CBD para Pet

A Plan for a Legal and Regulated
UK Hemp and Cannabis Sector
The report was researched and funded by Tenacious Laboratories Limited.
This is not an official publication of the House of Commons or the House of Lords. It has not been approved by
either House or its committees. All-Party groups are informal groups of Members of both Houses with a common
interest in particular issues. The views expressed in this plan are those of the group.
The All-Party Parliamentary Group for CBD (Cannabidiol) Products works to encourage the
development of UK regulation on CBD products that reflect evidence-based policy, clear industry
guidance and the most certain basis for investors and entrepreneurs to enable this industry safely to
serve the public and the wider national interests. The group is co-chaired by Crispin Blunt MP and
Baroness Manzoor CBE.
More details of the group can be found at parliament.uk
This plan was compiled by the All-Party Parliamentary Group for CBD (Cannabidiol) Products with
research assistance from the Medical Cannabis Clinicians Society (MCCS), the Cannabis Industry
Council (CIC), the Cannabis Trades Association (CTA), the European Industrial Hemp Association
(EIHA), the British Hemp Alliance (BHA) and the Cannabis Services Advisory Board (Jersey).
© All-Party Parliamentary Group for CBD (Cannabidiol) Products, 2022.
2
PLAN FOR SUCCESS
A Plan for a Legal and Regulated UK Hemp and Cannabis
Sector
Crispin Blunt MP Baroness Manzoor CBE

(Co-chair) (Co-chair)
The potential benefits of a thriving hemp and cannabis industry to the UK – its jobs market, economy,
and meeting of 'Net Zero' climate obligations – are made out in this APPG paper, prepared with huge
and commendable efforts by the Secretariat, drawing on an immense consultation with the industry
through the Secretariat Advisory Board.
All the Parliamentarians associated with the APPG urge Her Majesty’s Government and the key
responsible Ministers and their advisors to read, understand, and as appropriate act on the plan and
data presented here.
The Opportunity
The potential benefits are startling: an estimated extra 594,000+ jobs, £5.5b in annual tax revenue,1
and environmental and agricultural benefits that will go a long way to helping us meet our carbon
neutrality commitments by 2050. This analysis lays out a framework for the adoption of a process and
timetable; with recommendations, actions, responsibilities, and timelines necessary for Government
and parliament to deliver a new legal economic sector that will greatly benefit the UK. It is of immense
potential benefit to the UK, but not yet understood by key decision makers and administrators.
This analysis presents how effective collaboration between government, parliament, and industry,
around hemp and cannabis, can generate inward investment, support for farmers and entrepreneurs,
rigorous trading standards, balance of consumer choice and protection, and expert service for patients.
It highlights amendments needed to key regulations from Novel Foods to Proceeds of Crime.
The mature market of Colorado, USA, is used as the base case study to enable a look into the future
of what a country aspiring to world class regulation and global bio-science leadership requires. It
illustrates the issues around securing the major economic prize that may flow from legalisation in the
future, but highlights the issues that must be addressed by any future government and parliament.
1 These figures are based on an extrapolation using Colorado’s numbers as well as additional considerations laid out in the APPG
Plan Model.
3
The opportunities include the effective destruction of the illicit market, successfully protecting children
by reducing child cannabis use, reducing psychosis (via the introduction of low-dose safe products) and
crime. From prescription medicines and on-shelf wellness products to high-protein cattle feed, carbon
credits, and all the many and varied uses and benefits of hemp and cannabis, the road map to achieve
these opportunities is laid out in this plan.
At a time when the Office for Budget Responsibility tells us we need 1.5 per cent of GDP additional
fiscal tightening at the beginning of each decade over the next 50 years2 (£37b a year in today’s terms)
in order to plug the UK's public debt, amongst the above public good is the financial incentive to build
a properly regulated sector that can turn the UK into one of a few lucrative worldwide hubs.
Background
The APPG, co-chaired by Baroness Manzoor CBE and Crispin Blunt MP, commissioned this
comprehensive analysis to identify the challenges to secure the UK’s appropriate participation in the
world’s fast-growing hemp and cannabis industry. Using data based on extrapolation from Colorado,
the most mature of the 37 US States to have legalised cannabis in some form or another to date, it
illustrates the scale of opportunity for the UK that the industry has the potential to bring.
Included is a framework for the adoption of a process and timetable. Further detailed work will
necessarily be part of the immediate next steps. So far, the UK industry has been markedly ineffective
in communicating coherent useable recommendations and, despite the best efforts of most involved, it
has been frequently side-tracked by sub-sector priorities at the price of the wider public benefits
available. Changing the emphasis to what can and should be done to achieve more than half a million
new jobs is essential, or those jobs will go elsewhere.
Analysis
The UK does not have to address the issue of legalised recreational THC to establish itself as a viable
commercial hub, although if and when it does the industry will need to be ready to respond along with
consumer protection agencies and the rest of the regulatory and enforcement actors. Today’s
regulations, such as Novel Foods, should not be used to allow a few producers to lock out all
newcomers at the price of not then developing a successful global industry.
As the best structural lead, Colorado provides us many lessons, not least – according to them – that
they should have launched a parallel plan for actively reducing illegal usage at the same time as
promoting the legal industry, not simply relying on the legal outperforming the illegal.
Industry can, already is, and needs to continue to participate in generating the viable choices, as should
the respective government departments, but ultimately success relies on timely decisions from elected
officials, properly and expertly advised by knowledge owned by Whitehall, as well as drawing on the
industry and its investors.
The report demonstrates clearly that an impressive opportunity is possible in the near term. Vast
medical, wellness, and economic benefits are available by forward-looking regulation and energetic
political and administrative leadership. Hemp and cannabis industry worldwide turnover is estimated to
reach £69b in 2026 from a pre-fully legalised level of c. £20b today.3 It is then expected to continue to
grow by more than 6% annually. By comparison, whisky’s worldwide turnover has levelled at £66b. Both
categories are seeing the premium segment out-performing non-premium, which also plays to the UK’s
strengths.4
2 Office for Budget Responsibility - Fiscal risks and sustainability – July 2022
3 The Global Cannabis Report: Growth & Trends Through 2025
4 Statista
4
Scotch whisky is more than just a convenient comparative with its 42,000 jobs and £5.5b in annual
turnover.5 It also provides a template for moving fast and first into the most lucrative and least
contentious premium sub-category, providing an immediate understanding of the costs and benefits,
given its own historic transition from prohibition, through legalisation to premium.
For cannabis and hemp production and sales to succeed here, the UK will need to make early use of
the business growth example template that whisky provides. Given the multiple jurisdictions considering
full legalisation, from more mature ones such as Canada and California to newer ones like New York
and Germany, the aim should be to give the UK the potential capacity to become a properly regulated
worldwide hub, with all the economic and public health benefits that implies.
The successful hubs will have sorted legislation, regulation, commercialisation, and enforcement at the
same time as addressing both evidentially valid and exaggerated concerns about what a successful
hemp and cannabis industry actually looks like, well beyond the current smell of marijuana on the
streets.
Success could include measured delivered benefits in soil regeneration, reduced deforestation, late-
season crops in the event of earlier crop failure, marginal land usage, climate change resistance, more
pollinators, carbon credit generation, high protein / low methane emission cattle feed, agri-tourism,
inflammation and pain relieving creams for gardeners, anxiety help without prescription anti-
depressants, sleep without prescription sleeping pills, long term pain relief with potentially fewer of the
212 codeine deaths per year,6 less cramp for MS sufferers, fewer epileptic fits for children and less
nausea for cancer patients and even palliative care for stiffness in dogs.
Success would also include addressing within the NHS so far failed issues of prescription medicines.
Success will also mean we are ready to have an informed and confident debate around crime, child
protection, consumer choice, jobs, and potential revenue of adult-use cannabis. Success would also
include addressing unintended criminality under current regulations and laws of a sensibly safe
wellness business. There is still a clear deficit in the perceived level of research to address, and we
recommend that Her Majesty’s Government equips itself with the capacity to assess current global
knowledge and to commission research as required, so if/when Her Majesty’s Government and
Parliament are ready to consider further regulation of cannabis products, it is done on the most informed
basis.
Failure would be being dragged unprepared to legalisation by Canada, Washington and Berlin, and
failing to take the economic opportunities presented in an area of obvious historic UK strength.
Conclusion
The UK’s fragmented industry is making great progress, not least in maturing to support this plan,
sponsored by this APPG, designed to be non-partisan, and as inclusive and transparent as possible.
This process has not been easy or perfect, but has enjoyed support from a genuinely broad range of
industry participants – both UK based and worldwide. Where appropriate, these organisations and
people are named, however a great many others have provided very significant input.
This plan is presented with a supporting conventional economic case, and with objectively evidence-
based statements and assumptions, which identify the distinct work requirements to a level of what
should be done, by whom, and when, to achieve a particular measured benefit. This plan is designed
to be comprehensive and not exclude or favour some participants over others.
For example, high protein hemp-based cattle feed for lower dairy herd methane emissions will need
DEFRA, industrial hemp industry representation, existing cattle feed wholesalers, carbon credit
formulation sign off, and agricultural research combined with a clear instruction to be ready with a roll
5 Scotch Whisky Association

6 Office for National Statistics (ONS)
5
out plan from 2023. The financial model included in the plan provides the numbers including jobs based
on clearly articulated assumptions that will of course need to be refined as part of the execution process.
This process will quickly involve other identified areas – for example feed merchants don’t want issues
over Proceeds of Crime legislation and need top-down assurance that it doesn’t apply. Current licensing
arrangements around test crops are not fit for purpose, and researchers need similar assurances to
feed merchants. The academics need to grow test crops under an overall permission from the Home
Office, not process a series of time consuming individual annual plot exemptions – not the fault of the
Home Office, they need similar assurances to the feed merchants.
Recommendations
The APPG for CBD products supports the aggressive timescale for actioning the recommendations to
secure the early opportunity now available for global UK leadership in this complex but exciting part of
the bioscience world.
There is an early opportunity for the UK to establish an international lead in advance of the next US
presidential election – structured correctly, led by Whitehall, and including cooperation between existing
trade bodies like the CIC, EIHA (UK), CTA, ACI, industrial hemp, environmental representatives and
commercial interests with the aim of measurable benefits to be achieved in 2023. By Autumn 2022 Her
Majesty’s Government:
(1) Issues terms of reference for the work required to create a hemp and cannabis industry.
(2) Names the Cabinet Minister responsible, and names the departmental Ministers responsible
for delivery of their part of the agenda.
(3) Seeks industry advice from all sectors, for example industrial hemp, carbon credits, cattle feed,
and Novel Foods.
(4) Scope the feasibility and methodology of establishing the UK as the world market leader in the
premium hemp and cannabis industry using Scotch Whisky as the benchmark – Spring 2023.
(5) Develops detailed implementation plans – Summer 2023.
6
Contents
Executive Summary ............................................................................................................................... 9
Background .......................................................................................................................................... 16
Opportunity .......................................................................................................................................... 18
Plan for the UK cannabis industry ....................................................................................................... 20
How this plan was prepared ................................................................................................................ 22
Industry segmentation ......................................................................................................................... 24
Hemp ................................................................................................................................................... 27
7.2 Background ............................................................................................................................... 29
7.3 Analysis ..................................................................................................................................... 30
7.3.1. Low-cost, high-value crop alternative ............................................................................. 33
7.3.2 Soil regeneration .............................................................................................................. 34
7.3.3 ‘Green’ building materials ................................................................................................ 35
7.3.4 Paper ............................................................................................................................... 38
7.4.5 Textiles ............................................................................................................................. 39
7.4.6 Non-woven products ........................................................................................................ 40
7.4.7 Composites ...................................................................................................................... 40
7.4.8 Innovative uses of hemp waste ........................................................................................ 41
7.4.9 Animal feed ...................................................................................................................... 43
7.4.10 Carbon credits ................................................................................................................ 44
7.5 Conclusion ................................................................................................................................. 45
7.5.1 Agriculture – raw materials .............................................................................................. 45
7.5.2 Industrial manufacturing – processed materials .............................................................. 46
7.5.3 Animal feed ...................................................................................................................... 47
7.5.4 Carbon credits .................................................................................................................. 48
7.6 Recommendations..................................................................................................................... 49
7.7 Actions ....................................................................................................................................... 51
7.8 Timeline ..................................................................................................................................... 52
Ingestible and topical products ............................................................................................................ 53
8.2 Background ............................................................................................................................... 55
8.3 Analysis ..................................................................................................................................... 56
8.3.1 Nutritious food .................................................................................................................. 56
8.3.2 Wellness products ............................................................................................................ 57
8.3.3 Cosmetics and body care products .................................................................................. 58
8.3.4 Animal care products ....................................................................................................... 59
8.3.5 Consumer choice and protection ..................................................................................... 60
8.4 Conclusion ................................................................................................................................. 61
8.6 Actions ....................................................................................................................................... 65
8.7 Timeline ..................................................................................................................................... 66
7
Medicinal cannabis .............................................................................................................................. 67
9.2 Background ............................................................................................................................... 69
9.3 Analysis ..................................................................................................................................... 70
9.4 Conclusion ................................................................................................................................. 72
9.6 Actions ....................................................................................................................................... 75
9.7 Timeline ..................................................................................................................................... 76
Legal adult-use market ........................................................................................................................ 77
10.1 Background ............................................................................................................................. 78
10.2 Analysis ................................................................................................................................... 78
10.3 Tax revenue............................................................................................................................. 78
10.4 Job creation ............................................................................................................................. 79
10.5 Consumer protection ............................................................................................................... 80
10.6 Cannabis tourism..................................................................................................................... 81
10.7 Conclusion ............................................................................................................................... 83
Lessons learned .................................................................................................................................. 84
11.1 United States ........................................................................................................................... 85
11.1.1 Eradicating the illicit market ........................................................................................... 86
11.1.2 Key takeaways ............................................................................................................... 87
11.1.3 Recommendations ......................................................................................................... 89
11.1.4 Actions ........................................................................................................................... 90
11.1.5 Timeline ......................................................................................................................... 91
Cannabis industry ................................................................................................................................ 92
review questionnaire ............................................................................................................................ 92
Glossary ............................................................................................................................................... 94
Abbreviations ....................................................................................................................................... 98
Appendix ............................................................................................................................................ 100
Acknowledgements ............................................................................................................................ 115
8
1.0
Executive Summary
1.1 Financial summary
Sector Department Gross Sales Tax Take Jobs

