Medical Сannabis Production in Ukraine: Market, Investments, Prospects
The legalization of medical cannabis in Ukraine in August 2024 was an important step for the development of the pharmaceutical industry. The law has opened access to alternative treatments for patients and created opportunities for investors in a promising new industry. As an expert with many years of international experience in the medical cannabis industry, I would like to share my vision of the key aspects of business organization, regulation and market prospects.
About the Author
My name is Viktor Topchii and I have over four years of experience in the medical cannabis cultivation and processing industry. I began my career in Portugal, where since 2020, I have been involved in launching and scaling production processes. I managed to go from developing the first test batches to establishing a full-scale commercial production with the supply of products to Europe, the UK and Australia —an operation that continues to thrive today. My specialization encompasses optimizing agronomic growing technologies, managing all stages of cultivation and subsequent processing, designing production facilities in accordance with GACP and GMP standards, as well as implementing quality management systems. Today, I focus on consulting, helping entrepreneurs and investors launch and optimize medical cannabis production in Ukraine and abroad. In this article, I will share key aspects of organizing this business and its prospects.
Global Experience and Prospects of the Medical Cannabis Market
Global Market. The global medical cannabis industry is experiencing rapid growth. Forecasts indicate that the market’s compound annual growth rate (CAGR) will be between 20-30% over the next five years.
European Market. Europe is experiencing an active development of the medical cannabis industry: Germany, which legalized medical cannabis in 2017, remains the largest European market. It is followed by Italy, Poland, Great Britain, and the Czech Republic.
Portugal, where I gained my production experience, is not the largest consumer but is positioned as one of the key European producers and exporters. I witnessed the evolution of the industry firsthand—from the first experimental sites to modern high-tech production facilities certified to the highest international standards. During this time, a developed ecosystem has formed, including producers, distributors, research laboratories, consulting companies, and other diverse companies providing services within this industry. A similar path likely awaits the Ukrainian market.
Medical Cannabis Production: Key Aspects
Cultivation and Agronomic Technologies
Growing medical cannabis differs significantly from traditional agriculture. It is a high-tech process that requires creating a controlled environment to ensure stability and predictability in the quality of the final product. Key parameters that are controlled: temperature, humidity, intensity and spectrum of lighting, CO₂ concentration, ventilation. All these factors affect plant growth and the content of cannabinoids and terpenes.
Modern irrigation systems allow precise control of nutrient delivery to plants, which directly affects the biochemical profile of the final product. Plant protection in medical cannabis production has its specifics—the use of chemical pesticides is largely unacceptable. Therefore, biological protection systems and strict biosecurity protocols are applied. Plant genetics is another critically important aspect. To find optimal genotypes for commercial cultivation, the following main criteria must be considered: genetic stability, disease resistance, yield, and the required cannabinoid profile.
Quality Assurance and Compliance with Standards
GACP (Good Agricultural and Collection Practices) – regulates cultivation and primary processing.
GMP (Good Manufacturing Practices) – controls further processing and pharmaceutical production.
GACP regulates all aspects of growing and primary processing of plant materials, requiring the implementation of a comprehensive documentation system that records each stage of the production process.
The GMP standard applies to further processing, extraction, and production of APIs or finished pharmaceutical forms. The key concept of GMP is quality control at all stages of production, not just the final product. It is much stricter and requires validation of all production processes, confirming their ability to consistently ensure the specified level of pharmaceutical product quality.
Implementing these standards is a complex and resource-intensive process, but it ensures that the final product meets all safety and efficacy requirements.
Analytical Control and Laboratory Research
Each batch of products undergoes thorough laboratory testing for active substance content and the absence of contaminants. High-tech analytical equipment is used to control the content of cannabinoids, terpenes, pesticide residues, heavy metals, mycotoxins, and microbiological purity. In Ukraine, laboratory studies of medical cannabis are conducted exclusively by state laboratories. This ensures strict state control and prevents the illegal circulation of narcotic substances.
Logistics and Commercial Operations
Medical cannabis logistics has its peculiarities related to the special legal status of the product. Each batch that is exported or imported is accompanied by a package of documents, including export and import licenses, certificates of analysis, GMP compliance declarations, and other regulatory documents. Transportation of medical cannabis also has its specifics. Most products require maintaining a certain temperature regime, and a high level of security is mandatory. Based on my experience, I recommend involving specialized logistics partners who have experience working with similar products and the necessary permits.
Prospects for the Development of the Cannabis Industry in Ukraine
Ukraine’s potential in medical cannabis production is based on several key factors. First, it is the availability of qualified personnel in related fields—agronomy, pharmaceuticals, biotechnology—who can be adapted to work in the medical cannabis industry. Another advantage of Ukraine is relatively low operating costs compared to Western European countries. This includes the cost of electricity, labor, and renting or purchasing land for production facilities. Meanwhile, Ukraine’s geographical location is favorable for exports to both European Union countries and other regions.
Recommendations for Potential Investors
Based on my experience in the industry, I would like to share a few recommendations for those considering investing in medical cannabis production in Ukraine.
Detailed business plan. Underestimating the complexity of the project and the necessary investments is a typical mistake for beginners in this industry. It should include not only capital expenditures for construction and equipment but also operating expenses for the first few years.
Careful planning of production facilities taking into account GACP and GMP requirements. Proper design of premises, engineering systems, personnel, and material flows from the very beginning will avoid expensive rework in the future. Design should definitely be entrusted to specialists with experience in creating similar facilities.
Focus on quality from the start. Investments in a quality management system, including the development of documentation and procedures, should be a priority. Product quality is a key factor in competitiveness in the international market.
Building a strong team by involving specialists for their training who have experience in the medical cannabis industry or related fields.
Development of a marketing strategy. The Ukrainian medical cannabis market will develop gradually, so export orientation is also appropriate.
Conclusion
Medical cannabis production in Ukraine is a promising direction for business that can provide not only financial returns for investors but also social benefits in the form of patient access to innovative medicines. Ukraine has all the necessary prerequisites for the development of this industry, and a window of opportunity is now opening for entrepreneurs and investors. By adhering to international quality and safety standards, Ukrainian producers will be able to take a worthy place in the global medical cannabis market.