Legal UK Cannabis Market Could Pass £2 Billion Mark By 2024
📷 Sky News
While recreational cannabis remains illegal in the UK, medical cannabis products were legalised in late 2018. Following its first full year of use by British patients, a new study suggests that the market for legal cannabis in the UK could boom by billions of pounds in the next four years.
As the moral hysteria, racism and classism which had for the longest time stigmatised cannabis use finally dies down, governments around the globe are relaxing their laws surrounding the drug. Seeing it as an opportunity to reduce policing costs and open up a valuable new form of tax revenue, 2017 saw Uruguay become the first country to legalise recreational cannabis use, while Canada followed suit in 2018, becoming the first G7 member to do so. In the US, recreational marijuana is legal in nine states, while medical marijuana is legal in 30 – cashing in on the fact 76% of North Americans would try legal cannabis therapeutic products.
As a result, the market for cannabis in North America is projected to boom to $37.9 billion by 2024, according to Prohibition Partners, a cannabis-focused strategy and research consultancy. The firm’s Global Cannabis Report also predicted that all 50 US states will legalise recreational cannabis by the end of 2024, due to the economic success of its introduction so far. Legal cannabis is not only on the rise in the Americas, however. With a population of more than double that of the US and Canada, Europe’s cannabis market is set to become the world’s largest legal cannabis market, having grown more in the last year than the last six combined.
One nation which remains largely resistant to this potential opportunity is the UK. At present, only medical use of cannabis is tolerated, and at present very few people in England are likely to get a prescription for medical cannabis on the NHS. Currently, it is only likely to be prescribed for severe forms of epilepsy, vomiting or nausea caused by chemotherapy and muscle stiffness and spasms caused by multiple sclerosis. That is not to say that change is unlikely, however.
A new study from Prohibition Partners focusing on Britain has forecast that the UK’s legal cannabis market could be on the brink of a multi-billion-pound boom. While the industry is currently experiencing low revenues, (the first major shipment of medical cannabis only arrived in the UK from the Dutch Office of Medical Cannabis in February 2019) but this is likely to rise rapidly.
Of particular note is the news that some 20,000 patients in the UK are to be given medical cannabis over a two-year period in an initiative that aims to create the largest body of evidence on the drug in Europe. Backed by one of the UK’s leading medical bodies, it is hoped it will persuade the NHS to prescribe the drug for a range of conditions – which would significantly up demand for medical and pharmaceutical cannabis.
Medical cannabis refers to plant-based or plant-derived cannabis products prescribed by a medical practitioner for the treatment of a specific condition or disease. Pharmaceutical cannabis refers to products formulated using pure cannabinoids (either plant extracts or synthetic) that have been through full clinical trials and licensed as a medicine. Examples of products include Sativex, Epidiolex, Cesamet, Marinol and Syndros.
Prohibition Partners estimates that 337,886 patients – representing ~0.5% of the total population – will be making use of these treatments by 2024, making the UK legal cannabis market worth £2.3 billion. Since it is currently estimated from a starting point of approximately £147,200 in 2019, that represents exponential growth over the coming four years. As well as a significant increase in accessibility of medical cannabis in mid-2020 being behind this, the report also anticipates recreational cannabis being legalised in mid-2021.
Despite a group of cross-party MPs predicting the UK will fully legalise cannabis use within five to ten years following a fact-finding trip to Canada, recreational legalisation by 2021 under a majority Conservative Government still seems a stretch. However, should Britain crash out of the EU without a deal in the following months, the potential income such a measure could bring could become hard to refuse for an economy already struggling to retain positive growth.
Government statistics indicate that 7.18% of UK adults have used cannabis in the past year. This accounts for approximately 4.7 million adults, which gives an estimated black-market value of up to £6 billion per year. The millions of cannabis users in the UK, with numbers increasing over the past six years, belies the massive opportunity for investors if recreational cannabis were to be made legal in the UK. Meanwhile, for those worried about health impacts, there is an observable decrease in the prevalence of cannabis use among youth, suggesting success of local education around potential harms of cannabis for the mental health of youth.
Stephen Murphy, Co-Founder of Prohibition Partners, said of the findings, “Despite being the largest exporter of medical cannabis in the world, the UK currently imports 100% of its cannabis-based medicines prescribed to patients. The opportunities in the sector remain immense, however. The numbers of consumers are likely to increase as access to medical cannabis improves, most recently evidenced by the licensing of Epidiolex, a cannabis-based medication for epilepsy soon to be reimbursed under the NHS.”
On top of this, the UK legal cannabis market could be even larger by 2025 if CBD products are taken into account. Prohibition Partners excluded CBD from the assessment as it is an essential component of medical marijuana, but it is derived directly from the hemp plant, which is a cousin of the marijuana plant. A YouGov poll published in October 2019 estimated that 11% of UK adults had tried a CBD product (this equates to approximately 6 million people), while the UK CBD market in 2019 was £300 million. This figure is expected to reach £1 billion by 2025.