(£000s) (£000s)
Medicinal Cannabis Home Office / MHRA £3,300,590 £755,840 81,570
Topicals Office for Product £23,950 £4,790 9,725

Safety & Standards /
Trading Standards
Ingestibles Food Standards £1,996,580 £399,320 29,175

Agency, Veterinary
Medicines
Directorate / Trading
Standards
Agriculture DEFRA £1,459,940 £292,000 42,930
Industrial DEFRA / BEIS £1,608,730 £321,750 21,620

Manufacturing
Animal Feed DEFRA £765,940 £153,190 9,510
Carbon Credits DEFRA / BEIS £1,285,340 £254,920 31,650
Adult-Use Cabinet Office £21,802,090 £3,308,940 368,000
Total £32,243,160 £5,490,750 594,180

*Expected projections as of 2027.
10
1.2 Tax, Jobs and Actions by Department
Topic Application Department Tax Take (£000s) Jobs
Medicinal Cannabis Oil MHRA £170,660 31,370
Medicinal Cannabis Flower MHRA £585,180 50,200
Total £755,840 81,570
Department Actions
1. HO Drugs and Firearms Licencing 1. The Home Office and MHRA should work
Unit together to:
2. Medicines and Healthcare products a. produce a simple guide to those
Regulatory Agency applying for high-THC cultivation
1.
licenses.
b. streamline and coordinate the
application process.
2. make all applications transparent
1. Home Secretary 1. Amend wording in paragraph 4 of The

2. Advisory Council on the Misuse of Misuse of Drugs (Amendments) (cannabis
Drugs and Licence Fees) (England, Wales and
2.
Scotland) Regulations 20187 to allow GPs
and prescribing pharmacists to prescribe
cannabis.
1. Medicines and Healthcare products 1. Commission a re-assessment of NICE

Regulatory Agency guidelines.
2. National Institute for Health and Care
3. Excellence
3. Commission on Human Medicines
4. British Pharmacopoeia
5. Independent Assessor
1. Independent Assessor 1. Conduct or contract for a proper and

thorough health economic analysis of
4.
adding medicinal cannabis to the Drug
Tariff.
7 The Misuse of Drugs (Amendments) (Cannabis and Licence Fees) (England, Wales and Scotland) Regulations 2018
11
Topicals Creams OPSS/TS £2,630 5,350
Topicals Balms OPSS/TS £1,200 2,430
Topicals Lotions OPSS/TS £720 1,460
Topicals Pet lotions VMD/TS £240 485
Total £4,790 9,725
Ingestibles Vapes FDA/TS £232,400 12,000
Ingestibles Beverages FDA/TS £140,140 6,675
Ingestibles Capsules FDA/TS £12,000 3,750
Ingestibles Tinctures & Oils FDA/TS £9,950 3,750
Ingestibles Gummies FDA/TS £4,830 3,000
Total £399,320 29,175
Department Actions
1. Advisory Committee on Novel Foods 1. Commission a review to provide clear

and Processes definitions to differentiate between hemp
1.
2. Independent Assessor food and supplements.
2. Consider future reform of the NF process.
1. Advisory Committee on the 1. Set commercially viable THC limits in legal

2.
Microbiological Safety of Food cannabis-based products.
1. Advisory Committee on the 1. Introduce and enforce a harmonised

Microbiological Safety of Food standard testing protocol for all cannabis-
3.
2. United Kingdom Accreditation based products.
Service
1. Advisory Committee on the 1. Make CoA, CoO and full traceability

Microbiological Safety of Food mandatory for all foods and food
4.
2. United Kingdom Accreditation supplements.
Service
1. Advisory Committee on Novel 1. Set clear product definitions based on

Foods and Processes content and potency and associated testing
5. 2. Advisory Committee on the and labelling guidelines.
Microbiological Safety of Food 2. Set requirements to specify any synthetic
ingredients on product label.
12
Agriculture Hemp flower DEFRA £51,650
Agriculture Hemp fibre DEFRA £31,260 32,930
Agriculture Hemp shives DEFRA £48,100
Agriculture Hemp oil DEFRA £71,130
Agriculture Hemp protein powder DEFRA £34,700 10,000
Agriculture Hemp dehulled seed DEFRA £55,160
Total £292,000 42,930
Industrial Hempcrete DEFRA / BEIS

£203,500 10,000
Manufacturing
Industrial Hemp insulation DEFRA / BEIS £108,850 9,430

Manufacturing
Industrial Biochar DEFRA / BEIS £9,400 2,190

Manufacturing (Soil enrichment)
Total £321,750 21,620
Animal Feed Cattle feed DEFRA £48,110
Animal Feed Pigs feed DEFRA £21,550

9,510
Animal Feed Poultry feed DEFRA £70,850
Animal Feed Other feed DEFRA £12,680
Total £153,190 9,510
Carbon Credits CO2 sequestered during DEFRA

£250,860 22,500
cultivation
Carbon Credits CO2 sequestered during BEIS

£4,060 9,150
construction
13
Total £254,920 31,650
Department Actions
1. Drugs and Firearms Licencing 1. Transfer hemp licencing from the Home Office to
Unit DEFRA.
1. 2. Animal & Plant Health Agency
3. Advisory Council on the
Misuse of Drugs
1. Animal & Plant Health Agency 1. Simplify licencing process:
a) Allow farmers to apply for hemp cultivation

licence year-round.
b) Improve the user interface of the online
application portal.
2.
c) Speed up the application process.
d) Dispense with the requirement for DBS checks
for hemp cultivation licences.
e) Field selection should be based on agricultural
and environmental considerations, not only
security.
1. Animal & Plant Health Agency 1. Expand the national list of registered seed varieties
2. External Research Partners to include registered EU hemp varieties and allow
for registration of hemp varieties with up to 0.3%
THC.
3.
2. Establish partnerships with UK plant genetics
research centres to develop hemp varieties suited
for UK climate with accelerated approval and
validation timelines.
1. Animal & Plant Health Agency 1. Amend hemp licence conditions requiring farmers
to destroy hemp in field if the biomass exceeds
4.
0.3% THC.
1. Animal & Plant Health Agency 1. Commission a review of suitable THC limit in
2. Advisory Committee on the products manufactured from hemp.
5.
Microbiological Safety of Food
1. Drugs and Firearms Licencing 1. Amend Home Office guidelines to remove

Unit restrictions on the use of the controlled parts of the
2. Advisory Council on the plant under certain conditions.
Misuse of Drugs 2. Remove the licence condition requiring the flowers
6.
3. Animal & Plant Health Agency and leaves to be destroyed.
3. Define specific end uses e.g., tea/ oils etc to allow
production of food products from hemp flowers,
leaves & seeds.
14
Department Actions
1. Home Office / Home Secretary 1. Initiate consultations about amendments to

POCA to enable businesses engage and
1.
invest in UK’s legal medicinal cannabis
market.
1. Financial Conduct Authority 1. Ensure the FCA issues clear guidance to

2. the industry on pathway to listing on the
LSE.
15
2.0
Background
2.1 Background
In 1933 the US federal government introduced the 21st Amendment to the Constitution, which
overturned the failed policy of prohibition. The previous 18th Amendment failed to curb the production,
sales, and consumption of alcohol, all of which led to a rise in organised crime and decline in tax
collections. Consequently, whilst in the grips of the Great Depression, the federal government looked
to alcohol to replenish tax revenues and provide an estimated 500,000 jobs for the US economy.8
Eighty-nine years later, the global cannabis market is in a similar position with the end of prohibition in
sight and the opportunity crystal clear. Research by New Frontier Data, a leading provider of market
research on the cannabis industry, estimates the total global market for cannabis was worth £337.4b in
2020 and expects it to grow to £403.5b by the end of 2025.9 Legal global sales of cannabis (excluding
hemp and CBD products) in 2021 accounted for £23.9b and are expected to grow to £41.5b by 2025.10
Given that the legal sales represent only 7% and 10.2% of the total market in 2021 and 2025, with
accelerated legalisation, the market could grow even faster.
The North American market has been at the epicentre of this wave of liberalisation and in 2021 its legal
sales stood at £22.9b, accounting for 96.8% of global sales.11 This excluded the CBD market, which is
estimated to be worth further £10.4b.12 The European market is poised to be the next booming legal
cannabis market. It was estimated that £291.2m of product was traded in 2021 and this is expected to
grow rapidly to £1.87b by 2025.13 For comparison, the worldwide turnover of Scotch Whisky has been
steady at £66b as of 202214 (although again showing growth in the premium segment), and annually
provides £5.6b in gross value added (GVA) to the UK economy, with exports in 2021 worth £4.63b.15
8 Economic Effects of Prohibition Repeal, Granger, G. (1931)

12 Global Market Insights, CBD Market Size by Product
13 Prohibition Partners, The European Cannabis Report: 7th Edition
14 Statista
17
3.0
Opportunity
3.1 Opportunity
Over the past decade, overwhelming consumer demand has driven exponential growth in the global
cannabis industry. The global market for cannabis and CBD products is on a trajectory to grow from
£34.3b in 2021 to £64.4b in 2025, suggesting industry growth of 21.8% annually, with highest growth
in the premium product segment.16,17 Additionally the hemp market was £5.1b in 2020 and is forecast
to be worth £110.2b in 2030, equating to annual growth of 36.1%.18
Consumer acceptance of cannabis and other active plant-based ingredients has accelerated in recent
years and removed much of the stigma associated with psychoactive and psychedelic substances.
Beyond the plant itself, the market now includes a wide variety of formulated, value-add products such
as high-protein foods, wellness supplements and cosmetics. With advancing legalisation and rapidly
shifting public attitudes, cannabis-based products are set to become part of the mainstream consumer
offering globally.
Beyond consumer products, industrial hemp offers a plethora of economic opportunities and is likely to
play a key role in tackling climate change over the coming decades. One hectare of industrial hemp can
absorb 8 – 15 tons of CO219 above the surface (forests typically absorb 2 – 6 tons) and the biomass
can be turned into building materials, insulation, paper, textiles and bioplastics, to name a few.
Cultivation itself offers farmers a high-value crop alternative that can regenerate soil, improve yield of
other crops, and provide a range of new revenue streams.
Amid rising consumer demand and economic pressures brought by the COVID-19 pandemic and other
global crises, governments around the world are recognising cannabis as a significant driver of
economic growth and tax revenues. In this context, the debate around full legalisation in Washington,
Berlin and other world capitals has shifted from ‘if’ to ‘how’. The UK has significant domestic capability,
expertise, and consumer demand for cannabis-based products. Post-Brexit, there has never been a
better time for the UK to seize the opportunities offered by the sector and establish itself at a leader in
the emerging global cannabis industry.

