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U.K. Cannabis Industry Could Be Worth $2.8B Per Year If These Problems Are Fixed

A new research paper is shining light on the outdated laws and regulations currently hindering the U.K.’s CBD and medicinal cannabis industries.

Written by Maple Tree Consultants and Mackrell. Solicitors, the paper is supported by sixteen industry heavyweights including Prohibition Partners and the Primary Care Cannabis Network. Its findings refer to distinct areas of the cannabis industry, including CBD, hemp and medical cannabis.

Time To Relax

The paper calls on the government to review its restrictive approach to the U.K. cannabis industry, which could be worth billions of pounds and create tens of thousands of jobs.

Not only would the emergence of a domestic cannabis sector help stimulate the U.K. economy post-pandemic, it would also transform access for the estimated 1.4 million individuals currently sourcing medical cannabis illegally, the paper argues.

In November 2018, the government announced that medical cannabis could be prescribed to patients by specialized doctors, but so far only three NHS prescriptions and 6,000 private prescriptions have been issued. Despite being one of the largest exporters of medical cannabis in the world, the U.K. currently imports 100% of its own cannabis medicine and the majority of its CBD products. This is due to the contradictory legislation of medical cannabis and the convoluted licensing and regulatory processes required for businesses seeking to enter the space.

Professor Mike Barnes, co-founder of Maple Tree Consultancy, told Benzinga that, even though the U.K. enjoys a reputation as a globally dominant medicinal cannabis producer, almost all of the medicinal cannabis products prescribed in the U.K. have, to date, been imported.

“The U.K. is a world leader with a global reputation in pharmaceuticals, so there is a strong argument that if we were able to both develop and export more cannabis-based medicines, we could continue to be a global heavyweight and increase our market share even further,” Barnes said.

“The current situation has resulted in desperate patients, who even after being lucky enough to receive a medicinal cannabis prescription, face high costs and long waiting times. This is in turn leading to frustrated businesses, who are desperate to supply these domestic patients.”

The paper’s recommendations to the government include the following:

  1. Reform the high-THC cultivation/controlled drug license system.

  2. Allow cultivation of hemp flower in order to extract CBD under an Industrial Hemp license.

  3. Increase THC limit from 0.2% to 1% to align with international competition.

  4. Ensure that the application of the Novel Foods Regulation to cannabis-related wellbeing supplements does not impinge upon smaller market participants.

  5. Encourage wider, appropriate patient access by allowing General Practitioners to prescribe medical cannabis.

  6. Introduce an “Office for Medicinal Cannabis,” as implemented by other jurisdictions such as the Netherlands.

A Look At The Market

The paper’s findings on medicinal cannabis include the following:

  • Production of the U.K.’s medicinal cannabis products is confined to one main grower – British Sugar – and one main producer – GW Pharmaceuticals PLC- ADR (NASDAQ: GWPH). In 2018, the U.K. was supplying 44.9% of all medical cannabis, yet this relates almost solely to two products, Sativex and Epidiolex, which are not prescribed in the U.K. domestic private market but are prescribed in the NHS as licensed medicines.

  • Most of the U.K.’s medicinal cannabis patients require full-spectrum products that cannot be produced in the U.K. due to the difficulty of obtaining a cultivator’s high-THC growing license from the Home Office.

  • As of October 2019, there were just 19 extant licenses to cultivate high-THC cannabis in England, Wales and Scotland, and many of these are owned by GW Pharmaceuticals. This is a poor number, considering applications to the Home Office to grow cannabis for medical purposes have been open for several years.

  • The medical cannabis industry could be worth in excess of £2 billion if even half of the 1.4 million individuals currently sourcing cannabis illegally for medical reasons were to be granted a prescription.

  • According to financial mapping of other regions that have legalized medical cannabis, the industry could generate over £360m per annum in tax revenue.

Ricardo Geada, partner and head of the cannabis and regulatory team at Mackrell.Solicitors, spoke with Benzinga. “The current regulatory landscape for medicinal cannabis is fraught with problems. The market could be worth billions of pounds and has the potential to revolutionize patient care and turbocharge the UK economy post-COVID. We hope the Government takes notice of our report’s findings and opens discussion on the necessary detail that lies behind the Recommendations we have presented.”

Findings on Cannabidiol (CBD):

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© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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