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Yesterday the Danish Ministry of Health announced the extension of the pilot programme for medical cannabis. All political parties have promised to support it:
“It has been agreed that the trial scheme with medical cannabis will be extended for four years with regard to doctors’ possibility to prescribe medical cannabis to patients. It has been agreed that the pilot scheme will be made permanent with regard to the possibility for companies to grow cannabis for medical use.”
DanCann was founded right after the Danish medical cannabis pilot programme was initiated in January 2018. In our initial coverage, we wrote:
The published evaluation suggests four possible scenarios when the pilot programme ends in December 2021:
- The programme will continue as evidence of positive effects is still needed.
- The programme will be made permanent.
- Part of the programme will continue and be made permanent in parts. The programme will continue regarding prescriptions to patients and the programme will be made permanent regarding cultivation and export of medicinal cannabis.
- The programme will be terminated.
Now it is clear that the third option was chosen. The best possible outcome would have been to make the programme permanent, but this outcome is almost as good. It removes any doubts concerning the possibility to grow and handle medical cannabis in Denmark for an international market. In theory, it might be permitted to cultivate medical cannabis in Denmark but not to sell it in country. However, this seems implausible. We believe this means that it is just a matter of time before medical cannabis becomes permanently permitted in Denmark, though the exact conditions remain to be seen. Even though no-one expected the programme to be terminated, the result that was announced yesterday implies a certain de-risking of the business model.
The Danish Ministry of Health also announced that it will discuss reimbursements for patients during the next year. This is an important factor as higher reimbursement will make medical cannabis more affordable. Today, only 50 percent of the costs up DKK 20 000 are reimbursed. One remaining issue is that only one medical cannabis product per year can be approved under the programme. If medical cannabis is to take off in Denmark, this number has to be increased.
Carlsquare recently initiated coverage of Dancann Pharma with a fair value per share of DKK 6.5.
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