17 Global Market Insights, CBD Market Size by Product
18 Reportlinker - Industrial Hemp Market
19 The Centre for Natural Material Innovation
19
4.0
Plan for the UK cannabis industry

4.1 Plan for the UK cannabis industry
The nascent cannabis Industry offers a once-in-a-generation opportunity for investment in new
consumer and industrial products categories that will become staple goods in the years to come.
Notwithstanding the current operational constraints, cannabis is one of the most popular consumer
products globally, with the UN drug agency and the data aggregator Statista estimating that more than
200m people consume it on a regular basis.20 Some 70 countries around the world have now introduced
provisions for legal access to medicinal cannabis and 10 countries21 have de-criminalised or legalised
adult-use entirely.22 Between 2019 and 2020 alone the global cannabis market grew by 50.9%.23
Driven by overwhelming consumer demand, over the past five years the UK has seen a huge increase
in the number of companies manufacturing and selling cannabis-based products. However, due to
regulatory uncertainty and growing pains associated with a fledgling industry, many of those businesses
have encountered operational constraints and business interruptions, which in turn led to cash flow
issues. Against this backdrop, the industry is now prime for a reset. With the government and industry
working together, the UK has a unique opportunity to set the right foundation for a multi-faceted
cannabis industry and seize one of the most promising economic opportunities of our time. There are
lessons to be learned from more mature markets, such as Colorado, that could help the UK boost its
economy, generate jobs and tax revenues, all while ensuring that consumers have access to safe and
effective products.
This plan sets out the steps required to achieving a well-regulated, multi-faceted and competitive UK
cannabis industry. If implemented, the plan could future-proof the UK farming industry, boost
technological innovation and domestic manufacturing, create more than 594,000 jobs and contribute
£5.5b in annual tax revenue to the UK economy.24
The plan encompasses all segments of the cannabis industry, including the production of
pharmaceuticals, agricultural and industrial materials, and consumer products. It addresses the need
for coordination across different government departments and highlights where regulations ought to be
revised to allow for UK businesses to grow and successfully compete in international markets. Finally,
it provides a commercial analysis of the monetary value of transforming the UK into a global leader in
this space.
This opportunity is urgent and time limited. Countries around the world are aggressively competing to
develop production excellence and become destinations for cannabis-related investment,
manufacturing, professional services, and tourism. Post-Brexit, the UK has a unique opportunity to
establish itself as a trusted producer of premium products and a destination of choice for international
capital. The government must act fast to develop robust regulations that encourage inward investment,
support farmers and entrepreneurs, protect patients and give consumers choice. In doing so, it could
effectively eradicate the illicit market by making it uncompetitive, while creating a new economic sector
that will pay dividends for years to come.
20 Statista: Estimated number of cannabis users worldwide from 2011 to 2019, by region
21 Regulated- (Canada, United States, Uruguay, Netherlands, Guam and Northern Mariana Islands,) Decriminalised – (South
Africa, Georgia, Mexico and Spain)
23 Fortune Business insights
24 Internal Modelling - APPG Plan Model
21
5.0
How this plan was prepared

5.1 How this plan was prepared
This plan was prepared by the Secretariat to the All-Party Parliamentary Group for CBD (Cannabidiol)
Products, which works to encourage the development of UK regulations on CBD products that reflect
evidence-based policy, clear industry guidance and the most certain basis for investors and
entrepreneurs to enable this industry to safely serve the public and the wider national interests. The
group is co-chaired by Crispin Blunt MP and Baroness Manzoor CBE.
The plan is the result of wide-ranging consultations with representatives of the UK and devolved
governments, industry bodies and other industry stakeholders. These included:
1. Medical Cannabis Clinicians Society (MCCS)

2. Cannabis Industry Council (CIC)
3. Cannabis Trades Association (CTA)
4. European Industrial Hemp Association (EIHA)
5. British Hemp Alliance (BHA)
6. Cannabis Services Advisory Board (Jersey)
Invaluable experience and ‘lessons learned’ were also provided by the Government of Jersey, via the
Cannabis Steering Committee, a cross-governmental working group dedicated to developing the
domestic cannabis industry, and the US Cannabis Council (USCC), a strategic alliance that combines
the collective resources of many of the largest cannabis companies, prominent advocacy organisations
and hundreds of thousands of individuals to speak in one voice for ending federal prohibition in the
United States.
Additionally, the plan was informed by feedback from individual industry participants who have filled out
a questionnaire prepared by the Secretariat, which covered wide scope of areas that affect the industry.
The Questionnaire is Include in the Appendix of this report.
The industry consultations provided a clear picture of the key areas of opportunity for a domestic
cannabis industry. The UK already is a world-leading centre of cannabis research and manufacturing,
and the government should preserve and enhance that reputation by developing an NHS-led
programme for patients to gain access to high-quality and affordable cannabis-based medicines. With
the recent surge in consumer interest in CBD, the government should ensure the availability,
affordability and range of CBD products on offer, to protect consumers and eradicate the need for the
illicit market.
Quite apart from the consumer aspects of cannabis, however, the largest market opportunity lies in
using industrial hemp – a versatile, economic and sustainable resource with no intoxicating properties
– for a wide range of agricultural, industrial and consumer applications. With clear regulations and good
governance, the economic potential of the total cannabis market far exceeds the maximum extent of
the medicinal and CBD markets alone.
23
6.0
Industry segmentation
24
6.1 Industry segmentation
There is a commonly made distinction between industrial hemp and medicinal cannabis. Botanically,
there is only one species of cannabis sativa L. However, genomic research supports the notion that
over thousands of years of cultivation, cannabis farmers have selectively bred cannabis sativa into two
distinct cultivars:25
§ Low-cannabinoid, high-fibre varieties for production of fibre and seeds.

§ High-cannabinoid varieties for production of medicines.
From a commercial perspective, outdoor and indoor-grown cannabis are two very distinct crops that
require entirely separate approaches. The cultivation, processing, supply and marketing of both
categories of products are completely divergent. Industrial hemp is farmed in open field, like any other
agricultural crop, while medicinal cannabis is primarily grown in glasshouses. Famers produce food and
pharmaceutical companies produce medicines. Businesses must determine their target product and
market because there is little cross-over between the processes and expertise of the two product
categories.
Cannabis
Outdoor Indoor
(<1% THC) (>1% THC)
Industrial Animal Carbon Medicinal

Agriculture Manufacturing Topicals Ingestibles Pharmaceutical Adult-use
Feed Credits Cannabis
Hemp -based
Flower Hempcrete protein feed Cosmetics Food Unlicensed Prescription
Supplements Medicines Medicines
for livestock
Hemp
Fibre Body care Pet Products
Insulation
Shiv Paper Inhalable
Seeds, E.g Oil Textiles / Non-

& Protein woven
Powder
Dehulled / Biochar
Hulled Seed
25 ScienceDaily, “How Hemp Got High: Cannabis Genome Mapped,” October 24, 2011, citing van Bakel et al., “The Draft Genome
and Transcriptome of Cannabis Sativa.”
25
Medicinal cannabis offers the UK the opportunity to develop a domestic biopharmaceutical industry,
create high-skills jobs, attract investment, and generate significant returns. Industrial hemp offers an
opportunity for UK farmers to diversify their crops while bringing other benefits, such as improvement
in soil health, reduce soil compaction and nutrient loss, and to engage in carbon sequestration. Both
sectors require expertise, significant capital investment and a robust regulatory framework.
There is an opportunity to develop both segments in parallel, but the success of this strategy will depend
on the understanding of the needs of the different sub-sectors of the cannabis industry and cooperation
between the government and industry representatives.
The following sections provide an overview of the key sectors of the cannabis industry and discuss their
potential contributions to the UK economy.
26
7.0
Hemp
27
7.1 Hemp

(£000s) (£000s)
Agriculture DEFRA £1,459,940 £292,000 42,930
Industrial DEFRA / BEIS £1,608,730 £321,750 21,620

Manufacturing
Animal Feed DEFRA / VMD £765,940 £153,190 9,510
Carbon Credits DEFRA / BEIS £1,285,340 £254,920 31,650
TOTAL £5,119,950 £1,021,860 105,710
28
7.2 Background
Hemp is a highly versatile crop that has been cultivated around the world for centuries. Its fibres and
central woody ‘shiv’ can be used to create products such as building materials, textiles, paper,
bioplastics, car parts and livestock bedding. Hemp seeds, which are high in protein, gamma-linolenic
acid and offer the perfect source of omega-3 fats for humans, are used to produce high-quality
functional oil, protein powders with many applications in the meat-free category, and nutritious seed
cake for animal feed.
Low-THC cannabis Sativa hemp is not a new crop to England. In fact, to

some extent Britain’s greatness was built on the thriving hemp industry
in the 15th and 16th Centuries. Hemp was so valuable during the reigns
of King Henry VIII and Queen Elizabeth I that it was illegal not to grow
hemp, and people even paid their taxes with it (a quarter of an acre per
landowner (one root) had to be planted with hemp). Its fibres were so
crucial to the British navy – providing everything from rope to sails – that
it could be said hemp was a great enabler of British global exploration.
In recent years, interest in the use of hemp-derived cannabidiol (CBD) in ‘wellness’ products has led to
a resurgence in hemp cultivation around the world. CBD, the primary cannabinoid found in hemp, is
present in concentrations ranging from 0.5% to 9.9%26 in the upper third of the plant. Hemp extracts
containing CBD – as well as isolated CBD – can be utilised in the production of pharmaceutical drugs,
food supplements, cosmetics, and a range of pet care products, depending upon local licensing
restrictions.
Increased need for sustainable farming and efforts to combat climate change around the world have
also prompted growing numbers of farmers to add hemp to their crop rotations. Against the backdrop
of global and national environmental initiatives, including the UK government’s plan of achieving the
‘Net Zero’ target by 2050, hemp is gaining prominence as a powerful tool in tackling the adverse effects
of climate change.
26 Impact of Harvest Time and Pruning Technique on Total CBD Concentration and Yield of Medicinal Cannabis
29
7.3 Analysis
The cultivation of industrial hemp for food, feed, cosmetics, fibre or carbon credits is an agricultural
activity whose benefits are well-documented and there is no evidence of public harm. The US and many
European countries are recognising the benefits and versatility of industrial hemp and supporting their
farmers with entry into this fast-growing market.27 The area dedicated to hemp cultivation in the EU has
increased from 19,970 hectares in 2015 to 34,000 hectares in 2019, representing a 70.2% increase. In
the same period, the production of hemp increased from 94,120 tons to 152,820 tons, a 62.4% increase.
As of 2019, France was the largest European hemp producer, accounting for more than 70% of hemp
production in the EU, followed by the Netherlands (10%) and Austria (4%).28 Since then, other countries,
notably Italy, Poland, Slovenia, Croatia and the Baltic states, have significantly increased their hemp
production.
EU land area used for hemp cultivation (2015-2019)

