João is a founding partner of Gama Glória and Senior Advisor at the Albright Stonebridge Group. Scholar, lawyer, and investor with a passion for regulatory challenges. Ex political advisor to the President and ex-Secretary of State for Local Government.
We talked about the current state of Cannabis in Portugal.
(edited for publication)
Good afternoon and welcome to another edition of the CannaList Conversations. We are here today with João Taborda de Gama. He is the founding partner of Gama Glória and is based in Lisbon. Welcome. How are you?
Hi, Patrick. Good. The name is a nasal vowel. So it’s John in English. I’m used to that. I never say that name at Starbucks.
Yes. I can imagine what you would get. So tell us a bit of your background. I know that you’re a lawyer by trade, but tell us a bit of your background.
I studied law, and I was a lawyer all my life. I also teach at the law school. So, I have both academic and professional backgrounds. For two separate periods in my life, I worked on the political side. I was an advisor to the Portuguese president for two years, and I was a member of the Portuguese government for a very short period in 2015. But, apart from that, I’ve been a lawyer all my life as a law professor in various areas. My background is mainly in public and tax law, but seven years ago, I started working on controlled substances, primarily cannabis and other substances.
And what made you make a move?
I grew up in Portugal when we had a considerable debate on drug policy. So, I’ve always been interested in drug policy, drugs in general, controlled substance, and their psychoactive effects. So, I read a lot about that, and I followed the debate in Portugal in the late 90s. Then beginning in the 2000s, before I went to law school, I lived in a neighborhood I grew up in, where, like almost all neighborhoods in Lisbon, drugs were a problem, plus people were dying, or at least there was that fear because AIDS infection was very high. And it’s always kept my interest. And when I studied law, I observed that interest, but there was nothing to set the bar on policy at that time in law school or criminal law. Then fast forward almost 15 years, things were starting to move and change. And it was very obvious to me, from what I had studied, read, and thought, that things would change fast on cannabis and other substances. So therefore, I shifted my practice towards opportunities in the Controlled Substances space. So, I went after clients that wanted to come to Portugal and invest in the country. And I also got involved with the so-called “brother drug policy community” in Portugal and then abroad, who were doing other things related to drug policy, drug checking, patient access, and other pro bono work. So, I have been involved in drug law in more general terms than only cannabis or just cultivation licenses, etc.
And just for our viewers, can you give us a quick overview of where things stand in Portugal as far as what you can do?
In terms of what cannabis use is like?
Is there is recreational grow? Can you sell? That type of highlight.
So, the additional calories we have are very curious; according to Portuguese law, we could cultivate cannabis since the 70s. There was medical legislation on cannabis since the 1920s, such as in treaties in the UN. Still, then a clause was introduced, unfortunately, in the 1970s to allow for the cultivation of cannabis only for conventional purposes, such as medical veterinary scientific. But, to my knowledge, the provision was not used. I have researched a little, not full historical research, but I don’t know of any cultivation licenses issued in the 70s. So, we had to wait until 2014 for the first cannabis cultivation license to be awarded in Portugal. It’s interesting to mention that that happened around the same time that Portugal also awarded licenses for Poppy, for opium poppy. In Spain, opium poppy, as you may know, is a really big culture in terms of impact and licenses. So, we tried to catch up in 2013 and 14 with Poppy that didn’t work out well.
So, we lost out to Spain in terms of scale and investment we could have attracted. But, of course, the framework is the same as for controlled substances, special authorizations, population, and then manufacture. And what’s happened is that GW looked at Portugal and got the first license. And then Tilray got the second license. And now we have around 19 awarded licenses for cultivation. Once you have the license, you can cultivate it, but there’s a different license for manufacturing/production. Then you also have the important export licenses, and there is at least one research license in Portugal, unlike Spain, where the research licenses are the norm; at least as far as I know, in Portugal.
What companies look for in Portugal is a friendly, regulatory environment, which has to do with poppy cultivation, which went well in terms of the economics of the business. Still, there was no danger, no diversion, the problem, so parties regulators were okay with that. Then they shifted to cannabis because it is probably less averse with respect to other jurisdictions, which did not have this poppy experience. And Portugal is also looking for investments. That helped to have a friendly regulatory and stakeholder framework compared to other countries. The weather is fine and qualified human resources are cheaper than in other countries, everybody speaks English, and it’s very safe. Therefore, it’s easy to attract talent to come here – master culturalist, scientist, or just the business manager to set up a factory and live in Portugal for six years or six months. It’s easy to attract people from the global pool of talents to work in Portugal. And in general, it’s not a very expensive country, in terms of setting up a factory and running it. The price of land is not very high, but we have a problem with energy prices which for cannabis can be a problem, but other than that, all the costs are relatively cheaper. So, you have qualified institutions, and we don’t have a problem with corruption. It’s the perfect mix for attracting investment in this field.
