Jobs boom for rural communities

The UK medical cannabis industry is set to grow from almost nothing to become an £8bn a year industry over the next decade.This trend is being mirrored across Europe and the phenomenal growth of the industry captured the attention of the global elite at Davos this year.

Consultants Prohibition Partners, which launched its latest European cannabis market analysis at the Swiss ski resort in January, estimate medical cannabis could treat up to 2.9 million people in the UK.

The market is dominated by GW Pharmaceuticals (GW), which employs more than 500 people in the UK. In the last five years GW has invested at total of £344m in research and development and £82m in manufacturing facilities including a recent investment of more than £20m in expanding its Kent-based plant.

Under licence from the UK Home Office and under contract with GW, British Sugar grows a non-psychoactive, CBD enriched, variety of cannabis at Downham Market, near Kings Lynn, Norfolk. The growing facilities span the equivalent of over 20 football pitches.

A company spokesperson said: “GW is an innovative UK-based biopharmaceutical company that over the last 20 years has established a world-leading position in cannabinoid science and medicines – leading to the regulatory approval of world first, potentially life changing medicines.”

It was co-founded in 1998 by Dr Geoffrey Guy and Dr Brian Whittle, and manufactures cannabis-based medicines such as Epidiolex and Sativex. New home-grown UK businesses are now moving into this industry, but the major beneficiaries of last year’s UK legal changes are currently North American companies, particularly those from Canada.

Jenn Larry, president of Montreal-based cannabis marketing business CBD Strategy Group, said the Canadian producers key market advantage is their ability to deliver condition-specific medication through doctors and pharmacies.

She said: “The UK has an advanced market with topicals and you have already wrapped your head round hemp and CBD so the Canadian contribution may be more directed towards the medical potential for those areas, for drug-identified products with a clear way to then detail doctors and work with pharmacists.

“I’d love to see our companies continue to champion that; it gives us a market advantage that we rarely have and I think the relationship between the UK and Canada is extraordinary. We hope we can bring a lot to the UK with our standards, our thinking and hopefully our intellectual property, which includes our knowledge.”

One of the first movers into the UK market has been Canopy Growth. Its new UK subsidiary, Spectrum Biomedical, began importing and distributing cannabis to pharmacies earlier this year.

Vancouver company Namaste Technologies recently bought a UK pharmaceutical distributor and Tilray is investing £18m to import cannabis genetics and to cultivate cannabis for medical purposes in Portugal. Ontario company Aphria has formed an alliance with UK neurologist Professor Michael Barnes (who sits on Cannabis Health’s Editorial Board) and is a leading voice on UK medical cannabis policy.

Ms Larry continued: “A lot of Canadian companies are investing in innovations that are creating GMP (Good Manufacturing Practice) standards. We are seeing significant investment from private companies like Tantalus and large companies like Aurora and Canopy.

“Any Canadian operator, operating within the law, driving the right message and practising with integrity – I look forward to them impacting the UK. This is an industry which the UK, itself, will want to be in; from an economic standpoint, from a jobs-creation standpoint and a wellness standpoint.”

Canada’s dominance in the market-place is a result of its nationwide cannabis policies and its track-record in working with the psychoactive cannabinoid THC.

With Canada becoming the second country to fully legalise and regulate cannabis after Uruguay, its homegrown companies have been legally able to innovate and grow. With only nine US states (Washington, DC, Alaska, Colorado, California, Washington, Oregon, Maine, Massachusetts and Nevada) having fully legalised markets, many businesses have restricted their operations to their state boundary. This has so far prevented them accruing the economy of scale advantages of their northern neighbours.

Stephen Murphy a co-founder of Prohibition Partners, believes it will be economic metrics that support the growth of a European industry. Over the last twelve months, the European cannabis industry has grown more than it has in the last six years, according to its new research. Its 2019 European Cannabis Report finds six countries announced new legislation in 2018 – and over £500m has been invested in European cannabis businesses in recent months.

“A lot of governments see medical cannabis as a way of boosting their pharma and agricultural industries. They want to position themselves as leaders in understanding how big and how widely-used medical cannabis will be.

“This industry can give life to towns or cities that have struggled. It is unlike any other because, even though it is an emerging and pioneering industry, we already know what the demand is, we know its usage and the value of it, so there is a lot of guesswork taken out of it. The big companies all have evidence of how this could be turned into potential business for the exchequer,” said Murphy.

Three former firefighters secured permission to grow hemp from the Jersey authorities in 2017 and harvested their first crop last September. David Ryan and Kevin Mars had previously served in the Royal Marines and, along with Blair Jones, they encountered hemp in 2013 whilst researching building materials. Initially it was the excellent fire-resistant properties of ‘Hempcrete’, and on further investigation they discovered the diversity of hemp-derived products. Now up and running at Warwick Farm they believe the hemp industry can provide a a major boost to the Channel Islands economies.

Chris Callaghan, the chief science officer at Jersey Hemp, says: “The European medical cannabis market is expected to exceed the value of the US, with some estimates valuing the market at £30bn by 2020 and that if the Island received just one per cent of the European market it would generate £300m per annum.

“This could see many of the dilapidated greenhouses restored to their former glory as well as retaining much of the agricultural knowledge acquired from the historical tomato and flower industries.”

Jersey Hemp cultivates the cannabis sativa strain for the stems and seeds. The seeds are cold-pressed into hempseed oil which is commonly used in cooking, cosmetics and nutritional supplements. Its hempseed oil is also mixed with high quality imported cannabidiol (CBD) or raw cannabis CBD extract to make its range of nutritional supplements.

David said: “Product wise, we are looking to extend the CBD range to include e-liquids, capsules and ointments as well as producing the CBD ourselves. Our hempseed oil will be further processed into a range of cosmetic and beauty products.

“We are also researching the utilisation of the stems to produce Hempcrete, a sustainable building material, bio-plastics and bio-fuels. Our ambition is to find an applicable end-use for all parts of the plant and waste nothing.”

The company is also looking at hemp growing partnerships with business on the other Channel Islands.