As the European medical cannabis market has developed, expanded and matured over the last half-decade, Portugal has played a critical role in the global supply chain, earning a reputation as the ‘doorway to Europe’.
Dried flower from Canada, Colombia, Thailand and a swathe of other global exporters has been diverted through the Portuguese processing hub for the majority of the European market’s existence.
Its dominance, built on a forgiving regulatory framework, low costs and a cluster of EU-GMP processing facilities, is now under pressure.
As Business of Cannabis reported earlier this week, Canadian export figures from the last 18 months show that Portuguese flower imports from Canada collapsed 86.6% from their peak of CA$12.4 million in April 2025 to just CA$1.67 million in February 2026, while exports directly to Germany skyrocketed.
Dual enforcement crackdowns, Operation Erva Daninha in Portugal last May and a sweeping series of raids across North Macedonia in February, have been a driving force behind this shift.
The fallout has been tangible. Export permits in Portugal, previously processed within a month, stretched to 70 days or more in the aftermath of the raids. In North Macedonia, where over 40 tonnes were seized from licensed entities, all 43 permitted producers are now under inspection.
Now, exporters are in search of a new market to fill this gap, one free of the uncertainty increasingly associated with both of these processing hubs.
Americo Folcarelli, co-founder of Extraction Solutions, an EU-GMP certified contract manufacturing organisation based near Alicante, has spent three years building the kind of facility he believes Portugal’s rapid expansion never properly prioritised.
“I saw this coming a year ago,” he told Business of Cannabis. “Which is why we’re doing this in Spain.”
His company was initially built as an API play, focused on distillate purification and extraction. However, when the ‘warning signs’ from Portugal began to accumulate, it pivoted toward CMO services.
“Our sales pitch is we are not Portugal, we are not North Macedonia, and we’re in Europe. That’s it,” he continued.
The contrast with Portugal’s regulatory experience is pointed. Where Infarmed’s export permit process deteriorated to between six and ten months at its worst following last year’s raids, Folcarelli describes a markedly different dynamic with Spain’s regulator, AEMPS.
A recent first import permit, expected to take up to nine weeks, was processed in under three, with AEMPS proactively contacting Health Canada to expedite verification rather than waiting on documentation.
Noting that his industry counterparts often warn of lengthy delays when dealing with Spanish authorities, he notes that in his recent experience, ‘the professionalism shown by our regulator has been a breath of fresh air.’
Spain is already a major cultivation hub, producing an estimated 23.4 tonnes of medical cannabis in 2023. Around seven companies hold commercial cultivation licences, with operators like Linneo Health, Medalchemy and Canadmedics already exporting significant volumes across Europe.
However, it is still in its infancy as a processing hub. Extraction Solutions currently operates at a processing capacity of around 1.6 tonnes per month. For context, in the first six months of 2025, Portugal exported around 27,00kg.
Folcarelli is upfront about this gap, but argues that the gradual shift away from these historic hubs will be diversified.
“What you’re going to see is a shift from Portugal and Macedonia to somewhere else. Instead of having one place that I’m sending everything to, you say hey, I’m going to de-risk. One is zero, two is one. If you only have one logistical route, you have nothing.”
There is currently, by Folcarelli’s own assessment, only one credible EU-GMP-1 release facility operating in Spain. While this is a clear commercial opportunity, it is also a constraint that will likely be on the radar of exporters seeking supply chain resilience.
With the shift away from Portugal in recent months, the country’s processing infrastructure is now pivoting to meet these new demands.
Arthur de Cordova, CEO of Zeil and a close observer of European supply chain dynamics, notes a significant shift among Portugal’s remaining GMP operators. Where a year ago, 80% of their business was GMP washing of imported product, many have flipped to a white label model, drawing on multiple domestic GACP farms to fulfil bespoke orders from German wholesalers under the wholesaler’s own brand.
The GACP farmers in Portugal are getting better and better at getting their upstream processes in place,” de Cordova said. “The GMP operator says, here’s my spec. I want it this tight on microbials, this potency, this terpene profile. That’s what my wholesaler in Germany wants. And if you hit this spec, I will buy as much as possible at this price. All the farmers are competing against each other to meet that spec at the best price.”
Where Spain diverges most sharply from Portugal’s model is in the shape of its domestic market. The country’s forthcoming medical cannabis framework is expected to exclude flower from prescription, channelling patients instead toward standardised extracts, including tinctures, capsules, and vapes.
For Folcarelli, whose facility is built around distillate purification rather than flower processing, this is a feature rather than a bug. Physicians, he argues, are resistant to prescribing flower precisely because consistent dosing is impossible to guarantee. A patient given a 10-gram prescription can exhaust it in two days and seek more elsewhere.
“Spain is saying: we have social clubs, if you want to smoke cannabis you can. Now, if you’re telling us it’s medicine, you’re going to have to convince us. And if we’re going to do a prescription, then we want it done consistently, always done in a laboratory.”
This emerging tension between flower and what is colloquially called ‘cannabis 2.0’ products is already playing out across global medical markets, including Germany, the UK, France and Australia, and is likely to become a defining feature of the future development of the industry.
“While everyone’s going to be fighting over flower,” Folcarelli said, “we’re going to be looking ahead.”
Whether Spain can capitalise on this new opportunity remains to be seen, but the diversification of the flow of medical cannabis into Europe is something that will only accelerate as the market develops, especially if it continues to lean towards pharmaceutical standards.
What Spain has that Portugal lacked at an equivalent stage, Folcarelli argues, is the benefit of hindsight. “We get to start with a clean slate. We’re not going to say yes to everybody.”