40
35 34.0
Hemp Cultivation (Ha)
30 28.0
27.0
25
21.8
20.0
20
15
10
0
2015 2016 2017 2018 2019
27 Benzinga
28 Europa
30
Most global hemp producers regulate the crop as an agricultural commodity, not a controlled substance,
and place the industry under the regulatory remit of an agricultural department. To put the UK on a
competitive footing with other hemp-producing countries, the licencing of industrial hemp cultivation
should be moved to DEFRA, in line with the majority of Europe.
Country Licensing Body
Austria No Licence Required
Belgium Regional Governments
Bulgaria Ministry of Agriculture, Food and Forestry
Croatia Registry of Industrial Hemp Growers (Ministry of Agriculture)
Cyprus Department of Agriculture
Czech Republic No Licence Required
Denmark Agency for Agriculture
Estonia Chamber of Agriculture and Commerce
France National Agency for the Safety of Medicines and Health Products (ANSM)
Germany Federal Ministry of Food and Agriculture (BMEL)
Greece The Department of Rural Development and Control (TAAE)
Ireland Agriculture and Food Development Authority (TEAGASC)
Italy Ministry of Agricultural, Food, Forestry and Tourism Policies (MIPAAFT)
Lithuania Ministry of Agriculture
The Netherlands Ministry of Agriculture, Nature and Food Quality
Poland National Agricultural Support Centre (KOWR)
Portugal Ministry of Agriculture
Romania County Directorate for Agriculture
Slovakia Ministry of Health
Slovenia Ministry of Agriculture, Forestry and Food
Spain No Licence Required
Sweden Board of Agriculture
UK Home Office - Drugs and Firearms Licensing
Although the UK has a history of hemp farming, little of it has taken place in recent decades and the
country now lags far behind its European neighbours. At present, only about 20 farmers in the UK grow
hemp on a total of 800 hectares.29 This is largely the result of onerous regulations. In the UK, cultivating
industrial hemp constitutes a “special purpose” under the Misuse of Drugs Act 1971 (MDA), meaning it
is permitted once a licence is obtained. As such, hemp farmers must meet onerous requirements
associated with the licencing of controlled substances:
29 Source: CIC
31
• Complicated process. Secure a renewable three-year Home Office licence, which is
constantly changing and complicated to fill out.
• Licence timeframe. The licence is often awarded when it is too late in the season for farmers
to plant the crop.
• DBS check. This licence requires every farmer to provide an enhanced Disclosure and Barring
Service (DBS) check for every employee.
• Flower prohibition. The flower and leaf are prohibited to be used for processing.
These restrictions provide regulatory uncertainty and add cost, as a result disincentivising farmers from
engaging in the activity.
However, there is significant interest among farmers in reviving the sector. In 2021 the Cannabis
Industry Council (CIC) conducted a survey of UK farmers to establish interest in hemp cultivation. Of
those who responded, the overwhelming majority expressed a desire to add hemp to their crop rotation.
Have you cultivated Are you interested in cultivating

hemp before? hemp in the future?
0%
48% 52% 100%
Yes No Yes No
Source: Cannabis Industry Council, 2021 – Great British Hemp Farming Survey (56 responses)
While the UK is currently out of step with the global hemp industry, minor legislative amendments
making it easier for farmers to grow and sell hemp would boost economic output and have a lasting
positive impact on the rural economy. An analysis of current market trends and farmer interest indicates
that, with improved hemp licencing, by 2027 more than 220,000 hectares of hemp would be added to
UK cultivation. Using current market prices per kg of hemp biomass, a conservative estimate would see
the biomass generating £1.5b in additional income for farmers in the UK.30
Aside from the purely commercial benefits, hemp cultivation has the potential to improve crop resilience
and yields, regenerate soil and unlock new revenue streams through the production of processed
materials, animal feed and carbon credits.
32
7.3.1. Low-cost, high-value crop alternative
Factors such as price pressures, negative effects of high-intensity farming and increasing frequency of
extreme weather events are forcing farmers to look for new ways to achieve desired economic outputs
from their land. UK farmers need a greater range of spring break crops, as many current alternatives
have become unprofitable or have succumbed to crop infestation. Due to its relatively late planting date
and an annual crop cycle, hemp integrates well into existing annual crop rotations and could be a good
second option for farmers if severe weather caused the loss of winter crops or early spring crops.
Preliminary results from at trial at Rodale Institute (US) suggest that the presence of hemp as a summer
crop and its earlier harvest date suppressed weeds season-long and provided a wider window for
establishing the winter crop.
A study assessing 23 crops along 26 biodiversity parameters, identified

hemp as superior to most major crops in terms of limiting damage to
biodiversity. On the contrary, as it is grown with little or no synthetic
phytosanitary products, hemp can help enhance biodiversity in rural
areas. The flowering cycle usually occurs between July and September,
coinciding with a lack of pollen production from other farm crops. Being
a wind pollinated, dioecious and staminate plant, cannabis produces
large amounts of pollen, a vital nutritional source for bees during periods
of floral scarcity. A study on the bee population in hemp fields identified
23 different genera in northern Colorado (US) plantations, with a majority
of Apis mellifera at 38%, followed by Melissodes bimaculata at 25% and
Peponapis pruinosa at 16%.31
Additionally, hemp does not succumb to the many common consequences of current narrow cropping
choices – including herbicide resistant black grass, brome grass or ryegrass – and therefore can be
grown successfully without the use insecticides, herbicides or fungicides. According to an internal
survey conducted by the EIHA, already 50% of EIHA members use natural fertilisers like manure or
slurry and many indicate that hemp is an ideal crop for organic agriculture and cultivation near surface
water.
Being a fast-growing crop and having a high leaf turnover rate, hemp will, if grown in ideal conditions,
fully cover the ground three weeks post-germination. The dense leaves rapidly form a natural soil cover
material that reduces water loss and soil erosion. In addition, fallen leaves provide vital nutrition for the
soil. If intended for fibre, hemp stalks are an important nutritive organic matter for the soil during retting.
Because of its height and shading capacity, hemp efficiently eliminates weeds leaving the soil in optimal
condition.
When used in crop rotation, hemp helps to break the cycle of pests and diseases affecting other crops.
Currently, it is common for farmers to follow the same narrow diversity rotation of two years of wheat
(or other cereal) followed by rape. If hemp was to be introduced, it would naturally eradicate the flea
beetle population, one of the major crop pests in the UK.
Research also indicates that adding hemp to crop rotations improves the yields of subsequent crops.
Recent trials in the UK have provided evidence that winter wheat, planted after hemp, increased in yield
by 15-20%.32 High hemp planting densities also reportedly suppress weed growth and seed return to
the soil, reducing herbicide requirements for subsequent crops.33
31 Bee diversity and abundance on flowers of industrial Hemp, O'Brien, C.; Arathi, H.S.
32 British Hemp Alliance
33 Effect of industrial Hemp (Cannabis sativa L) planting density on weed suppression, crop growth, physiological
responses, and fibre yield in the subtropics
33
7.3.2 Soil regeneration
Hemp is an excellent organic tool for tackling soil pollution and compaction issues stemming from
intensive farming and poor land management practices.
According to estimates by the World Wide Fund for Nature (WWF), the land in England and Wales is
being destroyed 10 times faster than it is being created34 and there is unprecedented demand for
sustainable and scalable farming techniques. Without a shift in the application of fertilisers, pesticides
and monoculture crop growth, degradation will continue at an alarming rate. The Nature Friendly
Farming Network (NFFN), a UK-based farming community initiative, estimates that without any let up
in the rate of soil erosion, the UK’s topsoil could become fully depleted within the next 60 years.35
Hemp can be used in soil remediation because it has the ability to absorb pollutants and heavy metals
such as lead, nickel or cadmium. The large-scale cultivation of industrial hemp has been well
documented in areas like Puglia in Italy and Chernobyl in Ukraine, where it has been used to
decontaminate some of Europe’s most polluted soils. Because of the bioaccumulation in the aerial part
of the plant, it is important to identify the right applications for such biomass.
Hemp can also help farmers with soil compaction issues. The plant has long tap roots that can penetrate
up to 3 meters deep into the soil, and a strong network of fibrous roots that break up the compacted
soil, stimulate worm movement, and stave off erosion. Additionally, hemp ’s dense leaves become a
natural soil cover, reducing water loss and staving off soil erosion.
Hemp must be recognised for its net carbon positive impact, as it also provides renewable,
biodegradable, low impact materials for thousands of different uses, and is a feasible solution to
petrochemical products. The environmental benefits derived from hemp cultivation fulfil the objectives
of the Environmental Land Management (ELM) scheme, which is due to launch in England in 2024. By
aligning government strategies with effective regulations, the UK will be able to boost the rural economy
and reverse the continued degradation of UK farmlands.
34 World Wildlife Fund, Inc.

35 Nature Friendly Farming Network
34
7.3.3 ‘Green’ building materials
As discussed above, hemp cultivation offers economic and ecological benefits to farmers that are
independent of the global price of hemp biomass. However, in the long term, UK’s unrefined farming
output will not be able to compete on price with mass-scale hemp growers such as the US and China.
For that reason, a key tenet of the UK’s hemp industry strategy is investment in R&D, processing
infrastructure, and specialist manufacturing. Using hemp as a raw material can achieve many of the
targets outlined in the UK’s bioeconomy strategy, which aims to produce “smarter, cheaper materials
such as bio-based plastics and composites for everyday items, as part of a more circular, low-carbon
economy.”24
Hemp biomass has wide application in the building materials trade, offering high performance and
carbon-negative construction solutions. Hemp shivs are used to produce ‘hempcrete’, a hemp-lime
composite walling and insulation material which, in combination with structural materials, can deliver
net-zero carbon building systems that lock up more carbon than is produced during construction.
Hempcrete is non-flammable, resistant to mould and bacteria, naturally regulates humidity and has an
exceptional thermal and acoustic performance. Additionally, hemp fibres are an effective alternative to
traditional polyurethane foams, offering far superior thermal insulation performance and therefore a
reduction in the cost of heating.
The use of low-embodied-carbon, bio-based materials is a key tool for the UK to reduce buildings’
carbon footprint while increasing their energy efficiency. Hemp-based construction materials have an
exceptional thermal performance which reduces energy consumption while sequestering carbon. These
materials include hempcrete, hemp wool and fibre-board insulation. While the production of one ton of
steel emits 1.46 tons of CO2 and one ton of reinforced concrete emits 198kg of CO2, one square meter
of timber framed, hemp-lime wall (weighing 120kg) sequesters 35.5kg of atmospheric CO2 for the
lifetime of the building (without considering the energy cost for the transportation and placement of the
material).36
The UK government has long been searching for sustainable alternatives to traditional building
materials. As far back as 2010, a report by the Department for Business, Innovation and Skills,
concluded that the UK’s construction industry produced 300m tons of CO2 emissions and the only way
to reduce those emission was by moving away from using traditional construction materials.37 With the
convergence of two government agendas, the pledge to alleviate the housing shortage and the need
for energy efficient homes to meet ‘Net Zero’ targets, availability of domestically-produced hemp-based
building materials could provide the economic stimulus for the growth of a new manufacturing sector
with significant global potential.
36 Bath’s Building Research Park, Dr Mike Lawrence (Director)

37 The Department for Business, Innovation and Skills - Low carbon construction innovation & growth team: final report
35
As of 2019, the UK annual greenhouse gas emissions were estimated at 435.2m tons of CO238, of
which, based on global trends, up to 38% of emissions could be accounted for by the construction
industry.39 As part of its 2050 Net Zero strategy, by 2035, the UK government intends to cut all
emissions by 78% to bring the UK in line with 1990 levels.40 This could be achieved in two ways:
1. Using carbon-negative construction materials to lock-up carbon. It takes over 34.6 tons
of CO2 to build an average UK house41 and construction of 200,000 houses would contribute
6.9m tons of CO2 annually. However, using hemp-based materials instead of mainstream
construction products would mean an average sized house (1,500 ft2 with 300mm thick walls)
would capture 13.1 tons of CO242 (allowing for transport and assembly), equating to a total
potential capture of over 2.62m tons. This equates to a 138.0% reduction.
2. Using natural insulation materials to improve thermal efficiency. Hemp insulation has a
higher 'specific heat capacity' (i.e., the amount of heat needed to raise the temperature of the
material) than synthetic insulation and is therefore better at preventing overheating in the
summer and retaining heat in the winter. Moreover, the manufacturing of synthetic and mineral
insulation is energy intensive, emitting between 100kg and 1,000kg of CO2 per cubic meter,
compared to only 40kg of CO2 per cubic meter of hemp.43
A UK market for hemp-based building and insulation materials represents one of the most important
growth areas for the UK hemp industry. According to current forecasts, based on 220,000 hectares of
cultivation, by 2027 the UK’s hemp shiv market could be worth £240m, representing a value of £1,055
per hectare of revenue for farmers.44 As of 2020, hemp insulation accounted for less than 0.5% of the
total 3.3m tons of insulation used every year in the EU.45 With the global thermal market for insulation
expected to reach £31.67b by 2025,46 there is significant commercial potential for UK producers to take
advantage of this market opportunity.
The examples of hemp in the UK construction industry keep multiplying

and gaining in efficiency. A three-story building at Bath University was
constructed using a hemp-lime envelope and was so effective that its
administrators switched off all heating, cooling, and humidity control for
over a year, maintaining steadier conditions than in their traditionally
equipped stores, reducing emissions while saving a huge amount of
energy. After more than 30 years of hempcrete construction in UK, which
leads the rest of the world in this innovative construction method,
thousands of newbuild hempcrete homes have been added to the
housing stock. However, there is still work to do to upscale and
mainstream this novel construction material which is still unfamiliar to
much of the construction industry.
With the correct infrastructure installed and the forecasted ramp up of hemp grown over the course of
the next five years, the UK could produce enough shiv to support the production of over 61.1% of the
current annual volume of houses being added to the national stock. Furthermore, each house built using
hempcrete would sequester 13.1 tons of CO2, resulting in an additional £20.3m worth of carbon credits.
The chart below illustrates the number of houses that could be built using hemp shiv compared to the
forecasted housing completion numbers in the UK.
38 Department for Business, Energy, & Industrial Strategy

