About the CMC
The Centre for Medicinal Cannabis has a formidable in-house mix of medical expertise, political nous and analytical skills that our members can depend on to bring about positive reform.
Jonathan Hodgson, CEO | Rokshaw Laboratories
Pierre van Weperen, Managing Director | Grow Group UK
The unlicensed Medical Cannabis market in Europe is forecasted to grow to between £3bn and £5bn. Although different estimates vary, none of them come in below £3bn by 2025. Towards the lower end estimate, the German market alone will be worth close to £1bn with France, the UK, Italy, Poland and potentially Spain contributing to the total.
Over the past 12 months, countries all over the world have begun to liberalise medical cannabis. During 2021, trial access to medical cannabis began in France and the first pharmaceutical cannabis medications became available in Ukraine. It is expected that governments around the world will continue to legalise medical cannabis for patients who need it, and it is important that the UK is setting a standard and maximising the economic value of this emerging healthcare industry.
The UK industry today
Despite being several years behind Germany and with different regulations, the UK has already a quite established internal medical cannabis industry that imports finished products and also manufactures for the local market from imported extracts and concentrates. In the UK, all manufacturing activity is performed by specials manufacturers license holders and wholesalers need a so called WDA license for the distribution of medicinal products for human use.
The main companies involved in medical cannabis are Rokshaw Ltd (part of EMMAC Life Sciences Group), and IPS Ltd (part of Grow Pharma Ltd) as importers, wholesalers and distributors. The main foreign companies currently exporting into the UK include Althea (Australia), Spectrum (Canada), Aurora and Tilray (Canada).
We estimate current value of the internal UK unlicensed medical cannabis market to be approximately £15m+ per annum with employment for several hundred people. This excludes the licensed pharmaceutical market with products like Epidyolex from GW Pharma and their global reach. It also does not take into account the jobs in academia involved in medical cannabis research and the research money that is put into this area. It also excludes the value to the conference and events industry, consulting, law firms or PR and other agencies that work in this area.
The Volteface report entitled ‘The new leaf: beyond Brexit, countering COVID’, estimates that the UK’s medical cannabis market could reach up to £1.2bn, creating 41,000 direct jobs and a further 17,000 supporting jobs.1 With Brexit in place, it creates the perfect opportunity for the UK to become the centre of European cannabis and add tens of thousands of jobs to that number. Another report by Maple Tree consultants and Mackrell solicitors from April 2021 stated: “There is a potentially huge job market for cannabis related industries, which require farmers, researchers, production workers, accountants, lawyers, IT specialists, financial experts, researchers, and lab technicians to name a few.”2
The European market as a whole has the potential to be very significant, given the growth of legal access schemes in many European countries. In the literature, the 1% rule about the share of the population that would benefit from medical cannabis seems to be quite accepted and is being borne out – Israel with a population of around 9 million had 108,013 registered medical cannabis users in November 2021 according to the Israeli Ministry of Health.3 The legal frameworks across Europe differ per country. That said, there is significant opportunity in current and soon to be legalised medical cannabis countries to explore as export targets for the UK industry. With a population of 448 million in the EU27 (excluding the UK), there could be 45 million people using cannabis in Europe for medical purposes if access was enabled everywhere.
Whilst the UK has seen a significant increase in patient access from a few hundred patients in early 2020 to an estimated 7,000 by the end of 2021 (authors’ data), we are still at the start of this industry. The economic growth potential for the UK and the rising demand in the European market in the coming years, is what should make the UK government keen to support the industry. One of the most important early supporting measures would be to permit the domestic industry to export.
Scaling the UK’s nascent cannabinoid industry
Presently, export of unlicensed cannabinoid medicines is not permitted in the UK. Domestic patients receive finished products from UK-based companies, but the source material is imported – mostly from Denmark, Portugal, Canada or Australia. These other legal markets can reap the benefit of exporting quality cannabis to the UK, but the British industry is prevented from doing the same.
The current restrictions on importing would need to be adjusted to allow the import of material in larger quantities for export at a later date. It would not be an issue to track this and continue with the current system for import for local UK patients. The latter currently requires a justification for the quantity such as a clinical need letter, when exporting this would not be possible as it is unlikely we would know the exact clinic or country even requiring the product.
Denmark, Portugal, Canada or Australia [and] other legal markets can reap the benefit of exporting quality cannabis to the UK, but the British industry is prevented from doing the same.
If exporting of CBPMs were allowed there is potential for economies of scale in the production of these medicines whereby average production costs would fall as outputs increased. Currently, the production of oils is in very small batches and unautomated, like with all specials they are labour intensive in paperwork and production, checks, release, etc due to the small batch sizes. Exact efficiencies would depend on batch size which will also be reliant on having extended shelf life.
With export permitted, between companies we would certainly invest in the equipment and stability studies to upscale this product. Quite quickly we could scale up to 50L, then 100L and 200L batch sizes and we would estimate a 70% saving in production costs. That in return would also make local production for the domestic market more efficient and affordable, recouping profits that are now being made by foreign companies exporting their finished oils to the UK.
If the regulations were to change to allow export of product (requiring MHRA and Home Office consent), the current UK-based medical cannabis industry – and by extension patients – would benefit significantly. If exports were permitted and over time, the UK could secure just 5% of the European market – a conservative estimate – then exports could be worth over £150million annually. If import, export and scale-up is feasible, the majority of the savings would be passed on to help lower prices for patients and the remainder would be reinvested as this market grows and will need further development.
There seems to be no clear reason for the two tier treatment where CBMPs are prevented from being exported from the UK today when other specials can. This seems unfair and unjustified. Speculations point towards the fear that product might be diverted to the illegal market but processes can be put in place to monitor that and the UK medical cannabis industry would be well aware of its responsibility.
If import, export and scale-up is feasible, the majority of the savings would be passed on to help lower prices for patients
The UK as a medical cannabis leader
As the global cannabis sector expands in the decades ahead, the UK is unlikely to become a leading centre of cannabis cultivation. However, where it can win market share is in developing high quality finished products, and cutting-edge research to support clinical practice. The UK has the research and innovation clout to become a leader in the development of cannabinoid treatments.
New medicines developed in the UK should not just benefit British patients. By allowing the export of finished products, the UK’s medical cannabis industry could easily expand into the European market and become a major player in that larger market, thereby generating significant additional revenue for the UK and creating tens of thousands of extra jobs in the process.
The UK has the research and innovation clout to become a leader in the development of cannabinoid treatments – and new ones developed in the UK should not just benefit British patients.
As well as attracting local and foreign investments into the industry, the UK should aspire to become Europe’s medical cannabis knowledge hub that would also attract substantial investment in conducting clinical trials from the UK and thereby also drive IP and academic knowledge that in turn can be exported or used to attract investment. There is thus a strong case for allowing export of unlicensed medical cannabis products from the UK, in a move that would support the domestic industry to scale and achieve greater efficiencies, tap into important overseas markets where patient demand is rising, and help to build the UK as a hub of medical cannabis knowledge and innovation.
The Centre for Medicinal Cannabis has a formidable in-house mix of medical expertise, political nous and analytical skills that our members can depend on to bring about positive reform.