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Portugal Punts (Temporarily) on Cannabis Reform as Government Collapses

Portugal is likely to fall behind in the EU’s discussion on recreational cannabis reform. Budget wars will not be antipathy towards the possibility of full legalization. The country’s 2022 budget had included tax cuts and increased public investment to stimulate the economy post COVID. Both the Right and Left-leaning parties opposed it. In late October, such political opposition to the budget proposed by Prime Minister António Costa triggered a final meltdown of the coalition that has governed here since 2015. 

The right-leaning President Marcelo Rebelo De Sousa dismantled the government two years earlier than expected, a rare event in Portugal. On January 30, next year, national elections will take place.

What happens next, even on the cannabis discussion, is anyone’s guess. It is unlikely, however that any new government will stop forward cannabis reform. This country is interested in the growth of this sector. The licensing process for the medical sector has not been easy, but it’s clearly moving forward.

What is the significance of Portugal in European Cannabis Discussions?

Portugal is famous for its liberal approach to all drugs, although it is inaccurate to say that everything has been “decriminalized.” There have been various attempts to reform the country’s drug policy ever since the 1970s. Although cannabis has been legalized in Portugal, medical marijuana cultivation is booming since 2017.

A bill to legalize cannabis for personal use was introduced by the Left Bloc (Liberal Initiative) in June. It was sent to the Health Commission for discussion. Due to multiple requests for postponement, this debate did not take place.

After the government was disbanded, legislation needs to be brought back by the new government.

Portugal is playing a greater role in European cannabis discussions since 2017 when Tilray started construction on their cannabis facility. This, so far at least, is less about the liberalization of policy domestically and more about the ability to obtain cultivation licenses (although this too is not as “easy” as many in the industry have infamously claimed). The Netherlands has the highest number of operating, regulated cultivation plants and licenses outside of Holland. They are also all GMP varieties and internationally-regulated unlike the Dutch.

As things stand, the market is heavily geared toward the production and extraction of cannabis for export. The country is, in fact, on par with Greece, emerging African cannabis cultivators economies and Greece for cost per gram of both extracts and production.

How would a Portuguese Rec market actually impact?

Evidently, a tourist market in this area would be beneficial to the wider economy as well as the tourist industry. It could also create a boom market that has a Canna flare.

However, this is not to say that the idea of home-growing cannabis in a country where Luxembourg has been the most progressive (in terms of cannabis reform) might seem a little too far. They have chosen to slow down the conversation and provide a provision for growing cannabis at home (along with supporting an regulated market for cannabis seeds).

After Europe is freed from the next hard COVID winter it’s likely that such sensibilities will be overwhelmed by politicians and politicians looking to stimulate economic activity in every way possible. This conversation is a perfect fit for that purpose, regardless how contentious and controversial economic development in Greece with cannabis flair remains (at the least within EU). Since 2004, the reputation of the medical industry has improved. The estimated tax revenues that will result from the official development of this market are part of the reason why even the German government considers doing the same.

The bottom line: Portugal is not the ex-outlier on this topic. It may even fall behind other EU countries, including Luxembourg and Germany.

That said, the development of a fully legit market here will undoubtedly continue to impact the entire industry across the continent—starting with sourcing medical production bound for elsewhere, but undoubtedly, as the entire discussion progresses, recreational cannabis products too.