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Future proofing the UK cannabis industry

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The APPG for CBD Products has presented a business plan to future proof the UK cannabis industry which would help create 594,000 jobs and a £5.5bn annual tax opportunity.

The APPG for CBD Products has presented a series of recommendations to the UK Government in order to create a well-regulated, multi-faceted and competitive UK cannabis industry.

The group, co-chaired by Crispin Blunt MP and Baroness Manzoor CBE, say that the business plan will – if implemented – future-proof the UK farming industry, boost technological innovation, domestic manufacturing and tourism, while creating more than 594,000 new jobs and contributing over £5.5bn in annual tax revenue.

Read more: A vision for cannabis tourism in the UK

Informed by feedback from trade bodies representing over 70 per cent of the UK’s cannabis sector, the business plan provides a clear picture of the key areas of opportunity for a domestic cannabis industry. 

This will support the Government in its duty to ensure the availability, affordability and assortment of cannabis-based products to protect consumers and eradicate the need for the illicit market, while creating a new wave of jobs in rural communities.

Crispin Blunt MP, co-chair of the APPG for CBD Products, commented: “This broad industry analysis highlights significant potential opportunities, as well as some necessary early wins from intelligently improved regulation. 

“Bigger opportunities could follow including destroying a vast illicit market, protecting children by reducing psychosis and crime. 

“There is an economic incentive – potentially £5.5bn in annual tax revenue – to build a well-regulated sector that turns the UK into one of a few lucrative worldwide hubs. The more profound the change the greater potential opportunity. 

Read more: Crafting cannabis policy to adhere to European and international regulations

“However, all these opportunities require urgent analysis first, so Her Majesty’s Government must acquire that analytical capacity to lead the discussion, and do what needs to be done well, whilst acquiring the confidence to do what can be done in the overall public interest.”

The business plan states: “Amid rising consumer demand and economic pressures brought by the COVID-19 pandemic and other global crises, governments around the world are recognising cannabis as a significant driver of economic growth and tax revenues. 

“In this context, the debate around full legalisation in Washington, Berlin and other world capitals has shifted from ‘if’ to ‘how’. 

Read more: The economic advantages of amending cannabis legislation

“The UK has significant domestic capability, expertise, and consumer demand for cannabis-based products. Post-Brexit, there has never been a better time for the UK to seize the opportunities offered by the sector and establish itself at a leader in the emerging global cannabis industry.”

Recommendations

To achieve the significant value creation potential, better protect consumers and seize the urgent and time-limited opportunity that the industry currently presents, 23 specific recommendations have been proposed. 

This includes:

  • Move hemp licensing from Home Office to DEFRA: To put the UK on a competitive footing with other hemp-producing countries, the licensing of industrial hemp cultivation should be moved to DEFRA, whose staff have agricultural expertise and are better qualified than those in the Home Office to assess applications for hemp cultivation.
  • Commission a review of the Novel Food Regulations and its applications to hemp-based food supplements: Today, the vast majority of CBD food supplements sold in the UK are imported. This is due to current restrictions on hemp cultivation and the onerous Novel Food (NF) process, both of which effectively preclude UK farmers from accessing this high-value-add consumer segment of the CBD sector.
  • Establish commercially viable THC limits in consumer products: the current focus on permitting only CBD isolate sales in the UK nullifies the potential economic benefits for a domestic UK industry, as isolates are an oversupplied commodity dominated by US and Chinese manufacturers.
  • Allow GPs to prescribe cannabis and remove the requirement for doctors to triage their prescription with two other peers:  the current procedure is slowing down the process and creating unnecessary barriers.
  • Reform the Proceeds of Crime Act 2002: At present, investors remain cautious about investing in the cannabis sector, owing to the risks associated with the Proceeds of Crime Act 2002. As a consequence, proceeds from medicinal cannabis business in states such as Colorado may constitute “criminal property” even if fully legal and authorised in the foreign state.

The APPG also believes there is an opportunity for the UK to establish an international lead – structured correctly, led by Whitehall, and including co-operation between existing trade bodies and business with the aim of measurable benefits to be achieved in 2023. 

This includes the issuance of terms of reference for the work required to create a hemp and cannabis industry, naming of a Cabinet Minister responsible, and developing detailed implementation plans.

Baroness Manzoor CBE, co-chair of the APPG for CBD Products, said: “This plan demonstrates clearly that an impressive opportunity is realisable in the near term. Vast medical, wellness, and economic benefits are available by forward-looking regulation and energetic political and administrative leadership. 

“The plan, and subsequent actions and recommendations, should be seen as a framework to support the UK economy in achieving the value creation potential that cannabis presents.”

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