The official numbers you have are around 100 so-called pre licenses, meaning people who have submitted the license paperwork. The paperwork was okay, but now, of course, comes the big thing: making the investment and being like a funnel. Many of them will not get investment because the licenses are currently limited to cultivation. So, there are two at most because the investors did not make the investment to get the GMP manufacturer license, which, of course, is very expensive. And one thing is the PowerPoint in the business conference saying that we have GMP; the other thing is getting GMP. And in this market, there is a disparity between reality and what’s stated in websites, conferences, and a business lunch. So, it’s very expensive to get an extraction facility with GMP, which we have to get approved before manufacturing. I guess it’s only API. But I hear that now the business interest in Portugal is around creating facilities to extract for all these population sites, and even from imported cannabis.
And where’s Portugal with regard to usage? Is it recreational use or medicinal use? Is that legal?
This wave of cannabis investment started before the Portuguese medical cannabis law was updated and regulated, which only happened in 2018, and it was unanimous in the Parliament. Patients were given priority, and people understood it was important for some patients. And we have a system where the medical prescription has to pass a market authorization, and so far, only one product is authorized, which is dried flower from Tilray. The regulator says publicly there are two or three oils in the process of being approved, so we will have the first oil approved. That’s probably the next thing to approve, then doctors have to prescribe, and you have to buy from the pharmacists.
The catch here is two things. First, doctors can only prescribe a few specified symptoms, like epilepsy, Tourette Syndrome, and glaucoma. And then for pain, a broader category, such as neuropathic pain. And I believe, from my experience, that’s where most of the prescriptions are being made. It’s around pain because it’s a dried flower, so it’s not extracts. So therefore, it has to be a patient who can use the Vectorizer, etc., not kids or impaired people. And the other problem, in terms of access, is that there is no CO payment from the state reimbursement so far. If there’s a legal discussion around that if medical cannabis is illegible for reimbursement, I believe that is the spirit and the letter of the law that was approved in Parliament in 2018, but that’s not yet clear with the authorities; so, there are a few conditions and for very inexpensive products, but the law is there, the system is there. Prescriptions are being issued, and patients are being treated with medical cannabis. So that’s medical cannabis.
The other usage: adult recreational, based on the Portuguese decriminalization bill from 2000, says that you are not criminally prosecuted if you use cannabis or are caught carrying it. I’m simplifying here, but if you’re part of cannabis, that for ten days, that’s, that’s 25 grams of dried flower. But this is for personal use. So, you cannot open a dispensary or a clinic or create a retreat for selling or organizing. And people want to come to Portugal to organize retreats because it’s not a criminal offense to use psychedelics, which it is not, but it is to organize a retreat. It’s a criminal offense. So, even if there is no money exchanged, the act of promoting and organizing is in itself a crime. So, people have to be careful if they think that the current policy in Portugal allows for everything. It’s not the case. What happens, under the system, if a teenager is caught smoking a joint in public, he’ll go to a commission of psychologists or social workers, and he feels usage it’s not problematic. You’ll pay a fine. If there’s meth usage, you’ll be referred to addiction treatment or information. Almost 90% of the cases end up paying a fine.
So, that’s what we have in place, but there have been other efforts since 2002 to legalize adult use. Right now, we have two bills in Parliament advocating for adult use. And we have, for the first time in Portugal, a civil movement supporting this attitude. We had a letter published in the leading newspaper in Portugal, which was signed by 60 former ministers of education, health, defense, police, as well as scientists and other intellectuals and famous personalities, and people that don’t have any interest in the business game candidates business people that that are moderate in nature. It’s not like the normal academic policy activist. These people came forward for responsible regulation of cannabis and signed their name, which is very courageous in a country like Portugal, where things are kept a very low profile. It’s not like in Spain, where there’s a huge fight for social causes or like the best way to find referendums and ballots and grassroots movements. Portugal is quite different.
In November 2022, the department will have elections to reject the budget flow. And we’ll have a new parliament coming in on January 3, after January 30. election. And after that election, we’ll see some more pro-cannabis Parliamentarians, and when the new Parliament convenes around February, we’ll discuss cannabis. And it will be a commercial model with some restraints on the THC level, plus authorizations for the places where it can be sold. And no one seems to agree if it should occur in pharmacies, special stores, tobacco stores; there’s still a distinction to be made. But it will most likely be sold at special places, with controls for THC level and customer age, plus, I believe, marketing restrictions.
So the majority of the cultivation is done for export purposes?
