once the government is reconvened on the issue. Macedonians and investors are all holding their breath waiting to see, with several businesses relying on this legal change for the operations they’ve already set up.

Conclusion

Macedonia is a country poised and ready to fully jump in. After starting with exports of cannabis oils and extracts, investors are waiting for the final go-ahead in the form of a legal amendment, so that they may start exporting cannabis flowers as well. Perhaps the burgeoning medical cannabis industry will give Macedonia the final push it needs to officially enter the EU, but if nothing else, the sale of flowers could boost overall revenue and give a much needed monetary-injection to the country’s economy.