The UK’s medicinal cannabis industry could create 97,000 new jobs and be worth £2bn if government regulation around the sector is relaxed, according to new recommendations.
In a report published on April 20, medicinal cannabis strategy firm Maple Tree Consulting and law firm Mackrell Solicitors said the convoluted state of Britain’s current rules on the drug meant the country currently imports the great majority of its cannabidiol (CBD) products and 100% of its medical cannabis despite being one of the world’s largest exporters.
The report also highlighted that most of the UK’s medicinal cannabis patients require full-spectrum products that cannot be produced domestically due to the difficulty of obtaining a cultivators high-tetrahydrocannabinol (THC) growing license from the Home Office, with only 19 of these licences currently granted in Britain.
“This is a poor number, considering applications to the Home Office to grow cannabis for medical purposes have been open for several years”, the report said, adding that based on financial mapping of other regions where it is legalised, allowing the establishment of a UK medical cannabis industry could generate over £360mln in tax revenue per year.
“There is a great opportunity that the UK is currently missing in terms of a cannabis industry…[cannabis] is widely recognised and a globally accepted sector”, Maple Tree co-founder and medical cannabis expert Professor Mike Barnes told Proactive.
“Cannabis licensing and policy [in the UK] involves a lot of different government departments and is a bit of a mess. There is no coordinated approach…We could get a UK cannabis industry up and running very quickly. The infrastructure is there…but the UK government isn’t really pushing that”, he added.
Increase in THC limit among recommendations
One of the proposals included within the report is that the UK increase the legal THC limit permitted in cultivated cannabis to 1% from the current level of 0.2%, bringing it in line with international competition.
Other recommendations include reforming the current drug licensing system as well as the rules around high-THC cannabis cultivation.
The report also suggested allowing the cultivation of the hemp flower in order to extract CBD under an industrial hemp licence, as under current UK law the stalks of the hemp plant can be used for textiles and the seeds for food products, but its flowers and leaves, where the majority of the CBD resides, must be destroyed.
The report estimated that allowing the flowers and leaves to be harvested could increase hemp crop yields to around £10,000 per acre from the current level of £400, allowing the UK’s 900 acres of hemp farmland to generate over £22mln per year in revenues.
Outdated learning may be a bigger obstacle
Meanwhile, the report’s authors highlighted that it is not only UK legislation that needs reforming but also the approach to the application of cannabis rules by civil servants.
Ricardo Geada, partner and head of Mackrell’s cannabis and regulatory team, told Proactive that aside from the current legislation a bigger issue may be the “outdated learning” about the current laws within the government departments responsible for monitoring the sector.
If these elements can be reformed to promote growth in the sector, Geada said that the medical cannabis market could be “worth billions of pounds and has the potential to revolutionise patient care and turbocharge the UK economy post-[coronavirus]”.
“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”, Geada added.
Reform of the UK’s medical cannabis laws could prove a boon for a number of listed firms on the London stock markets including CBD product makers Sativa Wellness Group Inc (LON:SWEL) and Zoetic International PLC (LON:ZOE). An overhaul of the existing laws could also increase the attractiveness of cannabis firms planning floats on the London market such as Northern Leaf, which in early April raised £14mln in an oversubscribed pre-IPO funding round.