New Report Urges UK to Capitalize on Potential £1.2 Billion Medical Cannabis Market
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The United Kingdom is missing out on a potential £1.2 billion medical cannabis sector and more than 41,000 related jobs due to its current outdated licensing regimes and limited investment opportunities, according to a new report from the drug policy advocacy group Volteface.
In its new report, “The New Leaf: Beyond Brexit, Countering Covid”, the group highlights the opportunities that a strong medical cannabis and CBD product sector could bring to the UK and offers seven recommendations for the UK government. If implemented, Volteface says that these changes could help to boost taxable revenue, create jobs, and encourage investment in UK businesses.
CBD in the post-Brexit UK
In brief, the seven recommendations made by the report are:
- Appoint a “cannabis czar” or establish a governmental body to oversee the expansion of the UK medical cannabis industry.
- Urge the Food Standard Association to provide clarity on allowable levels of THC in CBD products.
- Industry should work with the British Chambers of Commerce to improve investment in cannabis and CBD innovation.
- Raise the allowable levels of THC in hemp to 1 percent, up from 0.2 percent, in order to compete with other non-EU nations.
- Introduce amendments to ease the flow of products through customs.
- Allow non-specialist doctors to prescribe medical cannabis after undertaking a suitable CPD qualification.
- Increase the evidence base on cannabis-based medicinal products in order to improve patient access through the NHS.
As illustrated by these recommendations, the UK CBD market is expected to play a crucial part in the economic and innovation opportunities presented by the UK over the next several years.
The report also specifically talks about “the UK CBD advantage”, referring to the UK’s CBD market being seen as a more advanced and lucrative market than many others in Europe at this current moment. It is estimated that the UK CBD market is already worth approximately £300 million, with this expected to grow to over £1 billion within the next five years.
Although the UK has left the EU, the UK government continues to implement the novel food regime as a mark of product safety and quality for CBD products. However, the additional clarity on novel foods authorization guidance provided by the UK Food Standards Association (FSA) on CBD products has also allowed the UK to occupy a unique position in terms of the European CBD market. With the European market predicted to quadruple in value over the next few years, the UK CBD industry can expect to thrive if the current trend of clear and responsible regulation efforts continues.
Daniel Pryor, head of programmes at the Adam Smith Institute and author of the report’s foreword, said in a press statement: “The UK is in a unique position to reap the benefits of medical cannabis and CBD. Thanks to our sensible, liberal approach to regulation, these fast-growing markets are already attracting innovation, investment and jobs to our shores. But we can still do much more to become the European leader in these sectors, bringing huge benefits to patients and the economy whilst cementing our reputation as a global centre for excellence in research and development.”
The economic potential of UK medical cannabis
For years now the UK has been the largest exporter of medical cannabis in Europe, and with the recent opening of the London Stock Exchange to medical cannabis companies, the UK is primed to become an even more powerful hub for medical cannabis investment. But just how large are the economic opportunities for cannabis in the UK?
In order to estimate the potential theoretical market size of the UK legal medical cannabis market, the Volteface report authors analyzed market size and population statistics from Germany, Italy, the Netherlands, and seventeen US states that only have a medical cannabis market at present. By adjusting these market sizes equivalent to the population of that country/state, the report authors claim that the UK medical cannabis market estimate could be worth around £1.265 billion if it develops to its full potential as a European cannabis industry leader.
The report also calculated an estimated number of cannabis industry jobs and ancillary jobs – such as lawyers, accountants, consultants, and marketing firms – that would need to be created to serve a strong UK cannabis industry. To do this, Volteface examined published jobs data from 22 US states with medical cannabis programs and adjusted these relative to the population of each state, before calculating the average equivalent for a population equivalent to the UK.
The report claims that an average of more than 41,400 cannabis industry jobs could be created in the UK if the medical cannabis sector was strengthened. Based on figures from a previous US report on cannabis ancillary jobs published by Leafly in 2019, the Volteface report estimates that a further 17,000 ancillary jobs could also be created in the UK.
“It is an exciting time for the UK cannabis industry, as it stands on the brink of expansion. The space must capitalize on sustainable growth and encourage innovation in order to be seen as a serious industry,” said Katya Kowalski, head of strategy at Volteface and the lead author of the report. “The report’s findings indicate the opportunity for a lucrative market is there. Now the UK must work toward streamlined development, so the sector truly takes off.”
Naturally, using American private healthcare models to predict the development of a medical sector in the UK has its caveats. The US data are already varied between different states with different regulatory practices, and the UK’s current problems surrounding access to medical cannabis would need to be addressed if the medical cannabis industry is to take off.
However, it is clear that a properly supported UK medical cannabis market could offer real economic opportunities, which may be especially important as the country looks towards post-Covid recovery.