In this article, Hamish Stewart, chair of the London Cannabis Legalisation Commission, discusses the way forward for cannabis in the UK – looking at how formalising supply chains can create jobs and new local revenues.
London and other local cannabis industries are booming and should be decriminalised this year to support formal job creation, progress on public health goals, and to boost local government finances.
For the Mayors of London, Manchester and other cities to begin to benefit from cannabis business licensing revenue and job creation, they will have to carefully integrate existing, legacy cannabis businesses into the new formal system.
London and other UK cities have long had highly organised informal cannabis production, retail and distribution systems. In preparation for the decriminalisation of local cannabis production, retail and recreational use, UK Mayors and local councils must consider how to best incorporate existing market participants from producers to wholesalers and community retailers.
The cannabis industry currently employs and provides a livelihood for thousands of Londoners. These people should not lose their longtime livelihoods, and they do not have to in order to enter a regulated cannabis industry. Mayors and council leaders can ensure that incumbent operators are welcomed into the new system and supported to enter the formal market. Planning for this transition should start today.
Mayors of London and Manchester should lead with local cannabis industry plans
As the Mayor of London and his team review and respond to the 20 recommendations contained in the London Cannabis Legalisation Commission’s final report, they should provide Londoners with a clear plan for bringing legacy operators into the city’s decriminalised cannabis production and retail industry.
Allowing legacy sellers to convert to formal operations would provide London councils and the Mayor’s office with a head-start on generating tax revenues. These revenues can then be reinvested in communities suffering a decade of cuts to basic services, from schools, pre-school childcare, and public parks to mental health services and affordable housing.
Figure: UK Mayors and council leaders should consider the 20 recommendations made to the Mayor of London, prioritising support for existing cannabis market participants and those whose lives and livelihoods have been blighted by a racially motivated prosecution of the War on Drugs.
Support for existing producers and retailers will enable a flourishing London cannabis industry
Local cannabis decriminalisation and legalisation policy teams should pilot programmes that support incumbent cannabis businesses to prepare to account for unreported income. With this goal in mind, the Mayor of London could lead the way by publishing a model cannabis regulation for adoption by London councils that provides for a streamlined business licensing fee that balances the need to generate local tax revenue with the importance of providing existing operators an ability to transition to becoming formal market participants.
This means letting London’s cannabis entrepreneurs and suppliers formalise their operations without facing excessive financial obstacles in the form of overly burdensome licensing fees and compliance costs.
This is a key lesson from Canada’s experience with legalisation shared by cannabis retail expert Jeremy Jacob in the London Cannabis Study launch roundtable. London needs to ensure that smaller craft producers and cannabis supply chain businesses have options to enter the formal market. Other UK councils could build on and take inspiration from London’s leadership.
Figure: In order to distinguish between different types of producers, London should introduce a simplified pilot licensing regime with four tiers of producers indicated above. A priority should be on bringing informal producers into the formal system to preserve industry knowledge and maintain strong employment. Excerpt via London Cannabis Study.
Blanket amnesty for existing cannabis market participants will enable business continuity
London and other local governments should create cannabis policy frameworks that provide amnesty for all existing producers and retailers who have no violent criminal records.
Under such a scheme, applicants for a London cannabis commercial license, for example, would pay a small fee and then be permitted to operate provisionally, complying with basic regulatory requirements, pending an ultimate decision on the application within a defined period of 24 months.
This is important to enable business continuity, create new formal job opportunities, and to support a fiscal recovery for UK cities battered by a decade of budget cuts and covid. This will deliver on the Mayor of London and other local leaders’ commitments to racial and economic justice and it will support a much-needed boost to formal job creation. It’s time to get to work.
Readers can watch the London Cannabis Study launch roundtable here. In Q1 2022, the Commission will consider how London could become a self-sufficient cannabis producer, meeting Londoners cannabis needs across recreational, medical and food and beverage uses.
Register here for the 24 February 2022 roundtable on scaling up local production to meet London’s cannabis needs.
London Cannabis Legalisation Commission
London Cannabis Study 20 recommendations for the Mayor of London.
