The Italian government plans to import 400 kilograms of medical cannabis over two years and has opened the bidding process to companies that want to supply Europe’s second-largest market.
The Italian Ministry of Defense – through its office of Stabilimento Chimico Farmaceutico Militare (SCFM) – published the details of the application process for the tender.
Applications must be submitted July 2-3. Questions about the applications process are accepted until June 25.
The reference price for the 400 kilograms (882 pounds) is 1.52 million euros ($1.7 million), which means an average of 3.8 euros per gram.
The winning bid will most likely offer a lower price.
The previous application process, won by Canadian producer Aurora Cannabis in early 2018, was for a total of 100 kilograms.
That application process had a reference price of 5.7 euros per gram. Aurora, however, offered an average of 3.2 euros per gram.
The 400 kilograms will be divided into three lots:
- 320 kilograms of high-THC flower, with a reference price of 4 euros per gram.
- 40 kilograms of THC/CBD-balanced flower, with a reference price of 3 euros per gram.
- 40 kilograms of high-CBD flower, with a reference price of 3 euros per gram.
Good Agricultural and Collection Practices (GACP) and Good Manufacturing Practice (GMP) are part of the quality requirements, limiting to only a handful the number of companies that have a realistic chance of winning.
The technical specifications also include strict limits on pesticides and heavy metals as well as stability data to support the proposed shelf life, which needs to be a minimum of six months at the time of delivery.
Italy was the second-largest European medical cannabis market in 2018, with sales totaling roughly 650 kilograms.
Currently, three sources are supplying the Italian market:
- Ongoing imports from the Netherlands, imported from the Dutch Office of Medical Cannabis and produced, so far, only by Bedrocan. Roughly 400 kilograms were exported from the Netherlands to Italy in 2018, and that number is expected to increase to 700 kilograms in 2019.
- National production by the SCFM, which totaled 100-150 kilograms in 2018 and is expected to reach 150 kilograms in 2019.
- Aurora Cannabis, the winner of the 2018 supply deal.
Assuming the winner of the new application process supplies 50 kilograms before the end of 2019, Italy’s total estimated sales in 2019 would be 900 kilograms, an increase of almost 40% over the total sales in 2018.