Is London Set to Become the Center of Europe’s Medical Cannabis Economy?

Kanabo’s CEO believes that London could become the center of Europe’s ever-expanding medical cannabis economy.

London cannabis shop

Summary:

  • Medical cannabis company, Kanabo, will launch on London’s stock exchange on February 16 — the first company of its kind to do so in Britain.
  • Kanabo CEO predicts that London could take advantage of Europe’s lack of medical cannabis leadership and therefore potentially become the center of Europe’s medical cannabis economy.
  • Europe invested over $600 million into its medical cannabis businesses in 2019.  The industry is predicted to be worth around $2.5 billion by 2025. There are mixed reports on Brexit’s impact and how this relates to the UK’s cannabis market.
  • Medical cannabis is legal in the UK, but patients have widely reported difficulties in obtaining prescriptions.
  • The UK government has signaled a potential change in attitude following an increase in cannabis licenses given to British producers.
  • Over half of the British population support legalizing cannabis for recreational use. Even more are in support of reforming cannabis laws for medical use.

As London’s stock exchange prepares to list Kanabo, its first-ever medical cannabis company, cannabis vaporizer company CEO predicts that London could become the center of Europe’s cannabis economy.

Avihu Tamir, chief executive officer of Israeli-based Kanabo Ltd, told Yahoo Finance UK that there is “huge potential” for the UK to take advantage of Europe’s lack of leadership in the medical cannabis sector.

“There’s no doubt that this is a huge industry, there’s no doubt that it’s bringing a lot of jobs and taxes,” he said. “Now the question is if the UK has an opportunity to lead the path in Europe? I think the answer here is easy as well. There’s no leader for medical cannabis in Europe. The potential is huge.”

Kanabo will go live on the London stock market on February 16. Is the first company of its kind to allow British investors to buy shares and make money directly from medical cannabis sales.  It has already secured $8.1 million in UK-based investments and is currently valued at around $31 million.

Europe invested $610 million into its medical cannabis industry in 2019, which is predicted to be worth around $25 billion by 2025. The market is still very small, but Tamir says the economy is at a “tipping point”.

The UK is the Biggest Medical Cannabis Producer and Exporter in the World

According to the United Nations, the UK produced a whopping 95 tons of medical marijuana — approximately 45% of the world’s total for that year. The country was also the largest exporter of cannabis in the world, distributing over 70% of the world’s total for that year (2.1 tons). 

By comparison, Canada produced 38.5%, Portugal 10%, and Israel 4.4% of the world total. Weirdly, the USA isn’t accounted for but we imagine the country is way ahead of the UK.

UK Medical Cannabis Legalized But Difficult to Obtain

Medical cannabis was legalized in the UK in 2018, but there have been wide reports of patients struggling to obtain a prescription. This is partly due to a National Institution of Care Excellence (NICE) report on cannabis’ effectiveness for conditions such as epilepsy and multiple sclerosis. Another factor is the NHS’s refusal to allow regular GPs to prescribe medical cannabis to patients. 

It’s believed 1.4 million UK residents use cannabis for either recreational or medicinal purposes. Many obtain it via black market sources. The quality of the cannabis is usually unknown. Users have no idea whether they’re getting a pure and clean “product” or a semi-natural one with synthetics. The latter, of course, is far more dangerous and can lead to unwanted results after consumption such as psychosis or death. 

Brexit Impact on Cannabis Legalization?

There are mixed reports in the media around Brexit’s impact on potential future plans the UK may have in cannabis legalization. 

It is claimed that the country will no longer have access to cannabis produced in the Netherlands, resulting in fears that around 40 British children who receive medical cannabis could be left without treatment. The Netherlands has since agreed to extend supply to the UK until July 2021, though what happens afterwards remains uncertain.

Other news outlets are more optimistic. It is speculated that the UK’s new-found freedom from the EU could allow it to explore further the possibilities of expanding their cannabis market.

“With Brexit, the British government will have the option to not comply with EU law in some areas,” explained Alexej Pikovsky, chief executive of European medicinal cannabis distributor Alphagreen, who spoke to Proactive Investors UK. “One of the first announcements the Food Standards Agency made was to classify CBD as a novel food, something that the EU has yet to officially confirm and is still holding out on this classification.”

According to Pikovsky, the UK cannabis industry is “growing fast” and, now it is no longer a member of the EU, can “accelerate” the reform of its laws around the recreational use of cannabis. He also predicts that cannabis will eventually become a lucrative part of the country’s industry.

Another hopeful step forward for the UK is the number of high-THC cannabis licenses granted to British producers by the UK Home Office. The amount granted in the year between March 2019 and 2020 was 19, which is double the previous year.  

Will The UK Ever Legalize Adult Use Recreational Cannabis?

While there is speculation of a possible attitude shift within the government around medical and recreational cannabis in the UK, there doesn’t appear to be much change since their last statement on cannabis in 2018.  

The legalization of cannabis for adult use in Canada and across many parts of the US is a promising step in the right direction of global cannabis acceptance but probably won’t influence the UK government too heavily either. 

The problem with the perception of cannabis in the UK is it’s seen as dangerous, harmful, toxic, and addictive. There seems to be a view that cannabis may also be a gateway to other, more harmful drugs such as cocaine, crack, and heroin. 

This is totally outdated. Cannabis, of course, has its downsides, the same way alcohol and opioids do when users don’t practice self-control. It’s also open to abuse and may stunt brain development in heavy adolescent and teenage users, which is why government regulation is needed to prevent underage consumers, as well as an influx of black market “products”.  There’s absolutely no conclusive evidence showing cannabis will lead to harder drugs, no matter how hard the War on Drugs campaign shoved that narrative down our throats. 

But the UK government approaches cannabis the same way it ignores prescription medication risks. Cannabis is constrained by antiquated taboo. The “cannabis is for lazy stoners and delinquents” runs rampant in the minds of health and safety officials. 

However, the British public is broadly in favor of cannabis legalization. More than half of the population is in support of legalizing for recreational use, and even more are behind reforming the law for medical cannabis.