Hellenic Dynamics Partners with Demecan, Shifts Away from EU-GMP Certification

Hellenic Dynamics, the pioneering medical cannabis cultivator listed on the London Stock Exchange, has entered into a significant supply agreement with German distributor Demecan. This move marks a pivotal shift in Hellenic's business strategy as it opts to bypass the costly and complex process of obtaining EU Good Manufacturing Practices (GMP) certification for its Greek facilities. Instead, Hellenic will focus on producing cannabis under Good Agricultural and Collection Practices (GACP) and selling it to distributors with their own EU-GMP certified facilities

The decision has sparked a debate within the cannabis industry, with some viewing it as a strategic move while others criticize it as a potential compromise on quality standards. EU-GMP certification has long been considered essential for the final processing stages of medical cannabis products in Europe, serving as a key to market entry and investment opportunities. However, Hellenic's CEO, Davinder Rai, argues that the impact on revenue will be negligible, emphasizing the cost and time savings achieved by this new approach

Rai further explains that the cannabis industry is evolving from 'cannabis 1.0' to 'cannabis 2.0', where distributors have invested heavily in their own EU-GMP certified facilities. This shift allows them to purchase GACP cannabis and handle the final processing themselves, thus reducing the burden on cultivators. Rai compares the current state of the cannabis industry to the beer industry, where different players handle cultivation, processing, distribution, and sales

The move by Hellenic Dynamics reflects broader trends in the cannabis industry, where the application of EU-GMP standards has been a matter of debate. Critics argue that the current emphasis on EU-GMP certification as a quality and safety indicator overlooks other crucial aspects of cannabis production. Lawrence Purkiss, a senior analyst at Prohibition Partners, notes the ambiguity around the application of EU-GMP standards and suggests that the focus should be on a broader range of quality indicators

Looking ahead, Hellenic Dynamics' strategy could influence other non-European cannabis cultivators facing the challenges of EU-GMP certification. The practice of importing GACP cannabis for final processing in EU-GMP facilities is becoming more common, though it raises questions about regulatory compliance and quality assurance. As the cannabis market continues to evolve, companies like Hellenic Dynamics may lead the way in redefining industry standards and practices