Medical Cannabis: The UK’s next billion-pound industry?

The PHA Group’s Strategic Communications team assess what impact a new billion-dollar industry could have for investors, female empowerment and the UK’s global role. 

Back in 2016, the UN’s International Narcotics Control Board discovered a rather extraordinary piece of information. When assessing the global stocks and production of the world’s legal cannabis, they found that an incredible 78% of the world’s stocks were actually being stored in one country. Not only was that one country growing around half the planet’s legal cannabis, it was also accountable for more than two-thirds of global exports.

Curiously, the country responsible for the vast majority of the world’s legal cannabis production and trade that year was the United Kingdom, having doubled its production to 95 tons of legal cannabis (45% of the world’s total.)

These developments can be attributed to what some analysts are now collectively naming the “Green Rush.” A term being used to describe the changing political and mainstream discourse around cannabis, as more and more countries begin to develop medical programmes using both cannabis and cannabis extracts, while establishing hugely prosperous industries in the process.

A Budding Industry

At the time of writing there are roughly a dozen or so cannabis companies already operating with stock market values of more than $1 billion. While, most of the commercial focus has so far been on North America, some estimates believe that the European cannabis market itself could be worth over £100bn by 2028. To put that figure in perspective, that’s more than double the revenues Apple reported in the region last year.

The big cannabis-producing companies recognise the need to provide more clinical evidence as they become more pharma-focused, which will begin to see more clinical trials and medical partnerships. The world’s largest cannabis company, Canopy Growth, a Canadian grower that processes cannabis plants into oils, gel capsules and dried flowers, generated sales of £47m last year. They’ve now created a new UK subsidiary, Spectrum Biomedical, to begin importing and distributing cannabis to pharmacies in the UK at the request of physicians in 2019.

UK Market

Acceptance amongst Britain’s political and business leaders around cannabis continues to grow, and it’s proving exciting for investors. Britain’s first investment vehicle devoted to medicinal cannabis, Sativa, floated on London’s NEX exchange in March 2018, followed by High Growth Capital in June, both attracting buoyant backing from fund managers. Unsurprisingly, the shares would soar in value after Home Secretary Sajid Javid’s unexpected decision in November to legalise medical cannabis. The decision from the Home Office to introduce legislation was significant breakthrough, a decision arriving much earlier than most analysts had expected. However, while patients are still struggling to access medical cannabis, it is worth remembering that cannabidiol (CBD) products were already widely accessible as food supplements. High street stockists, such as Holland and Barrett, have already been successfully promoting CBD ranges, despite not being able to endorse the health benefits by law.

In the background though, things continue to progress. There have been further positive votes in the European Union to advance medical cannabis. The World Health Organisation officially recommended that the cannabis compound cannabidiol (CBD) should not be classified as a controlled substance, and the UN has released positive findings from studies on both CBD and THC.

Now, ECH, which helped to secure the arrival of the first legal cannabis shipment in Britain this year, has now opened the first medical cannabis clinic in the UK in Manchester to assist patients with chronic conditions, with clinics in London and Birmingham due to open before the end of the year.

High Expectations

As the Guardian reported earlier this month, interest in CBD is exploding and it isn’t just this month’s turmeric shot. They reported that “If CBD does what its advocates suggest – or even a fraction of it – this all-natural, side-effect-free, widely available chemical could genuinely be the wonder drug of our age.”

It’s some statement. In the meantime, the UK is already seeing CBD cocktails, edibles such as gummy bears, vapes and we’ve even heard of a new tampon range. The government has recognised medical cannabis has benefits when it comes to some serious conditions, but others argue CBD has the potential to replace everyday items like ibuprofen. It’s an industry in its infancy, and nobody is sure quite how far the possibilities extend. But if things progress as quickly and as promisingly as they are currently, you will most certainly be looking at the UK’s next potential billion-pound industry.

Female Empowerment

The nascent cannabis industry requires talented entrepreneurs and leaders to take it forward.

On May 18th, global players in the market will be arriving in London to discuss these developments and more at the Women, CBD & Medical Cannabis Conference at the Hilton London Paddington Hotel. Business leaders tell us one of the benefits of working within such a new and rapidly developing industry is how ascendant it has been for women. As it is a relatively new industry, there is a unique opportunity to help build an entire regulated industry from the ground up – a space that is progressive and inclusive compared to other traditional industries. As a result, the number of women in senior leadership positions continues to outstrip the national average, while the female consumer demographic in the US virtually doubled in size last year. Forming a new industry has allowed equal opportunities to be built into the core of it, as well as giving them an edge when it comes to understanding their female consumers.

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