39 2020 global status report for buildings and construction
40 Department for Business, Energy, & Industrial Strategy
41 Monahan, J., & Powell, J. C. (2011). An embodied carbon and energy analysis of modern methods of construction in
housing: A case study using a lifecycle assessment framework. Energy and Buildings, 43(1), 179-188
42 Internal Calculations based on 1,500 ft2 house, 300mm thick walls and 307.26 kg CO sequestered per m3
2
43 Hemp Flax International Limited
44 Internal Modelling – APPG Plan Model
45 Hemp Flax International Limited
46 Grand View Research, Building Thermal Insulation Market Size Worth £31.7b By 2025
36
1,500 ft2 houses production using 100% of
the UK shiv capacity vs current completions
250,000
195,075
191,393
187,780
184,236
180,759
177,347
200,000
Number of Houses
119,230
150,000
71,757
100,000
37,513
18,877
50,000
6,932
2,542
-
2022E 2023E 2024E 2025E 2026E 2027E
Equivalent 1,500ft2 house (kg) No. of UK Building Completions
The estimates are based on the assumption that the average size of a detached house is 1,500 sq. ft.
and requires 6,329kg of hemp shiv to build (equivalent of 465 x 30lbs bales).
Beyond the value of the raw materials, processing of hemp biomass and manufacturing of building
materials would create high-skilled jobs in rural areas. Typically, based on current technology, hemp
processing plants are capable of processing between four and 12 tons per hour. A 12-ton processing
plant would provide direct employment for 54 operational staff and in-direct employment of 25
administrative staff. Based on projected demand for 16 processing facilities by 2027 and including in-
direct sales and administrative staff, the sector would add 1,264 jobs to the UK economy.47 With the
addition to agricultural, ancillary and secondary processing jobs (estimate of 720), the employment
opportunities would extend to several thousand.
47 Internal Modelling – APPG Plan Model
37
7.3.4 Paper
With investment in processing capability, hemp shiv could also be used as a sustainable and cost-
effective alternative to wood pulp. Paper produced from hemp is easier to manufacture because hemp
shiv is a softer but more robust than wood pulp. Because hemp matures in 16 weeks, compared to 20
years for an average tree, over a 20-year period, one acre of hemp can produce as much paper as 4-
10 acres of trees.
According to research undertaken by the Massachusetts Institute of

Technology (MIT), the Chinese were the first global civilisation to
produce paper. Dating to 150 BC, the paper was made entirely from the
pulp of hemp fibres. In subsequent centuries the material was widely
adopted around the world and created significant pockets of industry.
For instance, the town of Hemel Hempstead in Hertfordshire derives its
name from hemp because by the 1700s it was a major hemp processing
hub with four paper mills. The hemp paper industry thrived until the 19th
century, when it was replaced with wood pulp, which at that time was a
cheaper raw material.
Sitka spruce, a common tree variety used in the manufacturing of paper, contains about 30% cellulose
and requires bleaching with toxic chemicals before it can be manufactured into paper. By contrast,
hemp contains 65-85% cellulose and requires no bleaching. Additionally, hemp can be recycled 7-8
times, compared to 3-5 times for paper made from pulp.
Hemp shiv can be used as source material for a full range of paper products, from fine stationery to
cardboard boxes and moulded packaging. Hemp paper is more durable than wood paper and can be
coated (using China clay) to keep opacity, whiteness, smoothness and print qualities. At present,
common uses for hemp paper are:48
• Cigarette paper. This segment is dominated by a plethora of Chinese companies producing

hemp cigarette rolling paper with a strong export market. Quintessentially Tips (UK) specialises
in cigarette papers made out of hemp.
• Artisan paper. Hussein Papers (Rajasthan) and Eco Industries (Gujarat) produce handmade
hemp paper for calligraphy, painting and craft.
• Cardboard packaging. Sana Packaging (Colorado), Hemp Press (Oregon) and Owyhee
Produce (Oregon) are leading the hemp moulded packaging sector in the US. On the pulp-
board side of the sector, Canada’s Hammond Paper Group is a leader in the production of
paperboard and clipboards, and Hemp Flax Group, operating in Germany, the Netherlands
and Romania, manufactures a wide range of boards and paper products.
The bulk of hemp paper production is concentrated in China, with additional manufacturing hubs in
Germany, the Netherlands and the UK. North American paper companies, including the multi-national
operator Raw and San Diego-based Green Field Paper Company are fast establishing themselves in
this sector. The market for hemp paper is expected to be worth £21.1m by 2023 and is predicted to
grow at a rate of 5.3% per annum.49
48 Hemfoundation.net Report (13th July 2020); Hemp Wire Article 11th October 2019 and ecofriendlypackagin.com.au.
49 Global Hemp Fiber Market Growth 2020-2025
38
7.4.5 Textiles
A growing recognition of the negative environmental impact of the garments industry and the need to
move away from ‘fast fashion’ has reignited interest in hemp as a sustainable alternative to commonly
used raw materials for textile production.
Compared to cotton and other fibre crops used in the production of textiles, hemp is higher-yielding and
has a lower overall ecological footprint. One acre of hemp generally produces around 1,500 pounds of
fibre. This figure represents approximately three times the amount of cotton that can be grown in the
same space.50 Farmers can also grow hemp on the same land for several consecutive years without
depleting the soil or reducing yield. Finally, hemp requires 2,721 litres of water per kg of fibre produced
– less than one third of the 9,758 litres required for cotton.51
Being ten times more absorbent than cotton, hemp’s hollow structure is excellent at drawing away
moisture from the body. It is also antibacterial and naturally hypoallergenic and resistant to mildew and
bedbugs, keeping clothing and homewares such as bed sheets fresh, clean and hygienic.52
One cotton shirt uses 2,700 litres of water throughout the growing and
manufacturing process. Cotton production uses 18% of the world's
pesticides and yet 400,000 tons of cheaply made, fast fashion garments
are thrown into UK landfill each year. One hemp shirt consisting of 300g
of dried fibre uses only 500 litres of water and needs no pesticides. It
softens with every wash and its hollow fibres mean it breathes well in
summer and insulates in winter.53
Currently there is no domestic production of hemp textiles in the UK. This is partly due to the fact that
the industry is in its infancy and partly to a shortage of UK textile processing capacity, much of which
has moved offshore in the previous decades. While hemp is unlikely to become a source of mass-
produced garments in the UK, it is a sustainable alternative to cotton and could become a viable option
for the premium segment of the ‘Made in Britain' clothing industry.
50 Hemp vs. Cotton: Is This the Future of Clothing?

51 European Industrial Hemp Association
52 Harrison Spinks
53 Ecological Footprint and Water Analysis of Cotton, Hemp and Polyester
39
7.4.6 Non-woven products
Hemp can also be used in the non-woven industry, alone or in combination with other fibres. The non-
woven sector encompasses many different consumer markets, from hygiene products to medical
devices (i.e., wound dressings, surgical clothing, bandages, etc.). The current need for greening of the
raw materials used in the manufacturing industry makes hemp one of the best candidates for this
transition. While existing machinery used to produce non-woven products can already support hemp
with a few adjustments, the volumes of raw materials needed for this industry would require a significant
scale up of cultivation and a coordination with the operators along the full value chain.
7.4.7 Composites
Hemp can be used also as reinforcement in composites. It has been particularly appreciated in the
automotive industry, where it has already been used for decades to diminish weight while ensuring high
resistance. A further expansion of such applications in the transportation industry would result in higher
energy efficiency and a significant reduction in emissions.
40
7.4.8 Innovative uses of hemp waste
Recent technological innovations have created new commercial uses for hemp biomass leftover from
traditional processing – generally referred to as ‘dust’ – which would otherwise be discarded as waste.
Three product categories offer particularly attractive market potential:
• Biochar. Using a process called pyrolysis, hemp biomass is heated to produce a porous
material that is rich in nutrients and can be added to soil to increase its biodiversity and lock-in
carbon sequestered from the atmosphere. A study conducted by Cornell University found that
1.8b metric tons of carbon could be offset through the production of biochar.54 According to one
estimate, by 2025 the global market for biochar is expected to reach £2.68b.55 Given that
biochar yield equates to approximately 24.9% of input material, based on expected cultivation
of 220,000 hectares of hemp by 2027, and using the conservative current market rate of £500
per ton of hemp biomass, by 2027 the UK hemp biochar market could be worth over £47m.56
Based on currently-available technology, by 2027 approximately 15-20 primary processing
facilities would be able to process the entire domestic production of biochar. With 10 direct and
in-direct jobs required to operate a pyrolysis facility, the sector could create 210 new specialist
jobs in rural areas across the UK.
Investment in pyrolysis processing technology could also generate additional revenue from
energy production. Per tonne of dry hemp input material, pyrolysis produces approximately
4.55 megawatts of heat, 2.3 megawatts of cold energy and 0.4 megawatts of electricity, all of
which can be sold back into the national power grid.57 This technology has already been
successfully deployed in Oslo, where a pyrolysis factory produces 300 tons of biochar per year,
which represents the removal of approximately 700 cars from the road. The excess heat is sold
to the power grid at additional profit.58 As an additional revenue stream, carbon credits
generated through processing over 377,000 tons of hemp dust into biochar could amount to
£10.8m in 2027.59
• Pellets. Hemp dust can be processed into pellets used as fuel in CHP biomass boilers. The
current UK market price for hemp-based pellets is £60 per ton, compared to £80 per ton for
woodchip.60 The price differential is largely due to the fact that there is minimal processing
capacity for hemp pellets currently available in the UK, with no economies of scale. However,
as with biochar, there is a significant ecological incentive to invest in pellet proceeding
infrastructure. 9.1m of the 9.4m tons of woodchip sold in the UK every year is being imported
from abroad, unnecessarily incurring additional greenhouse gas emissions.61 If hemp pellets
from domestically grown and processed hemp replaced 100% of the imported woodchip, based
on current volumes of woodchips, the sector would add £1.3b to the UK economy.62
• Batteries. One of the largest potential growth areas for hemp waste is in the production of
batteries. Research conducted by Dr David Mitlin at Clarkson University in New York shows
that hemp-based batteries were nearly 200% more efficient and have a greater MW hour
density compared to traditional lithium-ion batteries. Hemp batteries are produced by heating
the hemp bast/fibre, currently treated as farming waste, at extremely high temperatures to
produce graphene nanosheets, which are then used in the manufacturing of supercapacitors.
Whilst the technology requires further R&D before it can be commercialised, investment in this
technology could lead to an extremely lucrative future industry.
54 Nature Communications, Charcoal takes some heat off global warming