Yes. And the first licenses were issued in Portugal when we did not have the proper legislation in place, and now it’s even available for domestic purchase, which is, of course, a very small market because Portugal is a very small country. And the legislation, as I told you, has a strict number of conditions. And now, as of now, no reimbursement from the thing.
And the folks advocating for adult usage or expanded use making the economic development argument of job creation, a tax base, and those types of arguments?
Yes, but the first argument is health. We have in Portugal the highest number of young people, I believe only after Spain, who smoke cannabis. It’s widespread, and, as in all countries, it’s because THC levels are rising. We are seeing more and more psychotic problems, mostly with teenage boys. That’s like the typical problem that we see. And this is happening now. Not so legalization may reduce that, that that that problem by having cannabis that athletes as a capped THC, THC level that is grown and there JCP conditions or other conditions that health authorities deem safer to the health than with the with what is on the gray market, which, of course, Poland has stated pest control levels are not controlled; that we don’t know what sorts of things; that no one knows what it is. And that also can play a role in the psychotic act.
This is the first argument being put forward due to Portugal’s number of cannabis usage; we have this problem. It’s slightly comparable, though not the same thing we had with Ireland 20 years ago. The second argument is economic development on the tax side and the budget law. And then, of course, there’s the economic and cultural impact. Portugal is not the country where you say this is great for economic development because everybody will get wealthy southern candidates. People will not like that kind of argument. It’s not according to our culture to be the main argument, to look for any end it’s cannabis and all other types of industries. In Portugal, people are still inherently suspicious of very economically liberal arguments.
And when we look at conservative countries, in an Ivy League, of course, the counterargument to that is we look at what we consider to be conservative countries, like Germany, announcing that they will likely legalize adult use. Will that help move the needle in Portugal?
If Germany goes down that route, then I’m sure it will. But, on the other hand, the medical cannabis legalization in Portugal came after the German model. Germany is, of course, a very respected country in Portugal, and it’s a conservative country.
So, if Germany is doing this, is Portugal the beacon of drug policy staying behind all these countries that took 20 years to decriminalize some usage?
So that’s also an argument in Portugal. We have to take the second step of drug policy, as we did 20 years ago. We are the poster child of drug policy. We cannot lag. We cannot afford this thing again, this time. And we are already slightly behind compared to Switzerland, compared to Canada, and we are already a bit behind. So, let’s not stay behind. And let’s hope it doesn’t happen to Portugal, as it did with the Netherlands, which was very progressive with the coffee shop regulation, but then it became a mess. The world has a better model than the Netherlands, which is ironic because they took a great step with it, with their policies, in the 70s, I believe. Portugal cannot afford to have that. Germany will be a good example. And the domino effect that will occur, I believe, around Germany, the Netherlands, Luxembourg, with all these countries will place tremendous pressure/confidence on Portugal to move forward with a policy such as this.
And with your law firm and your consulting, are you helping people navigate the licensing process? Are you advocating for adult use? What is the focus of your work?
I do a little bit of everything that you just mentioned, and when I started, no one was doing this; literally, no one was doing this. And I had this intellectual interest. I’m an academic. So I studied the situation deeply and intensely, and I read a lot about drug policy. So that puts put me in a position of being the normal guilty person in all things related to drug policy law, the law aspect, and not the drug policy specialist. So, therefore, it gave me a broad range of clients, both pro bono and non-pro bono. I help people from local companies that want to navigate and get licenses in Portugal to patients who don’t know if they can fly to Germany with their medical cannabis or fly to Portugal on holiday and bring their medical cannabis from Ireland. I advise nonprofit organizations that work globally with psychedelics, both on the legal front and the defense cases. I do very intellectually stimulating work with the Portuguese direct checking organization working from a legal standpoint. It is very interesting because there are many things that you have to sort out in terms of allowing an NGO to receive drugs, possess drugs, death threats, have analytic partners, and be in contact with people who use drugs and communicate the results. So that creates a lot of legal problems.
And it’s very interesting to say that in the German coalition treaty, or agreement announced last week, drug checking was mentioned. Fortunately, it’s very forward in drug checking, and I’d say it’s something that I like to work with because it’s helping people use drugs with minor risks or people who have already decided to use drugs. So, for example, suppose an MDMA pill is found five times the normal amount, and people might die from it. In that case, it’s very good that an alert can go to all the networks in Europe saying that kind of pill is very dangerous and could probably kill a teenage kid in a music festival or wherever.
I’m not a criminal lawyer, but I consult regarding this regulation and drug policy and treaties. So I do all that kind of advising for people from foreign governments on legislation for medical and adult use. So I’ve done pretty much everything. I also work in another area, but I don’t know if it’s your interest for this conversation, which is CBD.