The post Is Spain Set to Become the Next European Cannabis Processing Hub? appeared first on Business of Cannabis.
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Dried flower from Canada, Colombia, Thailand and a swathe of other global exporters has been diverted through the Portuguese processing hub for the majority of the European market’s existence.
Its dominance, built on a forgiving regulatory framework, low costs and a cluster of EU-GMP processing facilities, is now under pressure.
As Business of Cannabis reported earlier this week, Canadian export figures from the last 18 months show that Portuguese flower imports from Canada collapsed 86.6% from their peak of CA$12.4 million in April 2025 to just CA$1.67 million in February 2026, while exports directly to Germany skyrocketed.
Dual enforcement crackdowns, Operation Erva Daninha in Portugal last May and a sweeping series of raids across North Macedonia in February, have been a driving force behind this shift.
The fallout has been tangible. Export permits in Portugal, previously processed within a month, stretched to 70 days or more in the aftermath of the raids. In North Macedonia, where over 40 tonnes were seized from licensed entities, all 43 permitted producers are now under inspection.
Now, exporters are in search of a new market to fill this gap, one free of the uncertainty increasingly associated with both of these processing hubs.
A different kind of hub
Americo Folcarelli, co-founder of Extraction Solutions, an EU-GMP certified contract manufacturing organisation based near Alicante, has spent three years building the kind of facility he believes Portugal’s rapid expansion never properly prioritised.
“I saw this coming a year ago,” he told Business of Cannabis. “Which is why we’re doing this in Spain.”
His company was initially built as an API play, focused on distillate purification and extraction. However, when the ‘warning signs’ from Portugal began to accumulate, it pivoted toward CMO services.
“Our sales pitch is we are not Portugal, we are not North Macedonia, and we’re in Europe. That’s it,” he continued.
The contrast with Portugal’s regulatory experience is pointed. Where Infarmed’s export permit process deteriorated to between six and ten months at its worst following last year’s raids, Folcarelli describes a markedly different dynamic with Spain’s regulator, AEMPS.
A recent first import permit, expected to take up to nine weeks, was processed in under three, with AEMPS proactively contacting Health Canada to expedite verification rather than waiting on documentation.
Noting that his industry counterparts often warn of lengthy delays when dealing with Spanish authorities, he notes that in his recent experience, ‘the professionalism shown by our regulator has been a breath of fresh air.’
Spain is already a major cultivation hub, producing an estimated 23.4 tonnes of medical cannabis in 2023. Around seven companies hold commercial cultivation licences, with operators like Linneo Health, Medalchemy and Canadmedics already exporting significant volumes across Europe.
However, it is still in its infancy as a processing hub. Extraction Solutions currently operates at a processing capacity of around 1.6 tonnes per month. For context, in the first six months of 2025, Portugal exported around 27,00kg.
Folcarelli is upfront about this gap, but argues that the gradual shift away from these historic hubs will be diversified.
“What you’re going to see is a shift from Portugal and Macedonia to somewhere else. Instead of having one place that I’m sending everything to, you say hey, I’m going to de-risk. One is zero, two is one. If you only have one logistical route, you have nothing.”
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There is currently, by Folcarelli’s own assessment, only one credible EU-GMP-1 release facility operating in Spain. While this is a clear commercial opportunity, it is also a constraint that will likely be on the radar of exporters seeking supply chain resilience.
With the shift away from Portugal in recent months, the country’s processing infrastructure is now pivoting to meet these new demands.
Arthur de Cordova, CEO of Zeil and a close observer of European supply chain dynamics, notes a significant shift among Portugal’s remaining GMP operators. Where a year ago, 80% of their business was GMP washing of imported product, many have flipped to a white label model, drawing on multiple domestic GACP farms to fulfil bespoke orders from German wholesalers under the wholesaler’s own brand.
The GACP farmers in Portugal are getting better and better at getting their upstream processes in place,” de Cordova said. “The GMP operator says, here’s my spec. I want it this tight on microbials, this potency, this terpene profile. That’s what my wholesaler in Germany wants. And if you hit this spec, I will buy as much as possible at this price. All the farmers are competing against each other to meet that spec at the best price.”
The extract question
Where Spain diverges most sharply from Portugal’s model is in the shape of its domestic market. The country’s forthcoming medical cannabis framework is expected to exclude flower from prescription, channelling patients instead toward standardised extracts, including tinctures, capsules, and vapes.
For Folcarelli, whose facility is built around distillate purification rather than flower processing, this is a feature rather than a bug. Physicians, he argues, are resistant to prescribing flower precisely because consistent dosing is impossible to guarantee. A patient given a 10-gram prescription can exhaust it in two days and seek more elsewhere.
“Spain is saying: we have social clubs, if you want to smoke cannabis you can. Now, if you’re telling us it’s medicine, you’re going to have to convince us. And if we’re going to do a prescription, then we want it done consistently, always done in a laboratory.”
This emerging tension between flower and what is colloquially called ‘cannabis 2.0’ products is already playing out across global medical markets, including Germany, the UK, France and Australia, and is likely to become a defining feature of the future development of the industry.
“While everyone’s going to be fighting over flower,” Folcarelli said, “we’re going to be looking ahead.”
Whether Spain can capitalise on this new opportunity remains to be seen, but the diversification of the flow of medical cannabis into Europe is something that will only accelerate as the market develops, especially if it continues to lean towards pharmaceutical standards.
What Spain has that Portugal lacked at an equivalent stage, Folcarelli argues, is the benefit of hindsight. “We get to start with a clean slate. We’re not going to say yes to everybody.”
The post Is Spain Set to Become the Next European Cannabis Processing Hub? appeared first on Business of Cannabis.
Continue reading...
