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23.09.2019

How to Successfully Launch a Legal Cannabis Business in Macedonia? (FAQ)

Sandra Velovska Partner, Health, Public Offerings, Private Placements & Corporate Governance & Compliance

Looking for information for cannabis industry startup guide? These FAQs might help you get started on the path to opening your own cannabis business in Macedonia.

  • How do you start a cannabis business in Macedonia?

To lunch a cannabis business in Macedonia first you need to establish a local company and just like in most European states, the limited liability company is the preferred business structure for all kinds of activities in Macedonia. The easy incorporation process allows investors to set up their operations in a fast and reliable manner. One should bear in mind that the minimum share capital for this entity is set at EUR 5,000 and can be deposited in a Macedonian bank account. A limited liability company in Macedonia can be established by at least one stockholder and a maximum of 50 members. Because the market is welcoming and the business field anticipates the needs of foreign investors, one can buy ready-made companies which can be used as soon as the ownership has been granted and accepted by the Central Registry of the Republic of Macedonia.

As soon as you establish or acquire ready-made company as foreign investor you must register the company as foreign investment in the Registry of Direct Investments, which records all investments invested in money or assets that a foreign investor has made in Macedonia.

  • How do you find hemp land to open a plant for production? 

Finding cannabis and hemp land for sale/lease can be extremely time-consuming and sifting through thousands of listings for greenhouses and while searching it is important to line up with the right partners. Cannabis can be grown outdoors, on natural soil or it can be grown indoors. Industrial properties for cultivation of indoor-grown cannabis allows for more control over your product, limiting the amount of variables that could disrupt a grow cycle, like bad weather, temperatures, animals and destructive bugs. The industrial properties are in high demand and the sale purchase price per m2 usually ranges from 3 Euro and above.  Knowing which land would be perfect for your needs is an important factor when looking to buy cannabis property. Like an investor buying stock, do your due diligence on prospective sellers. We search for both indoor and outdoor cultivation properties zoned for cannabis use. We assure our clients that each outdoor/indoor property you view meets all legal qualifications that make it eligible for cultivation.

When you sign the SPA agreement your property ownership rights must be transferred and registered in the Cadaster or real estates of Republic of Macedonia, upon which you will be issued with Property Deed.

  • Where do you obtain a cannabis cultivation license?  

To obtain a cannabis cultivation license, you will have to go through several regulatory bodies in the state. The inspection/supervision control whether you fulfill the legal requirements is done by the Commission established within the Ministry of Health and if acceptable, the Ministry ex officio, addresses the application before the Government of the Republic of Macedonia to approve the license.

Before commencement of cannabis cultivation, the legal entity submits a Request for cannabis sowing/planting to the Ministry of Agriculture, Forestry and Water economy which grants a Permit for sowing/planting (depending whether seeds are sowed or seedlings are planted). To obtain cannabis production license, one must file application before the Agency for drugs and medical devices.   

  • What supporting documents do you need to obtain cannabis cultivation license? 

Your license application must be supported with the following documentation: 

1. Company registration certificate issued by the Trade register – Central Register of Republic of Macedonia. The certificate should not be older than six months.  

2. Property list as proof of ownership of the facility/land, or facility/land lease agreement

3. Technically-Technological Elaborate – Extensive Site Master File

4. Proof of paid administrative tax and other costs associated with obtaining a license

5. Proof of staff
 

  • What other technical conditions does your cannabis business need?

The legal entity is obliged to:

  • Have adequate space, surfaces or land for cultivation, drying, and  storage of cannabis, equipped accordingly to the production; i.e. a processing capacity of the legal entity for cannabis cultivation; the space should be atmospherically protected and enclosed with at least 4-metre-high fence, with brinov element in front of the fence in three rows of buckets and a barbed wire above the fence;
  • Have a 24-hour video surveillance over the whole space;
  • Have a 24-hour presence of physical security;
  • Have at least four employees out of which at least one person is a graduated pharmacist with at least three years of work experience in the field of pharmacy and at least one person is a graduated agronomist – agriculture program with at least three years working experience in the field.
  • What products can you sell and export? 
  • According to the current version of the law, in force since 2016, you can only sell cannabis oil as final product, NOT dried flower. Our country does not have limitations regarding EU countries, USA or Canada or etc. for exporting cannabis oil. Export of dried flower is envisaged to be allowed very soon upon enacting the new cannabis law which at the moment is considered to be government priority alongside with EU accession negotiations with our country, which is a candidate country since 2005 .  
  • How much do application license fees cost?
  • The administrative fees for the cannabis license cost approximately 5 Euro for proceeding before the Ministry of Health and the Government. However, one should bear in mind the attorney’s fees that should be covered, fees for preparation of Technically-Technological Elaborate, fees for translation of documents, Notary fees which can vary from case to case depending on the investment.    
  • How can I guarantee my cannabis business will be licensed?
  • There is no guarantee your cannabis business will be licensed but following our guidelines to the best of your ability will increase your chances. A strong team and good business plan are a must, backed up by realistic financials and a source of funding that makes your project credible. Identifying your specific priorities in respect of our regulators and tailor your company and plan to suit them greatly increases your chance of getting a license; however, obtaining a license is never a guarantee. 
  • How can investors learn the cannabis law and run the business?
  • Besides conducting your own research, it is crucial to engage an experienced attorney when starting a cannabis business. Ideally, you will want to develop a relationship with an attorney who helps educate you on the applicable laws. Entering the cannabis industry without legal counsel is especially risky given the ever-changing laws in our country and especially now when everybody wants to turn Macedonia into a nation of cannabis farmers. We provide you one-stop shopping for your legal needs to run cannabis business in Macedonia, starting from corporate governance, compliance and licensing, accounting and financial, marketing and branding, investing and connection.

As our Health Care Minister Dr. Venko Filipche says: “If we want to raise economy in Macedonia, cannabis is the way to boost it.”, since Macedonia is the only country in the region that has legalized cannabis cultivation and production of hemp extracts for medical purpose. Welcome and invest in Macedonia and contact us!