Foreign investors interested in cultivating medical cannabis in CyprusOctober 20, 2019
Andria Andreou, President, Cyprus Cannabis Association (CYCA)December 16, 2019
The bidding process to cultivate medical cannabis in Cyprus is stalled after government authorities requested a review of the licensing fees.
The delay, reported by the Phileleftheros newspaper, stemmed from concerns the fees are too low given the revenue growers are expected to reap.
According to previous announcements, winners of the application process would have to pay an initial fee of 500,000 euros ($551,038), followed by an annual renewal fee of 30,000 euros.
Only three licenses will be up for grabs in the application process, the first since Cyprus approved a law last February allowing the domestic cultivation of medical cannabis.
At the end of October, Phileleftheros reported that the Ministry of Health was ready to announce the application process.
But the Treasury and the Auditor General’s Office determined that licensees will “make millions on a yearly basis” while paying only 30,000 euros per year in government fees.
According to the Cyprus newspaper, the Treasury first raised the issue, saying that “the profit margins of the selected bidders would be enormous and estimated to reach tens of millions annually.”
A re-examination of the fees is now expected before an application process officially begins. Fees might be calculated using a percentage of revenue instead of only a fixed amount.
The preliminary draft criteria might be submitted to public consultation at the request of the Auditor General’s Office.
Pharmaceutical Services of the Ministry of Health noted the fees are higher than those in other countries and that the government would financially benefit from the monopoly on imports, exports and wholesale of medical cannabis, Phileleftheros reported Saturday.
Once the application process is announced, companies will have three months to submit their documents. The winners are expected to be announced “by the end of the first half of 2020.”
Applicants must prove they have at least five years of experience growing medical cannabis.
More details about the fees, how the government monopoly will work and the application requirements are expected in the coming weeks.