55 Zion Market Research
56 Industry Estimations - APPG Plan Model
57 Unyte Hemp Pyrolysis Trial
58 Euronews.green
60 Industry Consultations – Jamie Bartley Unyte Limited
61 Forest Research
62 Forest Research
41
Hemp offers a low-cost and low-carbon alternative to a range of raw materials currently used in
industrial manufacturing. As the industry is still in its infancy, the UK has the opportunity to apply lessons
learned and avoid the turbulence experienced in other markets. The US in particular offers valuable
lessons about the growth of the hemp industry. The 2018 Farm Bill legalised hemp and initial interest
in the crop saw the area grown under hemp exceed 240,000 hectares in 2019.63 However, the US
market experienced extreme turbulence, driven by a lack of an established market and producers’
reliance on demand for CBD. As the market became saturated, many farmers were forced to abandon
the industry.
Alongside business-friendly regulations, investment in diversifications, innovative processing and

creating a domestic market will be key to the UK becoming a global leader in the manufacture of hemp-
based products.
63 Hemp Industry Daily; 2020 US Hemp Harvest Outlook
42
7.4.9 Animal feed
The pressing of hemp seed for oil generates hemp seedcake as a co-product. Hemp seedcake is rich
in protein and dietary fibre and used as animal feed. The addition of hemp protein to animal feed has
shown a decrease in inflammatory events in cattle, improvement in milk yields, and an increase in the
levels of Omega-3 fats in farmed chicken. For bovine animals, a high-protein diet has an added
ecological benefit, as there is emerging evidence that it reduces flatulence in cows, in turn decreasing
their methane emissions. Methane is a major contributor to climate change, estimated to be 80 times
more potent than carbon dioxide.64
There are also early indications that other parts of the cannabis plant that are usually discarded as
waste – including the leaves and trimmings – could improve the health of other farmed animals.
According to results of a 2015 animal study, incorporating hemp seeds and hemp seed oil to hens’ diet
led to eggs with increased levels of Omega-3 fatty acids in the yolks and a healthier Omega-3 to
Omega-6 ratio.65 Another study from 2020 calculated that the addition of as little as 157g of hemp
protein per kg of animal feed to the diet of dairy cows resulted in increased milk yield.66
Early findings from a pioneering study currently being conducted by Chang Mai University in Thailand
show the potential benefits of introducing cannabis into the feed of chickens.67 According to
researchers, there are indications that introducing some cannabinoid-rich parts of the plant into the
birds’ diet reduced the number of cases linked to avian bronchitis, which, in turn, could decrease the
need for antibiotics in poultry farming. Secondly, the researchers found that chickens who had been fed
a diet inclusive of cannabis achieved superior body mass, with increased levels of protein, fat and
moisture in the meat.
Whilst more research is required to fully understand the potential benefits of hemp-rich diets on farmed
animals, there are clear indications that many previously underused parts of the plant could find new
commercial uses, opening potential future revenue streams for farmers. Hemp is regarded to be among
the most nutritious sources of protein, but its wide adoption is currently being hampered by high cost
due to low volumes of production.68 With demand for alternative feed protein growing at 14% per year,
market conditions are ripe for scaling up hemp production.
64 US National Oceanic and Atmospheric Administration

65 Hindawi
66 Academic Journals
67 Chompunut Lumsangkul, Assistant Professor Chiang Mai University
68 Yahoo Finance
43
7.4.10 Carbon credits
Hemp has proven to be highly effective in carbon sequestration, one of the most important human
interventions in the global effort to slow down climate change. This is a double win for farmers: in
addition to selling the biomass, they can also monetise hemp’s negative carbon footprint via carbon
credits, which can be traded in international markets.
According to the Department for Environment, Food and Rural Affairs (DEFRA), the UK farming industry
emits 46.3m tons69 of greenhouse gas emissions on an annual basis, equating to 5.0 tons per hectare
based on a total farmed area of 9.2m hectares.70 If the UK government is to reach its stated target of
decarbonising all sectors of the UK economy and reaching ‘Net Zero’ by 2050, it will need to significantly
diversify its current strategies. Hemp production is a high-impact, low-cost intervention that can achieve
that target.
On an annual basis, hemp sequesters between 8 and 15 tons of CO2 per hectare of harvested (above
the ground) biomass.71 By comparison, a hectare of 20-year-old woodland captures 2 to 6 tons per
annum. With an average grow and harvest cycle of 120 days,72 over a 20-year period hemp can capture
5 times more CO2 than a forest. If manufactured into construction products or other long-lasting
applications (such as panels for the automotive industry and other composites) the carbon is stored for
longer periods, while a substitution effect can be accounted every time hemp is used as an alternative
to extraction and synthetic materials.
69 Department for Environment Food & Rural Affairs, Agri-climate report 2021
70 Department for Environment Food & Rural Affairs, Agricultural Facts March 2021
71 Centre for Natural Material Innovation, Darshil Shah
72 Government of Alberta – Agriculture and Forestry
44
7.5 Conclusion
Globally, the hemp market is expected to reach £5.1b in 2020 and thereafter grow at a compound
growth rate of 36.1% until 2030, when the market is forecast to be worth £110.2b.73 However, the true
added value of industrial hemp is that the same crop can be harvested and used for a wide array of
different purposes. Moreover, used in crop rotation, it has the potential to achieve positive
environmental externalities.
7.5.1 Agriculture – raw materials
Hemp raw materials wholesale value
£400,000
£350,000
Wholesale Value (£000s)
£300,000
£250,000
£200,000
£150,000
£100,000
£50,000
£0
2022 2023E 2024E 2025E 2026E 2027E
Hemp Flower Value (£000s)

Hemp Fibre Value (£000s)
Hemp Shives Value (£000s)
Hemp Oil Value (£000s)
Hemp Protein Powder Value (£000s)
Hemp Dehulled Seed Value (£000s)
73 Reportlinker - Industrial Hemp Market
45
7.5.2 Industrial manufacturing – processed materials
The versatile nature of this plant potentially represents multi-billion-pound downstream markets,
particularly in the manufacturing of reusable, recyclable and compostable biomaterials. Therefore,
hemp is capable of substantially contributing to the decarbonisation of essential products for a future-
proof and thriving sustainable economy.
1,500 ft2 houses production using 100% of

the UK shiv capacity vs. current completions
250,000
195,075
191,393
187,780
184,236
180,759
177,347
200,000
Number of Houses
119,230
150,000
71,757
100,000
37,513
18,877
50,000
6,932
2,542
-
2022E 2023E 2024E 2025E 2026E 2027E
Equivalent 1,500ft2 house (kg) No. of UK Building Completions
Hemp share of UK insulation market (£000s)
£80,201
2022E
£962,407
£164,400
2023E
£986,397
£252,746
2024E
£1,010,986
£345,396
2025E
£1,036,187
£442,507
2026E
£1,062,017
£544,245
2027E
£1,088,491
46
7.5.3 Animal feed
The UK hemp feed industry is still nascent, with only a handful of suppliers selling small tonnages (<10
tons) per month to local livestock farmers.74 These producers currently face stiff competition from
suppliers of animal feed made using soy protein, which costs 25% less at £300 per tonne compared to
£400 for hemp.75 However, soy bean has 12.4%, while hemp seed is around 33% protein, and the
protein in hemp seeds is made up of two types of proteins, edestin (60–80%) and 2S albumin, both of
which are highly digestible globular and therefore offer superior nutritional value to farmers.76
Additionally, when assessed against its ecological impact, domestically-supplied hemp has a vastly
smaller footprint than soy protein, the majority (71%) of which is currently imported from South
America.77 With increased volume of hemp production and the ability to recoup some of the costs with
carbon credits, there is scope for hemp becoming a highly competitive and sustainable source of animal
feed. With backing from the National Farmers Union (NFU) that there is a huge potential market for
protein crops, hemp is well placed as a candidate.78
UK animal feed market size traditional vs. hemp
£7,659,361
£7,374,208
£9,000,000
£7,099,672
£6,835,357
£6,580,881
£6,335,880
£8,000,000
£7,000,000
Market Size (£000s)
£6,000,000
£5,000,000
£4,000,000
£3,000,000
£765,936
£626,808
£2,000,000
£496,977
£375,945
£263,235
£158,397
£1,000,000
£0
2022E 2023E 2024E 2025E 2026E 2027E
Total UK Hemp Feed Market (£000s)) UK Animal Fodder Production (£000s)
74 Internal Market Research/Discussions with industry experts

75 Internal Market Research/Discussions with industry experts
76 Hemp seed cake increases fatty acids but does not transfer cannabinoids in eggs and tissues of laying hens,
Rajasekhar Kasula, Fausto Solis, Byron Shaffer, Frank Connett, Chris Barrett, Rodney Cocker and Eric Willinghan
77 UK Roundtable on Sustainable Soya: Annual progress report, 2019
78 National Farmers Union
47
7.5.4 Carbon credits
Based on an expected increase of 220,000 hectares of hemp cultivation in the UK over the next five
years, UK farmers could generate in excess of £1.2b in carbon credits from cultivating hemp. This would
open up a new revenue stream currently unavailable to farmers, diminishing the need for subsidies to
maintain the economic viability of farming. They would also act as a direct replacement of the single
farm payment that, post the UK's departure from the EU, is experiencing a tapering to £nil per acre over
the next 5 years.
Total carbon credit value - CO2 (£000s)
9,000,000 1,400,000
£1,254,300
8,000,000
Total Carbon Credit Value (£000s)

1,200,000
Total Hemp Area (Ha)
7,000,000
1,000,000
6,000,000
5,000,000 800,000
4,000,000 £602,300
600,000
3,000,000
400,000
2,000,000 £274,300
£120,900 200,000
1,000,000
£39,100
- -
2023E 2024E 2025E 2026E 2027E
Total CO2 Sequestered (Tns)

Total Hemp Area (Ha)
Total Carbon Credit Value - CO2 (£000s)
48
7.6 Recommendations
The following improvements in the licencing regime would enable farmers to take advantage of market
opportunities in the hemp industry:
1. Move hemp licencing from Home Office to DEFRA. To put the UK on a competitive footing
with other hemp-producing countries, the licencing of industrial hemp cultivation should be
moved to DEFRA, whose staff have agricultural expertise and are better qualified than those in
the Home Office to assess applications for hemp cultivation.
The licencing regime should be embedded within the UK’s new Border Biosecurity Protocols,
which went live on 1 July 2022, and will be extended to include other Products of Plant Origin,
including hemp, in July 2023. This will add another degree of quality control at the border and
will prevent rogue operators from undermining the fledgling domestic market with price dumping
activities or using illegal biomass.
2. Simplify the licencing process. Surveys show that the licencing process is the single most
important reason why farmers are reluctant to cultivate hemp. Applications must be made
during a narrow window between January and April and the online application system has been
widely criticised as slow and not user-friendly. Removing the time constraints and streamlining
the application process will introduce efficiency and encourage more farmers to apply for
licences.
Additionally, currently the Home Office has large discretionary powers to restrict the locations
of where farmers can grow hemp, which is largely dictated by security considerations. With the
process being administered by DEFRA, in addition to security, the suitability of specified fields
should be assessed on the basis of agricultural and environmental considerations.
3. Expand UK National List of seed varieties and streamline the registration process.
Currently, the hemp cultivation licence only allows the cultivation of hemp varieties that appear
on an EU approved list and three varieties that are registered in the UK’s National Lists of
Varieties maintained by the Animal and Plant Health Agency (APHA), all of which have less
than 0.2% THC. To gain competitive advantage over the rest of the EU, the UK should include
the EU varieties in the National List, expedite the registration of new varieties, and support
research in genetic improvement and agronomy to expand the list.
The registration of hemp seed varieties via APHA’s Variety Tracking System (VTS) provides
traceability and validation of any new varieties of seeds being added to the National List. The
process should be streamlined and expedited. The National List should include hemp varieties
with up to 0.3% THC, which will give UK farmers access to ca. 500 additional seed varieties
beyond those currently included on the EU list.
There are currently 81 EU certified seed varieties available for famers to
choose from, however none are ideal for the UK climate. The UK could
leverage its domestic R&D capability – such as the National Plant
Phenomics Centre (NPPC) at Aberystwyth University – to develop high
yielding and pest-resistant genetics that are uniquely suited for the UK
climate.
To avoid the use of illegal and non-registered hemp varieties, DEFRA should conduct
administrative checks on all hemp growers. Controls should be based on the verification of the
official labels, proof of purchase, seed type and geospatial data to inform and generate
evidence for future potential changes. Physical controls should be limited and performed
randomly for audit purposes. This could be integrated into a streamlined licensing portal,
49
allowing farmers to upload the relevant information as evidence, at suitable times in the
cultivation season.
4. Remove requirement on farmers to destroy field hemp if it exceeds the pre-validated

level of 0.3% THC. Hot temperatures and drought conditions can naturally increase THC
concentration in all hemp varieties. At present, if a hemp crop tests over the allowed legal dry-
weight limit of 0.2%, then the crop has to be destroyed. In effect, farmers are penalised for
natural fluctuations in the plants’ chemical content which – at such trace amounts of
psychoactive compounds – represent no public safety risk. By removing requirement on
farmers to destroy the crop if the THC limit exceeds 0.3% (based on the limit in validated
seeds), the UK will give farmers reassurance that they would not have to risk significant
commercial losses due to weather events beyond their control.
5. Commission a review to determine a suitable limit of controlled cannabinoids in field

