The UK could legalise cannabis recreationally within five years, experts in the industry believe.
It seems like a very quick turnaround to reform drug laws, but investors are already scoping out Britain as a potential new market.
Dozens of company reps met at a hotel in Mayfair for a conference on Thursday, in anticipation of the UK following Canada, Australia and dozens of US states in loosening their regulations.
‘We are very, very eager to get into the UK market,’ Max Zavet, founder of Canadian cannabis company Emblem, said.
He believes we’ve reached a tipping point globally, and it’s only a matter of time before the government catches up.
‘It will definitely be medical first,’ he told Metro.co.uk.
‘Once that starts happening, people aren’t as afraid about pot anymore and the stigma reduces. You may see a recreational regime here in the next five years as well.’
He spent several days in London to make contacts in the hope of expanding his business once the laws have changed.
Emblem, which produces and sells dried flower as well as cannabis oils, is one of 14 companies who presented at the Cannabis Invest conference at the May Fair Hotel.
The exclusive London hotel is not necessarily where you’d expect to find businessmen and high net worth investors discussing the THC content of ‘premium flower’.
Those attending were almost exclusively in suits and cufflinks, with only one sequinned jacket in sight.
Some present admitted they had never even tried cannabis, but were there because they saw it as an exciting investment.
It shows how far the drug has come in being seen as acceptable, with canapés and glass bottles of San Pellegrino offered to guests – rather than a large order of Pizza Hut.
Many of those presenting were Canadian, which makes sense as the country will make recreational use fully legal by September this year. Brits in attendance were more likely to be listening than leading the sessions.
Max believes UK industry as a whole will lose out because businesses will be playing catch-up once it is made legal (although one of the largest cannabis companies in the world, GW Pharmaceuticals, is based in Britain).
‘The UK is on the forefront of most industries, but I think the culture is maybe a little too conservative, and is afraid of a new substance to harm children and harm society,’ he said.
‘That’s even though people are consuming it regularly anyway.’
It’s obviously simpler for cannabis-based companies to operate if the drug is legal, because investors won’t be afraid it’s an illegal operation so it will be easier to raise capital.
This has put US companies at a disadvantage, even in states where it is legal, because banks are federally regulated and at a governmental level cannabis is still outlawed.
It has been linked to schizophrenia and depression, with the Royal College of Psychiatrists warning of the ‘risk of serious consequences for people, such as the development of an enduring psychotic illness, particularly in those who are genetically vulnerable.’
However, despite this many are optimistic the laws will soon change.
Travis Wong, who used to be an investment banker in London, also attended the conference and hopes to move into the UK market.
He quit his job and moved back to Canada to join the cannabis industry and has worked for Wheaton Income for a year, a streaming business which provides capital to companies in return for 33% of their cannabis.
‘In the future we would love to look into Europe and London,’ he told Metro.co.uk.
‘In a lot of markets there’s a two-step process. They always start with allowing medical access, having a regulated market for patients who want THC and CBD to help with pain management.
‘As soon as people start realising the world isn’t blowing up and it’s not a gateway drug and there’s not people high on cannabis all the time, the second phase is to go recreational.’
Cannabis use in the UK
Cannabis is the most commonly used illegal drug in Britain, with 6.6% of adults aged 16-59 having used it in the last year.
Men aged 16-59 in England and Wales were more than twice as likely to report using cannabis in the last year than women (9% of men compared with 4.2% of women).
Source: UK government
‘From what I recall, the UK has a relatively high level of recreational usage.
‘Public opinion will shift very quickly.
‘I can see how [hedge fund managers] are starting to think: In two or three years, if capital pools start opening up in the UK, they want to be there.
‘Everyone can see it being a global shift in public opinion.’
Cannabis in its raw form is not recognised in the UK as having any medicinal benefit.
It is subject to strict controls, which means it cannot be prescribed or supplied to the public, and can only be used for research under a Home Office licence.
Despite this, the UK is one of the largest producers and exporters of legal cannabis to other countries. GW Pharmaceuticals has a licence to grow it for medical use to create its brands Sativex and Epidiolex, used to treat MS and epilepsy.
A Home Office spokesman told Metro.co.uk the government has no plans to legalise cannabis, medicinally or otherwise.
They said: ‘Cannabis is a controlled Class B drug, as there is clear scientific and medical evidence that it is a harmful drug, which can damage people’s mental and physical health, as well as harming individuals and communities.
The government is ‘absolutely committed’ to reducing drug use, they added.
Legalisation of cannabis
Uruguay was the first country to fully legalise cannabis in 2013.
In Canada, cannabis is expected to become legal for recreational use nationwide in August or September this year.
Alaska, California, Colorado, Maine, Massachusetts, Vermont, Washington and Washington DC have legalised cannabis for recreational use, and dozens of states allow it for medical use.
Many other countries allow it for medical use, including Israel, Italy, Denmark and Finland.
Germany, Italy and Australia have recently relaxed their laws and are seen as exciting markets within the industry.
‘I think the UK is probably going to take its regulation guidance from Canada, like Australia has,’ Max said.
‘Yes the the UK is late, but there could be a robust and viable domestic industry. It could be a springboard to the rest of Europe.’