Report calls for UK Government to turbocharge cannabinoid innovation
A new report has set out recommendations for the UK to become the global leader in cannabinoid innovation.
Drawing from expert insights, the report – From Containment to Nurturing: How the UK can become a world leader in cannabinoid innovation – was commissioned by The Centre for Medicinal Cannabis and the Association for the Cannabinoid Industry.
The report argues for the UK government to recognise the UK’s legal cannabis market, and to create a public policy and nurturing regulatory framework to foster its growth.
Highlighting that millions of Britons routinely purchase cannabis products as medicine and food supplements, it stipulates that the UK has the opportunity to harness its global strengths in life sciences to become a world leader in medicinal and nutraceutical cannabinoid innovation by adopting the report’s proposals and recommendations.
Authored by regulatory thinker Professor Christopher Hodges, the report will be launched with a speech by George Freeman MP, Minister for Science, Research & Innovation – the first ever ministerial address to the legal cannabis sector.
Included in the recommendations are calls for updates to hemp farming rules, modernisation of the Proceeds of Crime Act and the creation of a national patient registry for all cannabis based medicines prescribed in the UK.
Stewarding a new industry
The report draws on inputs from leading industry players, academics, patients, consumers and investors, and its authors state that regulations are critical issues in order to help set the UK apart as it decides the economic and political path it wants to adopt post-Brexit.
Hodges argues that the regulatory framework he sets out would achieve three important objectives:
● Global competitive advantage for the UK post-Brexit, helping the country to leverage its historic and economic strengths in a rapidly growing and unprecedented global industry
● Regulatory best practice giving early mover advantage, helping to pioneer new approaches to regulating a novel industry that other jurisdictions on a similar path can choose to emulate
● Scientific advances and innovations, with pioneering new treatments, manufacturing methods, and end user product innovations, helping the UK to reinforce its reputation as the home of world-leading inventions and discoveries that improve our environment, our health, and quality of life.
The report views the cannabinoid sector through the lens of Outcome-Based Cooperative Regulation, arguing that for regulations to be effective, they need to be based in trust and collaboration. It also urges the Government to establish a ‘stewarding’ authority to govern and guide the sector and implement the required reforms.
Professor Christopher Hodges, Emeritus Professor of Justice Systems at the Centre for Socio Legal Studies at the University of Oxford, commented: “The analysis in this report and the principles we have outlined lead us to recommend a series of policy changes to help bring about the positive and shared goals that we articulate.
“The recommendations are directed both at regulators and industry, with the understanding that both parties have an obligation to co-operate to steward this new industry and support it to develop in an innovative but also safe and responsible way.”
Key objectives of the report include:
- To build a strategic engagement with government and associated agencies – move from containment to nurturing
- To establish a footprint / landing zone for the sector within government i.e. Department for Business, Energy and Industrial Strategy (BEIS)
- To establish a new coherent regulatory framework for CBMPs and consumer cannabinoids in the UK
- To optimise the potential public funding opportunities for the sector
- To align ourselves with current government thinking with regard to future regulation
The UK has a global cannabinoid leader
With cannabinoids making up a rapidly accelerating global industry, the report highlights that the UK holds an advantage in that it can learn from the successes and failures of other comparable regimes.
It also states that Brexit has given the UK the “freedom to choose to align or differentiate itself from the markets with which it is competing” such as hemp cultivation and CBD regulation.
Addressing the country’s potential to be a sector leader, the report encourages the creation of a UK ‘Centre of Excellence’ to advance the evidence base for cannabinoids and their applications, which it says could be established with the support of major universities.
Whilst the UK has set out its Life Sciences Vision, aiming to make the country a global leader in the sector post-Brexit, the report highlights how the cannabinoid sector can help accelerate this ambition.
Ir recommends that an incubator and cannabinoid innovation fund for UK pilot studies is created in areas aligned with the government’s R&D strategy to support key areas like life sciences and new agri-tech opportunities.
“By adopting the proposals and recommendations laid out here, the UK can inaugurate a timely opportunity to harness its global strengths in life sciences to become a world leader in medicinal and nutraceutical cannabinoid innovation,” state Steve Moore and Paul Birch, co-founders of the CMC and ACI.