hemp. The trend globally is to recognise the variations in the amounts of controlled
cannabinoids in field hemp and to set the threshold at a more practical level. The World Health
Organization (WHO) Expert Committee on Drug Dependence identified and acknowledge 1%
as a safe threshold for field-grown hemp.79 Several countries have already adopted this
recommendation. Switzerland introduced the 1% limit as far back as 201180 and Australia
followed suit in 2018.81 In 2017 Italy raised the limit to 0.6%82 while in January 2022 a new law
came into effect in the Czech Republic, allowing 1% THC in field hemp.83 In order to stay
competitive, DEFRA should commission an independent review, in consultation with key
industry representative bodies, to determine a suitable limit of THC in field hemp.
6. Enable farmers to process the leaves and flowers. The UK Hemp Licence prohibits farmers
from harvesting the leaves and flowers which, although almost free from THC, must be
destroyed. Aside from being wasteful, this prevents farmers from extracting CBD and using the
leaves and flowers for horse bedding, bio composites, mulch or compost. Based on data from
2021, by harvesting the flowers for CBD extraction, farmers could increase their income from
£6,000-9000 per hectare to £20,000.84
Currently, the Hemp Licence does not allow farmers to process the hemp on their farm, if the
processing activity results in the creation of even minimal amounts of controlled drugs, unless
they hold a Controlled Drugs Licence. This represents a significant loss of potential income for
those farmers who are not able to invest in processing capability and the security infrastructure
that is required to secure a Controlled Drugs Licence.
The requirement for a Controlled Drugs Licence to process hemp is excessive. DEFRA should
engage with the industry and devise a framework which would allow farmers or third-party
manufacturers to lawfully process hemp flowers and leaves to produce full-plant extracts,
without needing to meet the onerous requirements of a Controlled Drugs Licence and
associated pharmaceutical-level controls.
The UK Secretary of State should commission a review of the current Home Office Guidance
on hemp licencing with a view to making suitable amendments to restrictions on the use of the
controlled parts of the plant. The licencing regime should have conditions that are proportionate
to the nature of the activity, including cultivation to processing, and the intended use of the end
product.
79 World Health Organisation Critical Review

80 Hemp Today
81 Parliament of Western Australia
82 Parliament of Western Australia
83 https://magazin-konopi.cz/piratum-se-podarilo-prosadit-zvyseni-limitu-thc-na-1-procento/
84 Steve Barron, Margent Farms
50
7.7 Actions
No. Department Actions
1. 1. Drugs and Firearms 2. Transfer hemp licencing from Home Office’s DFLU to
Licencing Unit DEFRA.
2. Animal & Plant Health
Agency
2. 1. Animal & Plant Health 2. Simplify Licencing Process:

Agency
f) Allow farmers to apply for hemp cultivation licence
year-round.
g) Improve the user interface of the online application
portal.
h) Speed up the application process.
i) Dispense with the requirement for DBS checks for
hemp cultivation licences.
j) Field selection should be based on agricultural and
environmental considerations, not only security.
3. 1. Animal & Plant Health 3. Expand the national list of registered seed varieties to
Agency include registered EU hemp varieties and allow for
2. External Research Partners registration of hemp varieties with up to 0.3% THC.
4. Establish partnerships with UK plant genetics research
centres to develop hemp varieties suited for UK climate
with accelerated approval and validation timelines.
4. 1. Animal & Plant Health 2. Amend hemp licence conditions requiring farmers to
Agency destroy hemp in field if the biomass exceeds 0.3%
THC.
5. 1. Animal & Plant Health 2. Commission a review of suitable THC limit in consumer
Agency products manufactured from hemp.
2. Advisory Committee on the
Microbiological Safety of
Food
6. 1. Drugs and Firearms 4. Amend Home Office guidelines to remove restrictions

Licencing Unit on the use of the controlled parts of the plant under
2. Advisory Council on the certain conditions.
Misuse of Drugs 5. Remove the licence condition requiring the flowers and
3. Animal & Plant Health leaves to be destroyed.
Agency 6. Define specific end uses e.g., tea/ oils etc to allow
production of food products from hemp flowers, leaves
& seeds.
51
7.8 Timeline
No. Actions Start of Discussions
1. 1) Transfer hemp licencing from Home Office’s DFLU to DEFRA. 1 November 2022
2. 1. Simplify licencing process: 1 November 2022
a) Allow farmers to apply for hemp cultivation licence year-

round.
b) Improve the user interface of the online application portal.
c) Speed up the application process.
d) Dispense with the requirement for DBS checks for hemp
cultivation licences.
e) Ensure field selection is based on agricultural and
environmental considerations, not only security.
3. 1. Expand the national list of registered seed varieties to include 1 November 2022
registered EU hemp varieties and allow for registration of
hemp varieties with up to 0.3% THC.
2. Establish partnerships with UK plant genetics research
centres to develop hemp varieties suited for UK climate with
accelerated approval and validation timelines.
4. 1. Amend Hemp Licence conditions requiring farmers to destroy 1 November 2022

hemp in field if the biomass exceeds 0.3% THC.
5. 1. Commission a review of suitable THC limit in consumer 1 November 2022

products manufactured from hemp.
6. 1. Amend Home Office guidelines to remove restrictions on the 1 February 2023

use of the controlled parts of the plant under certain
conditions.
2. Remove the licence condition requiring the flowers and leaves
to be destroyed.
3. Define specific end uses e.g., tea/ oils etc to allow production
of food products from hemp flowers, leaves & seeds.
52
8.0
Ingestible and topical products
53
8.1 Ingestible and topical products

(£000s) (£000s)
Topicals Office for Product Safety & £23,950 £4,790

Standards / Trading
Standards
38,900
Ingestibles Food Standards Agency, £1,996,580 £399,320
Veterinary Medicines
Directorate / Trading
Standards
54
8.2 Background
Hemp is used to manufacture two types of consumer products:
• Hemp oil and protein. Hemp oil and hemp protein are obtained from cold pressed seeds that
contain traces of cannabinoids. Hemp oil and protein generally contain trace amounts of CBD
and CBDa – which have been safely consumed for generations – alongside a mix of high-
quality protein, fats and other nutrients.
• Hemp extracts. CBD oil and other extracts are obtained from the flowers, leaves and stalks,
commonly using solvent or CO2 extraction methods.
The popularity of non-intoxicating CBD products is driving interest in cannabis and helping remove
much of the stigma still attached to the plant. The UK market for CBD products, second only to the US,
is the most developed in Europe and according to CBD Intel, an independent source, the UK market is
£300m in 2021 and will rise to £1b in 2026, equating to a CAGR of 27.2%.85 It is thought that CBD
usage ranges between 8% and 11% of the adult population (19+), which would put the number of UK
consumers at between 4.3 and 5.9m.
85 CBD Intel Market Size Report: The UK CBD Market
55
8.3 Analysis
8.3.1 Nutritious food
Hemp has been a traditional food source in Europe for thousands of years. All parts of the plant except
stems have been consumed. While the flowers and leaves are rich in precious phytochemicals
(cannabinoids, terpenes and polyphenols), seeds are particularly rich in high-quality proteins and have
a unique essential fatty acid spectrum. Hemp seeds contain high levels of protein and considerable
amounts of dietary fibre, vitamins, Omega-3 fats and minerals. De-hulled hemp seeds can be eaten
raw and are used to make nutritious protein powders and functional oil for human consumption, while
whole hemp seeds are used as feed for animals.
Hemp can be consumed as raw or dehulled seeds, seed flour or meal, seed oil, extracts from leaves
and flowers. Hemp contains a relatively high level of cannabinoids, of these the most well-known and
naturally abundant is cannabidiol or CBD, along other compounds such as terpenes, phenols,
flavonoids and other cannabinoids uniquely working together to contribute to a varied diet. Fresh leaves
of hemp can be eaten raw as salad, or cooked, juiced, powdered and blended into smoothies. The
leaves are a rich source of fibres, polyphenols, flavonoids, nine essential amino acids (including lysine
and arginine), essential oils, as well as the minerals magnesium, calcium, and phosphorous.
Historically, hemp has been used in food preparations in much higher

concentrations than today. As a matter of fact, varieties used in the past
had a cannabinoid content well above the current levels. Therefore, the
quantity of cannabinoids that were present in the human diet was much
more significant than what is authorised nowadays. Flowers, leaves and
other parts were cooked with fat, oil, water and wine, often in
combinations, which are, in chemical terms, simple extraction processes
similar to those of today.
Technically a nut, hemp seed typically contains over 30% oil and about 25% protein, with considerable
amounts of dietary fibre, vitamins and minerals. Hemp seed oil is over 80% in polyunsaturated fatty
acids (PUFAs) and is an exceptionally rich source of the two essential fatty acids (EFAs) linoleic acid
(18:2 omega-6) and alpha-linolenic acid (18:3n3 omega-3). The omega-6 to omega-3 ratio (n6/n3) in
hemp seed oil is normally between 2:1 and 3:1, which is considered to be optimal for human health. In
addition, the biological metabolites of the two EFAs, gamma-linolenic acid (18:3n6 omega-6; ‘GLA’) and
stearidonic acid (18:4 omega-3; ‘SDA’), are also present in hemp seed oil.
The two main proteins in hemp seed are edestin and albumin. Both of these high-quality storage
proteins are easily digested and contain nutritionally significant amounts of all essential amino acids. In
addition, hemp seed has exceptionally high levels of the amino acid arginine.
With the global meat substitute market valued at £4.5b in 2020 and expected to grow to £9.1b, hemp
represents the perfect source of sustainable protein to be grown locally and organically.86
86 UK Government, Industrial Hemp licensing: factsheet
56
8.3.2 Wellness products
Matching high consumer demand for CBD products with domestic supply, offers an unprecedented
opportunity to grow a new consumer category that will become a staple in the years to come. At present,
99.9% of all CBD products purchased by UK consumers are imported from either Europe, the Americas,
or China.87 Due to legislative barriers, UK farmers and producers cannot currently tap into this lucrative
market and UK companies can only market products manufactured abroad, capturing a very small
segment of the value chain.
In January 2019 the European Food Safety Authority (EFSA) added hemp extracts and hemp-derived
products containing cannabinoids including CBD to a list known as Novel Foods. However, the process
of approving new products takes up to 5 years (with no guarantee of success) and no hemp CBD
products can be sold during the Novel Foods process. In January 2020 the UK left the EU, giving the
UK autonomy over its regulations. This presents an opportunity for the UK to streamline the process of
adding new CBD products to its list of approved products.
Additionally, the UK currently only allows CBD products to be marketed if the total content of controlled
cannabinoids does not exceed 1mg, or 0.0001% (combined) of Tetrahydrocannabinol (THC),
Tetrahydrocannabinol Acid (THC-a), Tetrahydrocannabivarin (THC-v) and Cannabinol (CBN)
combined. This effectively eliminates the possibility of marketing most whole-plant products, the
category most sought-after by consumers. These regulations need reviewing if the UK is to develop a
viable domestic CBD market.
87 Cambridge Network
57
8.3.3 Cosmetics and body care products
Beyond nutritional and medicinal properties, hemp extracts are also valued for their cosmetic properties.
CBD reduces inflammation and CBD-enriched balms are used to treat arthritis, stiff joints and pain.
CBD is also an antioxidant, and its topical use helps lessen the visible signs of ageing, irritation and
inflammation.88 As an on-trend ingredient, CBD is now widely available in a full range of products,
including creams, lotions, balms, oils, face masks, shampoos, and even bath bombs.
Cosmetic products containing cannabis derivates have been sold in Europe for decades. However, in
recent years, these products surged in popularity. Their use has evolved into a major skin care trend
with numerous products marketed as oils, balms, creams, lotions, and facial serums. The demand has
been driven by recognised and validated properties related to hemp seed oil and hemp extracts.
Cosmetic products containing CBD improve skin condition because of the compound’s antioxidant
properties and provide an excellent skin protection. Unfortunately, there is a lot of confusion over
cannabis derivatives relating to their quality and permitted contents, precisely because of a lack of
harmonious regulations. This situation risks discouraging many investors from further exploring hemp
applications for cosmetics, resulting in lack of R&D and considerable potential missed opportunities.
In February 2021 the EU’s Directorate-General for Internal Market, Industry, Entrepreneurship and
SMEs added CBD “derived from extract or tincture or resin of cannabis” as a legal cosmetic ingredient
to its CosIng89 guidelines. This revision to CosIng follows the landmark ruling by the Court of Justice of
the European Union (the CJEU) that CBD derived from the entire hemp plant is not a narcotic under
the UN Single Convention on Narcotic Drugs of 1961 and thus all parts of the plant can be processed,
and its derived products should be freely traded between EU member states.
Up until this revision to the CosIng guidelines, only synthetic CBD was expressly allowed as a cosmetic
ingredient in the EU’s database. The new regulation allows plant-derived CBD to show its potential
utility as an anti-sebum, antioxidant, skin conditioner and skin protectant. This regulatory progress
paves the way for future growth and diversification in the sector.
88 Antioxidative and Anti-Inflammatory Properties of Cannabidiol, Sinemyiz Atalay, Iwona Jarocka-Karpowicz, and
Elzbieta Skrzydlewska
89 CosIng is a database of cosmetic regulations that expressly provides for authorised and unlawful ingredients and sets forth
their particular purposes and functions.
58
8.3.4 Animal care products
In addition to the traditional product offering, the market for cannabinoid-based pet products offers
investors significant opportunity for growth. The pet products segment is one of the fastest growing
categories in the cannabis products space. Due to the increasing ‘humanisation’ trend, particularly
visible in the US market, CBD pet products are becoming an increasingly popular option. According to
the American Pet Products Association, in 2020 US pet owners spent £77.6b90 on pet supplies,
treatments and care. CBD pet products are already in wide use across the US and it is estimated that
by 2025, CBD-based pet products will account for between 3-5% of nationwide sales.91 Given the
current market size and growth rates, it is estimated that in 2025 the market for CBD pet products will
be worth between £97.6m and £162.6m. Currently, the most popular pet products are tinctures (69%)
and powders (11)%92, representing a market for each SKU of £114.5m and £18.3m respectively. This
represents a significant opportunity and upside to both manufactures and retailers who wish to
penetrate this space.
Until recently the CBD animal market has suffered from a lack of scientific evidence supporting
anecdotal positive indications. However, a recent study by Cornell University, in partnership with ElleVet
Sciences. has found that a dose of 2 mg/kg of CBD and CBDA delivered twice daily has helped increase
mobility, activity, and comfort in 80% of dogs participating in the trial.93 Substantial pre-clinical work is
also underway on a number of large animal species (bovine, equine, camel and porcine) at Aberystwyth
University.
More research needs to be done on the toxicity of THC for canines and there are currently no CBD
products authorised in the UK for veterinary use, however a veterinary surgeon may prescribe a legally
obtained human CBD product under the provisions of the prescribing cascade system.94 Administration
of an unauthorised product containing CBD without a veterinary prescription is an offence under
Regulation 8 of the Veterinary Medicines Regulations. Companies supplying CBD products for human
use in line with the requirements of the Medicines and Healthcare products Regulatory Agency (MHRA)
must not indicate or recommend their products for use on animals.
With more research and under close supervision of the Veterinary Medicines Directorate (VMD), the
pet care products market segment has the potential to become one of the largest segments of the
cannabis industry.
90 CBD Pet products market - growth, trends, covid-19 impact, and forecasts (2022 - 2027)
91 Nielsen IQ
92 Nielsen IQ
93 Pharmacokinetics, Safety, and Clinical Efficacy of Cannabidiol Treatment in Osteoarthritic Dogs
94 The cascade: prescribing unauthorised medicines
59
8.3.5 Consumer choice and protection
While more work needs to be done on educating consumers about cannabis-based products, emerging
data is painting a picture about consumer preferences. A 2021 survey by the cannabis Industry
Council,95 which garnered 849 responses, indicates that consumers have a clear preference for natural,
whole-plant products over synthetic, isolate-based products.
Do you know what CBD 1%

