Cannabis: the changing regulatory landscape in the UK

12 February 2021

The use of cannabis as a drug has been illegal in the United Kingdom ever since it was added to the Dangerous Drugs Act in 1928. Much has changed since then – for one, cannabis is now legal for recreational use in Canada and Uruguay and is legal for medicinal use in over 20 countries, including Argentina, Australia, Chile, Germany, Greece, Israel, Italy, Norway, the Netherlands, New Zealand, Poland, Switzerland and Thailand, among others. In the UK, the CBD industry has gained immense popularity and is currently worth £300 million, a figure which is expected to triple in the next five years.

Then, exactly 90 years after the drug was first prohibited in the UK, the medical use of cannabis was legalised following the cases of two epileptic children who benefited from using cannabis gaining substantial attention from the press and the public.

While the chances of the UK following suit from the US where cannabis has been legalised in 15 states (and counting) is hardly on the horizon, the legal landscape surrounding the substance is quickly evolving. In turn, traditional companies are heavily investing in the sector; pharmaceutical companies are eagerly seeking partnerships with budding start-ups to develop medicinal cannabis products and both alcohol and tobacco giants are acquiring the teams necessary to expand into this fast-growing market.

The liberalisation of cannabis policy across the globe continues to inspire entrepreneurs and medical researchers alike – but what support for radical legal change exists in the UK, and what direction will cannabis legislation take in the decade to come?

The use of medical cannabis in the UK

Two years have passed since the government legalised cannabis for medical use in November 2018 and so far, approximately 1.4 million people using cannabis for medical purposes are doing so via the legal routes. While the vast majority continue to self-medicate via the black market, this is expected to shift as the recent legislative changes bed into UK culture. At present, the law allows cannabis to be prescribed by a specialist doctor – the only cannabis products that can be sold in shops are CBD products. And yet, the UK is the world’s largest producer and exporter of medical cannabis, producing over 100,00kg a year. Two of the UK’s most well-known cannabis-based medicines are Epidyolex, which is used to treat two forms of epilepsy, and Sativex for multiple sclerosis. Both medicines were developed by British company GW Pharmaceuticals – the largest exporter of legal medicinal cannabis in the world. Further, according to recent data from the UK’s leading medical cannabis market access specialists Grow Biotech, the average price of a month’s supply of medical cannabis imported through Logist has dropped from £750 to £550, reducing the average monthly prescription cost by 27%, while the average price per gram has also fallen by 25%.

Challenges to cannabis legalisation in UK law

While the right foundations may be in place for medicinal cannabis to thrive in the UK, the laws we have in place that govern drug use do present certain technical challenges to the cannabis debate. One key example can be found in the Misuse of Drugs Act, which contains no exemption for products that contain THC below a certain minimum threshold. This is an issue for CBD products that inevitably have trace amounts of THC. Another roadblock presents itself in the Proceeds of Crime Act (POCA), that prohibits any dealing with the proceeds of ‘criminal conduct’ – according to the Act, this includes conduct that is lawful overseas but not lawful in this country. As such, overseas sales of medicinal cannabis are technically unlawful as per the POCA, unless an exemption were to be added to allow the sale of medicinal cannabis overseas. However, this exemption would need to address U.S. federal law which, despite state laws, still rules the use and possession of cannabis to be illegal. While there are already routes to operate within the existing laws, these technicalities serve to illustrate why regulatory change regarding the use of the substance in the UK has been slower than expected. While making multiple technical changes to current legislation that interlink with the laws of other jurisdictions will be necessary in encouraging the progress of medical cannabis, it seems this evolving area is too great and nuanced for this route alone to be sufficient.  Perhaps, when it comes to medical cannabis and CBD at least, the best approach would be to pursue an entirely new and custom set of controls that address both the opportunities and potential challenges that the drug presents, including its own consumer protections and licensing authorities.

Cultural challenges to legalisation of cannabis in the UK

While policy change relating to medical cannabis has fuelled a flurry of business activity in this young industry, cannabis for recreational use remains controlled as a class B drug under the Misuse of Drugs Act 1971. The penalties for unauthorised supply, possession, production and cultivation of cannabis haven’t changed either – in the UK, the punishment for cultivation is a maximum custodial sentence of 14-years, while possession still risks a maximum of five years. As such, it’s not hard to see how the cultural attitude towards cannabis in this country are mixed – this drug is categorised within the same legal bracket as ketamine, amphetamines and mephedrone specifically because the effects of very strong cannabis have been linked to serious mental illnesses. In fact, the NHS website openly warns that regular use of cannabis can lead to dependency, similar to alcohol, and severe mental health issues, such as psychosis. Although disputes by pro-cannabis groups, the debate around legalisation for recreational use centres around this fact and the long-held view that the substance is a “gateway drug” that leads users to more dangerous Class A drugs.

Nevertheless, many argue that the “war on drugs” approach has failed, citing studies that show cannabis to be the substance of choice from teenagers who find the substance easier to purchase than alcohol because of its strict regulation. In their view, the very laws that exist to deter children from using cannabis are having the opposite effect – of course, this stance fails to address the obvious fact that sales of alcohol are often made by those of age with the intention to distribute to underage drinkers – as such, there would be no reason why the same wouldn’t happen were cannabis legalised and regulated for recreational use amongst adults.

The future of cannabis laws in the UK

Surprisingly, legalisation in the UK actually polls lower when respondents are asked about the potential of taxation on the substance. Experts have attributed this unexpected response to scepticism towards business, coming from both those who identify as left and right on the political compass. They say when America sneezes, the world catches a cold – in the case of cannabis legalisation, it’s been a sniffle at best so far. Nevertheless, major social developments in the US do usually reach UK shores – and considering that there are nearly 250,000 people working full time in legal cannabis in America and new states overturning their laws on cannabis is set to produce tens of millions of jobs, it may be difficult for the UK to ignore the economic potential available. As this happens, cannabis companies will undoubtedly up the ante in their efforts to persuade the British public and UK government to relax laws around recreational use. Until then, medical cannabis firms will have their hands full trying to satisfy regulatory conditions to float their companies on the London Stock Exchange.

 

 

Copyright © 2020 360 Business & Private Client Law Limited. All rights reserved.