Attracting investment into the UK
With the government having neglected to provide the right regulatory and grant support, the report highlights that those working in the sector feel restricted and shut out of policy engagement. It notes this has led to a situation whereby the UK’s sector is struggling to “find its feet” in the international market.
The recommendations in the report intent to provide a vision that “moves beyond a policy of control and containment to one of support and stewardship”. As well as helping to advance scientific discovery and innovation, and improve well-being, this will also help to create jobs and investment in local economies.
One recommendation that address this issue is modernising the Proceeds of Crime Act, which currently prohibits dealing with any benefit arising from criminal conduct, even when that activity occurs abroad if that same activity would be illegal if it occured in the UK.
This is a step that has already been taken on the island of Jersey, where people are permitted to do business in the cannabis sector as long as it is legal where it is taking place.
The report suggests that the UK’s Proceeds of Crime Act should be updated to create an explicit exemption for private enterprise by entities operating in legal jurisdictions – modelled on the changes already incorporated into law in Jersey.
The report states: “The seeds are there for rapid growth but it cannot happen without a clear strategy built upon co-ordinated government stewardship and the ambition to not just tolerate, but actively nurture the sector to expand and mature, so it attracts more investment, jobs and innovations, and secures political support and public recognition.”
It goes on to say: “Until such time as the POCA regime is clarified to exempt the owners and operators and those who gain (including shareholders) from the activities of legal companies in the UK, major institutional investors will be deterred from committing to the sector.”
Blair Gibbs, Senior Associate, Centre for Medicinal Cannabis/Association for the Cannabinoid Industry, commented: “Our conclusion from this research is not that the UK’s legal cannabis sector is over-regulated, or merely suffering from outdated rules, or simply needs red tape and unwarranted regulations to be stripped back.
“The regulations encompassing the cannabis sector are wide-ranging and complicated, but right now are also uncalibrated to the risks associated with each product.”
The report has also recommended that GP are enabled to prescribe medical cannabis. To find out more about this recommendation please visit our sister site: www.cannabishealthnews.co.uk.
CLIMB Act aims to give cannabis businesses access to financial capital
The new Act will allow US cannabis businesses to list on stock exchanges.
Representatives Troy Carter and Guy Reschenthaler have introduced the Capital Lending and Investment for Marijuana Businesses Act (CLIMB Act) to help improve access to services for legitimate cannabis-related businesses.
This legislation would give US cannabis companies access to lending and grant opportunities from both financial institutions and government agencies.
The US cannabis industry has been growing at a rapid rate, but due to the federal prohibition of cannabis, cannabis businesses in the US are currently struggling to access capital through traditional routes.
Federal prohibition also prevents US cannabis businesses from listing on US exchanges. However, global companies are currently permitted to list, giving them an unfair advantage over US cannabis businesses to secure critical capital.
The CLIMB Act aims to permit access to community development, small businesses, minority development and financial institution capital for investment and financing of cannabis-related businesses.
This includes business assistance, such as access to financial services, insurance/surety products, debt or equity capital, accounting services and more, as well as safe harbour for businesses to list on stock exchanges.
If passed, the bill could generate an estimated $22.7bn in tax revenue through increased investment.
Congressman Troy Carter stated: “The bipartisan CLIMB Act is a huge opportunity to bring equity and equal opportunity into our nation’s burgeoning cannabis industry.
“From my work on the Small Business Committee and by working directly with small, minority, and veteran-owned cannabis businesses, it’s clear that access to capital remains one of the biggest barriers to entry and to success in the industry.
“By bringing symmetry into the business ecosystem with the CLIMB Act, we can help communities that have long been harmed by the criminalisation of marijuana move to now be leaders in the business sphere – and that’s what the American Dream is all about.”
It has been estimated that the CLIMB Act would bring in an expected $47.3bn in investments to support the growth and stability of US cannabis operators and ancillary businesses within the first year, and it is also projected to create 600,000 jobs by giving these businesses access to capital.
