Is Portugal About to Lose its Position as the ‘Gateway’ to Europe’s Largest Cannabis Markets?

Over the last five years, Portugal has built a reputation as the medical cannabis ‘doorway to Europe’, the go-to hub for countries from North and South America, Asia and Oceania to ship their cannabis to and have it distributed to Europe’s most active markets.

Although it is now the largest exporter of medical cannabis in Europe, a fraction of the cannabis grown, processed or imported into Portugal goes towards its highly restrictive domestic market, which, according to Prohibition Partners, is set to be worth just €280,000 this year.

The latest figures show that between January and August 2025, Portugal exported more medical cannabis than the entirety of 2024, driven almost entirely by Germany’s demand and Canada’s supply.

Despite these runaway growth figures, behind the scenes, Portugal’s dominance as the de facto gateway into Europe is beginning to deteriorate.

According to Arthur de Cordova, the CEO and Co-Founder of Ziel, this is due to two key factors: ‘market pricing and self-inflicted wounds’.

The Portugal import-process-export dynamic

Since implementing its medical cannabis framework in 2018, Portugal has built one of the most commercially accessible regulatory environments in Europe.

Under Ministerial Order 83/2021, companies are permitted to cultivate, manufacture, import, and export cannabis products for medical use, provided they demonstrate compliance with both Good Agricultural and Collection Practices (GACP) and Good Manufacturing Practice (GMP) standards.

Aside from its relatively low costs, geographical location and temperate climate, these regulations have allowed it to serve as a GMP compliance and re-export hub for cannabis produced elsewhere.

Given the time and capex required to build out EU-GMP processing facilities, many businesses outside Europe operate under GACP rather than GMP standards, meaning their products cannot enter tightly regulated European markets directly.

From Prohibition Partners

Shifting dynamics

This dynamic, which has proven lucrative for the half-dozen EU-GMP processing facilities operating in Portugal while the European market flourished, is now being challenged. One key reason is pricing.

Cordova continued: “German wholesalers will pay roughly €3 per gram. They don’t care whether it comes via Portugal or directly from a GMP facility in Canada, as long as it meets compliance.”

“Now imagine a Colombian GACP farmer. They don’t have many options, so they’re forced to go through these Portuguese ‘washers’.

“GMP washing generally costs €0.60 per gram, and decontamination about €0.40 per gram, so the supplier is paying roughly €1 per gram in processing costs. Colombian growers, whose production costs are maybe €0.50–€0.80 per gram, are effectively losing 20–30% of their gross margin just by going through Portugal.”

While the upfront expense and 12-18 month licensing time have previously put these farmers off building their own EU-GMP processing facilities, according to Cordova, many are now saying ‘screw that, I’ll build my own facility licensed in Colombia and go vertically integrated…’

“The margins justify it, so the payback is quick. Colombia and Thailand are moving this way.”

Self-inflicted wounds

The second major factor was the Portuguese authorities’ Operation Erva Daninha (Weed), a major enforcement action which involved more than 70 search warrants across Portugal and Europe, leading to several arrests and the seizure of over 7 tonnes of cannabis and €400,000 in cash

In May 2025, local police forces launched the operation, targeting criminal organisations allegedly using licensed pharmaceutical and export companies to falsify documentation and move product into the black market, exposing regulatory gaps in Portugal’s rapidly expanding medical cannabis sector.

While regulators and compliant operators welcomed the action as necessary to protect the industry’s credibility, the aftermath has strained the legitimate supply chain. Export permit approvals, previously processed within a month, are now taking up to 12 weeks, slowing trade and frustrating international partners.

Arthur de Cordova, CEO, Ziel

Industry executives, including SOMAÍ Pharmaceuticals CEO Michael Sassano, warned that these delays could undermine Portugal’s status as Europe’s primary processing and export hub unless Infarmed streamlines oversight and restores market confidence.

“That blew up in  (Portugal’s Cannabis regulator) Infarmed’s face,” Cordova asserted.

At the annual PTMC conference in Lisbon, Dr Vasco Bettencourt, Infarmed’s Director of Licensing, sought to reassure delegates that the incident was an isolated one and not reflective of Portugal’s wider cannabis industry.

While Cordova said he gives Dr Battencourt ‘a lot of credit for showing up an owning it’, the rest of the market now ‘paying the price too’.

“Export permits have gone from 30 days to 70-plus days, which is a huge delay.  If you’re a GACP grower in Canada and you send your product to Portugal for GMP processing, it’s now sitting for months before moving to Germany or the UK. The money is getting held up, people are frustrated, and they’re making business decisions to go elsewhere.”

Knock-on impact

The impact of pressure on the gateway to Europe, is now having a ripple effect throughout the region, not just in Portugal.

One key issue, as we reported recently, is the looming oversupply crisis in Germany. A problem that is being exacerbated by this Portuguese bottleneck.

“There’s a sell-by date on these products. A grower in Alberta harvests, then it sits, it ships, it clears customs, it goes through 70-day export queues, by the time it reaches Germany, it’s four to five months old.

“Pharmacies expect at least a year of guaranteed shelf life under GMP, but many wholesalers don’t want product that’s already several months aged. This creates a bottleneck and contributes to oversupply in Germany. There’s a flood of older product, pricing pressure, and growing frustration in the supply chain.”

The torrent of cannabis from the Americas will not be contained by Portugal’s bottleneck though. Like any flood meeting an obstruction, it will carve new routes of least resistance across Europe.

According to Cordova, those who are not waiting for their own GMP licences are turning to the Czech Republic, and could soon shift to North Macedonia.

However, the key shift in the global supply chain, he states, is vertical integration… “Grow your own, process your own, export directly.”

Portuguese contract manufacturing organisations (CMOs) bridge that gap by importing raw or semi-processed material, carrying out additional processing or decontamination under GMP-certified conditions, adding a layer of compliance enabling these products to then be re-exported to EU markets.

As Cordova explained to Business of Cannabis: “Portugal has been the gateway into Germany and the UK, and to a lesser degree, Poland.

“It’s been a conduit where GACP growers, whether in Portugal or other countries outside Europe – predominantly Canada, Colombia, or Thailand – have used Portuguese CMOs, or what are colloquially known as GMP ‘washers’.”

This dynamic has been supercharged by the rapid rate of growth in the German market, with exports from Portugal in the first six months of this year topping 27,000kg, around 80% of the total, up from 46% in 2024.