That was my next question? What is Portugal’s position on CBD and cannabis and other products such as cosmetics? Are they okay, as long as the THC level is nominal?
Ironically, that’s the area where there’s more risk since CBD in Portugal, in terms of its use in cosmetics and food/food supplements, is regulated by European law. And according to European law, you cannot use CBD for cosmetics. And that’s very clear for the Portuguese authorities, but that is not very clear for the CBD people and CBD shop owners.
So, I spend a great part of my weeks mainly working pro bono, telling people that it’s illegal. Authorities can go there and close the shop; they can indict the shop owner, impound the product to inspection, etc. And that’s happening in Portugal. For the past two years, I was alone in this arena, meaning that I didn’t have any sources in the public authority saying it. Sometimes, I thought I was overly conservative, which is never the case. I was being risk-averse and concerned I had the wrong interpretation because if you walk around the cities, you see the shops and the shops are running. But that doesn’t mean it’s legal.
Then, in the last three weeks, the economic activity regulator and the agronomic regulator have issued public positions saying precisely this; that CBD cannot be used in food or food supplements until it’s approved by the FSA procedure, which has not happened yet. And until it happens, it’s not authorized. Then, of course, some of these products only make false claims, meaning they claim to be CBD, but it’s hemp oil from the seeds where we all know now that no CBD can be found. They claim they have CBD because it sells for the most profit. But they are hemp seed oil or hemp oil or whatever, and then there’s massive confusion around the cultivation, which is allowed with the minor level of THC for industrial uses.
And industrial uses are defined by practice using European regulation. And most of these people want to challenge the concept of industrial uses and try to make arguments like there’s no THC. But the problem is, as we all know when the treaties were written and translated, let’s say into domestic legislation, no one knew what THC was and what CBD was. So, the law refers to the plants and parts of the plant. Therefore, trying to extract it unless it is for industrial use is not approved. And there’s no way around this. I believe that if you go to a judge and you have a bottle of CBD drops, you won’t go to jail, but not going to jail is a result of a criminal investigation. People should not run into the risk of being subject to a criminal investigation. There are bigger purposes in life. That’s what I tell people, and to take my advice.
Ad do you believe that the public positioning on CBD is sort of the precursor to enforcement?
No, enforcement was already happening for us. CBD shops are operating, but most owners are indices, and some stock has been impounded. I want to give the public warning because it has been very confusing. And there’s this radio, which is mostly heard in Portugal by taxi drivers or older adults, and they advertise CBD on that on that radio. And people get confused, which, of course, creates social alarm and social suspicion. Therefore, these authorities came forward with a disposition, but I don’t believe they will bring more enforcement. They will at least try to prevent these shops from opening. This is happening all over Europe, and it’s not a purchase problem.
I believe this will create pressure for FFA to solve that; to be quick in solving this novel foods procedure. As a result, if CBD’s toxicity, it will not be allowed. If there is no toxicity, however, then it should be allowed because it’s about public health and the health of everybody that’s around. All the studies that have been made testing the products, those found in those shops around Europe, have found some CBD in them, but some do not have CBD at all, and some have more THC than the limit; some do not have any at all. It’s an unregulated market.
And I don’t believe that it’s safe for citizens to have an unregulated market in any consumption area. So therefore, it’s clear that we need standards; we need labeling that people can understand. But unfortunately, so many players who tried to enter the market were opportunistic. They made claims, or they were making claims about what the product was, what the outcome could do. And therefore, you saw products with a CBD label, but there was nothing in them. They’re making outrageous medical claims that it’s going to cure everything. So, we need to avoid that.
Where do you think you will focus in 2022 on these efforts?
I believe in 2022; we’ll place a lot of effort around recreational use and attitudes because, in Portugal, the law will be enacted. I think there will be a lot of contractual and commercial work around supply for extraction, contracts for extraction, and manufacturing contracts. So, the cannabis ecosystem verges into what we find in the pharma business. I believe that will happen in Portugal, more exports and imports. And that’s probably the largest portion of the work I see changing. I don’t think that we will have much more around cultivation unless, of course, legalization in Germany will increase the possibility of exporting to Germany for the adult-use market.
So if folks are interested in what you’re doing and want to follow what you’re doing, where can they find you?
My website is www.gamagloria.com, or they put my name with the word cannabis on Google. It seems that it’s your job also to work on digital marketing. So I’m connected to Cannabis.
And we will make it a point to put your website in the link below and some of the other references you mentioned. We appreciate your time today, and we look forward to great things in Portugal. Hopefully, we’ll see the needle move maybe after Germany legalizes adult use.
I hope so. We do. So thank you very much.