Reschenthaler also stated: “American cannabis companies are currently restricted from receiving traditional lending and financing, making it difficult to compete with larger, global competitors.
“The CLIMB Act will eliminate these barriers to entry, and provide state legal American cannabis companies, including small, minority, and veteran-owned businesses, with access to the financial tools necessary for success.
“This bipartisan legislation will boost the economy, create jobs, and level the playing field for American businesses.”
First vice chair of the National Cannabis Roundtable and CEO of Ilera Holistic, Dr Chanda Macias, stated: “The CLIMB Act will unleash the full potential of the American cannabis industry. This legislation will ensure that American cannabis businesses can access the lending and grant opportunities that other domestic industries currently enjoy, and it will make it easier for veteran, minority and women-owned businesses to compete by giving them access to a broad range of economic opportunities.
“I want to thank Congressmen Troy Carter and Guy Reschenthaler for introducing this important legislation.”
National Cannabis Industry Association CEO Aaron Smith, commented: “Small cannabis businesses cannot effectively compete in the highly regulated and complex cannabis industry without access to capital and lending services.
“This bill is a much-needed reform that will help level the playing field for main street cannabis businesses across the country.”
The bill could help to transform the US cannabis industry if it passes alongside the SAFE Banking Act, which has been designed to allow cannabis businesses access to traditional banking services, the HOPE Act, which aims to expunge past cannabis-related convictions, and the MORE Act, under which cannabis would be removed from the Controlled Substances Act’s list of scheduled substances and would remove criminal penalties for individuals manufacturing, distributing, or possessing the plant.
The SAFE Banking Act, however, which was last year included in the National Defense Authorization Act (NDAA) and then subsequently removed, has now been stalled in the Senate for sixth time.
Medical cannabis bill given green light in Spain
The Spanish Socialist Workers’ Party introduced a bill to regulate medical cannabis in the country in May.
To move patients away from the black market, Spain’s Subcommittee on medicinal cannabis in the Congress of Deputies has approved the bill aiming to regulate the use of cannabis for medicinal purposes.
Currently, it is illegal to sell cannabis in Spain. However, personal consumption on private residences is permitted. This means Spanish citizens that consume cannabis for medical purposes are often using the black market to access their medicine.
Although, cannabis-based medical products were not legal in the country, two cannabis medicines have been available to patients in Spain – GW Pharma’s oil products, Epidiolex and Sativex.
The new bill aims to give patients’ in Spain access to medical cannabis through hospitals and health centre pharmacies via medical specialists for a number of different conditions. Some of these conditions include multiple sclerosis-related pain, epilepsy, and symptoms related to chemotherapy and cancer pain.
According to local reports, the proposal has been supported by political parties including the socialist PSOE, United We Can, and Ciudadanos, PNV and PDECAT. The Canary reported that ERC and Bildu abstained, and the conservative PP and Vox voted against the proposals.
The non-profit organisation, The Spanish Observatory for Medical Cannabis (OECM), was established in the country in 2015 to “promote, coordinate and carry out activities and projects aimed at learning about the medicinal properties and uses of cannabis and its derivatives”.
The OECM stated: “From the OECM we are pleased with the agreement reached based on the report of conclusions of the medical cannabis subcommittee approved today by a majority thanks to UP, PSOE, Cs, PNV and PDeCAT. With the abstentions of ERC and Bildu and the votes against of PP and Vox.
“We started this journey in 2015 and after seven years we have achieved it. It has been an honour to fight for the rights of at least more than half a million patients who use medical cannabis. From the OECM we want to thank all the people who have worked to bring it forward, it is a giant first step for all of us.” [Translated from Google]
The proposed bill has been given the green light in parliament, however, it must still be voted on next week. If the bill wins the vote then the Spanish Agency of Medicines and Medical Products (AEMPS) will begin carrying out work on finalising regulations within the next six months.
The bill initially excluded cannabis flower, however, The Canary reports that the parties have included an amendment at the request of patients to use flower to develop “medicinal experimental projects” as “this way of using cannabis by inhalation provides faster effects for users than simply eating or drinking infusions”.