Does the UK have a wealthy future in cannabis?

In this article, Peter Reynolds, president of CLEAR Cannabis Law Reform, shares his views on the future of cannabis in the UK.

There is a great deal of money in cannabis. Until recently it was mostly gained illegally but in the last few years, the range of opportunities has widened to include legal production and distribution as well as investment and research in the medicines market. There are even substantial and legal opportunities in spin offs from the huge illegal market. And the possibilities are going to multiply even faster over the next decade. If you’re not in cannabis now, you almost certainly will be soon, or something closely connected to it.

It was 10 years ago that CLEAR, the UK’s longest-established cannabis group, commissioned what is still the most comprehensive study of the UK market. Back in 2011, legal access to medicinal cannabis in the form of flower was no more than an ambition. Sativex, a whole plant oil with a 1:1 THC:CBD ratio, had only just been licensed and that had taken more than 12 years of research and tens of millions in funding. The illicit market was estimated at between £2.9bn and £8.8bn per annum, with an average of £5.9bn. There were said to be around three million people consuming cannabis regularly, that is at least monthly.

We haven’t undertaken any new research since, although we’ve reviewed the possibility every year. The company we commissioned has advised that little has likely changed and, significantly, most of the government data sources that they had mined are simply no longer available. Austerity put paid to a great deal of government data collection in all areas and it’s no surprise to realise that about some issues, our political masters literally have no idea what is going on.

So we have continued to base what we do on the 2011 data and they have been confirmed many times over by smaller research projects carried out by others. Recently the number of regular consumers has been estimated lower at slightly over two million but this is now based entirely on self-reporting from the British Crime Survey, which is bound to be under-reporting. In 2011, we had also used a variety of other sources.  

In 2011/12 we carried out a survey of our members which indicated that at least one-third of consumers were using cannabis, at least in part, for medical reasons. We provided our data to the highly successful End Our Pain campaign and it became generally accepted that around one million people in Britain were using illicit cannabis for medical reasons. This figure was validated when a YouGov survey in 2019, based on the largest ever polling sample, put the figure at 1.4 million, 2.8% of the adult population.

So that is an excellent place to start in evaluating the cannabis opportunity. In today’s private-only medicinal cannabis market we are getting close to 10,000 patients receiving prescriptions, so that leaves room for huge growth. It’s set to explode, especially as within a year, maybe three at the outside, it looks as though the NHS could start funding prescriptions.

I’ve given up predicting when we will have a legal adult-use market in the UK. There is no rhyme or reason to drugs policy here. As ever, it’s not our PM or home secretary who makes that decision, it’s the editor of the Daily Mail. No longer is Paul Dacre sitting behind that desk but alarmingly Boris Johnson has put him in charge of OFCOM. That bodes alarmingly for the future of broadcasting, not just on cannabis and similar issues but on anything where we want to know the truth, or at least the facts and evidence to make up our own minds.

I’ve been saying we’ll have legal adult use within five years for at least the last 10 years. The best I can offer now is that I think it will probably come quite suddenly, just like the reform on medical use and what happens in the USA will have a decisive impact. But Biden has already disappointed on his clear promise to decriminalise federally, so I’m not getting excited quite yet.

Let’s be honest though, for all the people I advise on the cannabis opportunity and licensing, it’s adult use that really excites them. Even if they don’t want to admit it (and certainly not to the great and good they are inviting onto their boards) that is how they hope to become rich. And I have no doubt that it will happen. Any facilities developed or investments made now for the medical market will readily take advantage of what will be a huge consumer market when it finally opens up.

Although it’s far from easy, there should be no restriction on ambition for developing new facilities in the UK. It takes a great deal of money and a speculative outlay of at least £300,000, excluding property costs, to set about developing a business producing medicinal cannabis. It’s not possible to obtain the necessary licenses without creating the facility first and there’s no help or guidance from the authorities which issue the licenses. But with the right knowledge, experienced advice from a variety of sources, almost anything is possible. 

I wouldn’t advise anyone to get into the CBD market at present. What was a booming opportunity has been hobbled by the intervention of the Food Standards Agency (FSA) which has been breathtakingly incompetent and destructive. For products where there is no evidence of anyone ever coming to any harm from consuming them, they have tried to impose wholly unnecessary safety conditions but made a complete mess of the whole process. It’s been driven by officials who have no understanding of the products and they have been misled by a few big investors who have tried to manipulate them for their own ends. But it’s a very sad tale. No one has come out a winner and many small businesses have been destroyed for no good reason.

I’m quite certain that over-the-counter CBD ‘wellness’ products will continue and eventually the market will get the proper regulation it needs but the result of the FSA’s incompetence is that all the worthwhile products are now operating in a grey area. Anyone who isn’t already in should steer well clear for now. And if you’re offered isolate or isolate-based CBD, either as an investor or to consume, don’t bother. It’s next to useless for the purpose intended. It does have some applications in medicine but for ‘wellness’, wellbeing and the food supplement market, it’s pointless. 

There are other niche opportunities for which the regulatory process already exists, such as pet products, which could be a very substantial market. There is certainly a real chance of getting ahead of any competition for anyone who acts now. As with the human medical market, it will be important to have the right expertise on board but not difficult to identify and hire the people you need.

There is room for many more cannabis clinics and for ancillary businesses such as the wholesaling and distribution of products. Customer service in this area is presently very poor and there’s a great deal of dissatisfaction amongst patients. Again, making the most of these opportunities will require hiring the right people, from doctors on the GMC specialist register who can prescribe, to pharmacists and product specialists who actually understand what they’re dealing with. By necessity, some of these people will have gained experience in the illicit market. They are the only people who know what they are doing in many instances. While this may be problematic in relation to licensing, provided the correct restrictions and procedures are put in place, it can be managed.

As I said earlier, it’s far from easy but not necessary to curtail ambition for the cannabis opportunity. One thing’s for certain, if you start now it is only going to get easier.  The regulators and authorities concerned, even the FSA, are learning and there are clear signs of more flexibility and developing understanding. Cannabis is going to be very big in Britain. It’s been here for a thousand or fifteen hundred years already and although ‘they’ have tried furiously to do away with it over the past century, it’s coming back stronger than ever and Britain is going to be a healthier, happier and wealthier place as a result.

Peter Reynolds has been involved in cannabis law reform since the late 1970s. He first gave evidence to Parliament on the subject in 1983 and has contributed to every inquiry since. He was elected as leader of CLEAR Cannabis Law Reform in 2011 and is also a director of Cannabis Professionals, the trade association for CBD, hemp and medicinal cannabis businesses. He sits on three sub-committees of the UK Cannabis Industry Council and the advisory board of the Irish Medicinal Cannabis Council. He makes his living advising and consulting on cannabis licensing and product development.

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