(Cannabidiol) is?
Yes
No
99%
Do you currently use 21%

CBD oil or capsules?
Yes
No
79%
Have you ever experienced 3%

negative side effects from CBD
products? Yes
No
97%
CBD is a popular nutritional 20%

supplement made from the Hemp
Yes
plant. After March 31, 2021, CBD No
will enter the food supply. Are
you comfortable with that? 80%
What type of CBD products do Full Spectrum (Natural Trace CBD)

7% 1%
Broad Spectrum (Cannabinoid Rich,
you prefer? 16% Reduced THC)
Isolated CBD (“Pure CBD, other
cannabinoids removed)
Synthetic CBD
76%
At the moment there is no

labelling requirement in place to 4%
state if a product contains natural
or synthetic CBD. We propose to Yes
the FSA and FSS that any product No
which contains synthetically 96%
produced cannabinoid CBD, and
not plant based, should state this.
Consistency in the communication of the different types of CBD products is key to ensuring that
consumers understand what they are buying, and producers are held to strict quality standards.
95 Cannabis Trade Association
60
8.4 Conclusion
With government interventions aimed at improving regulations and enabling domestic production of
CBD, the UK market in ingestible and topical CBD products could be worth £2.0b within 5 years.
Colorado & UK Ingestibles Forecasts
2,500,000
£1,962,365 £1,996,582
2,000,000 £1,928,735
Gross Sales (000s)
1,500,000
1,000,000
500,000
$203,891 $207,446 $211,063
0
2025E 2026E 2027E
Colorado Total Ingestibles ($000s) UK Total Ingestibles (£000s)
Various industry forecasts indicate that the global CBD skin and body care market will be worth more
than £2.4b96 by 2025.97
Colorado & UK Topicals Forecasts
30,000
25,000 £23,535 £23,946

£23,132
Gross Sales (000s)
20,000
15,000
10,000
5,000
$2,445 $2,488 $2,531
0
2025E 2026E 2027E
Colorado Total Topicals ($000s) UK Total Topicals Gross Sales (£000s)
97 Technavio / Allied Market Research / Market Reports World
61
8.5 Recommendations
1. Commission a review of the Novel Food Regulations and its application to hemp-based food
supplements. Today, the vast majority of CBD food supplements sold in the UK are imported. This
is due to current restrictions on hemp cultivation and the onerous Novel Food (NF) process, both
of which effectively preclude UK farmers from accessing this high-value-add consumer segment of
the CBD sector.
The NF process is costly, onerous and lengthy, which means that the route is accessible only to
large companies with sufficient scale and resources. It has proven to be a significant barrier to entry
for UK companies, resulting in the UK consumer CBD market currently being dominated by foreign
companies.
A review of available scientific evidence on the safety of hemp and derived foods is currently under
way. Once the findings are available, the FSA should review the future application of the NF process
and whether the process should relate to all products containing cannabinoids or whether any
products could be made exempt from the process. The Agency should consider the history of the
use of the whole cannabis plant as food in the UK and the significant consumer demand for whole-
plant products. It should also review alternative regulatory approaches, such as the dose-based
approach. One approach, already proposed by the EIHA, is as follows:
a. At high doses (175 mg/d), CBD-containing products are considered medicinal products and
should be regulated as medicines.
b. At low to medium doses, up to 70 mg/d, irrespective of delivery mechanism (capsules,

tinctures, etc.), CBD for oral intake should be regarded as a food supplement. This dual
approach is already applied for many products, such as valerian, essential oils, chondroitin
(sulphate), Ginkgo Biloba, silymarin, some vitamins and iron products.
c. Low CBD concentrations should be allowed in food products insofar as the recommended
daily dose that is far enough from exerting pharmaceutical effects, is not exceeded. This
would require the scientific determination of the minimum dose that a physiological effect
is delivered at as a ‘food’.
2. Establish commercially viable THC limit in consumer products. The FSA should introduce
commercially viable THC limits in legal cannabis-based products, as current UK regulated limits
are an outlier compared to the global commercial range. The current focus on permitting only CBD
isolate sales in the UK nullifies the potential economic benefits for a domestic UK industry, as
isolates are an oversupplied commodity dominated by US and Chinese manufacturers. Allowing
reasonable levels of THC in consumer products reflects the reality of the UK market, assuring
consumer safety whilst preserving consumer choice.
62
Commercial Range of % THC to CBD ratios based on THC:
regulated limits, NOAEL and LOAEL evidence
% THC to CBD Ratio

0.000% 2.000% 4.000% 6.000% 8.000% 10.000% 12.000% 14.000% 16.000%
12.00
14%
10.00 10.00 10.00
14%
8.00
Mg per day
10%
6.00
7.00
3%
4.00
3%
2.00 2.10 2.10
0.001%
- 0.07
UK Home Office America Jersey - Channel Switzerland Health Canada Health Canada
Islands 2001 NOAEL 2001 LOAEL
% THC to CBD Ratio THC - # of mg per day
A recommendation made by the Advisory Council on the Misuse of Drugs (ACMD) to adopt a
‘serving-based’ approach to controlled cannabinoids should be reviewed, with additional
consideration being given to a daily intake orientation utilising a robust and science-supported
daily dose.
Only D-9 THC should be included in the measurement of THC levels. If the acid form of THC,
THCA, is also designated a ‘controlled’ cannabinoid as ‘total THC’, this could, by default, make
hemp seed foods non-compliant as these naturally contain trace levels of the acid (and non-
intoxicating) form of this compound which cannot be fully removed as they are an integral part
of the plant.
3. Develop standardised testing protocols. A lack of agreed testing protocols for cannabis-based
products means that many products currently available on the market use vastly different testing
method to establish their potency and quality. The FSA needs to set clear definitions of different
product types, based on the variety and potency of active substances, and ensure robust
enforcement of labelling requirements. Based on the limit guidelines discussed above, the products
need to contain clear information about amount of active ingredients and recommended dosing
guidelines. The Ring Trial Proficiency report, undertaken by the testing company LGC and the
United Kingdom Accreditation Service (UKAS), has already proposed limits and parameters and
the FSA should require all CBD producers to adopt the required testing protocols in their
manufacturing processes.
4. Ensure enforcement of CoA and CoO requirements for food supplements. The FSA should
ensure that products containing non-trace amounts of cannabinoids should be sold with a
Certificate of Analysis (CoA), providing information about content of active ingredients and any
contaminants, and a Certificate of Origin (CoO), which ensures full traceability. The CoAs should
be issued by accredited laboratories using the FSA-approved testing protocols for cannabis-based
products.
63
5. Develop labelling guidelines. The FSA should establish clear definitions of different product
types, based on the variety and potency of active substances, and provide labelling guidelines.
Strict definitions and associated testing and labelling requirements must be developed for products
currently commonly referred to as follows:
Description Details
Botanical – Derived from the seed only with trace levels of controlled
Whole plant hemp extract
cannabinoids
Botanical – Derived from the leaf and flower with naturally occurring
Full spectrum
levels of controlled cannabinoids
Botanical – Derived from the leaf and flower with trace levels of
Broad spectrum
controlled cannabinoids
Botanical – Derived from the leaf and flower with one or two
Narrow spectrum
cannabinoids
Mono spectrum / Isolate Botanical – Derived from the leaf and flower purified single cannabinoid
Mono spectrum / Isolate Synthetic – Single cannabinoid
Any products made using synthetic ingredients must be clearly labelled. Consideration should be made
to compliance with EU and other international regulations, to not exclude UK producers from access to
international markets.
64
8.6 Actions
1. 1. Advisory Committee on Novel 1. Commission a review to provide clear definitions

Foods and Processes to differentiate between hemp food and
2. Independent Assessor supplements.
2. Consider future reform of the NF process
2. 1. Advisory Committee on the 1. Set commercially viable THC limits in legal

Microbiological Safety of Food cannabis-based products.
3. 1. Advisory Committee on the 1. Introduce and enforce a harmonised standard

Microbiological Safety of Food testing protocol for all cannabis-based products.
2. United Kingdom Accreditation
Service
4. 1. Advisory Committee on the 1. Make CoA, CoO and full traceability mandatory for
Microbiological Safety of Food all foods and food supplements.
2. United Kingdom Accreditation
Service
5. 1. Advisory Committee on Novel 1. Set clear product definitions based on content and
Foods and Processes potency and associated testing and labelling
2. Advisory Committee on the guidelines.
Microbiological Safety of Food 2. Set requirements to specify any synthetic
ingredients on product label.
65
8.7 Timeline
1. 1. Commission a review to provide clear definitions to 1 November 2022

differentiate between hemp food and supplements.
2. Consider future reform of the NF process
2. 1. Set commercially viable THC limits in legal cannabis-based 1 November 2022

products.
3. 1. Introduce and enforce a harmonised standard testing 1 November 2022

protocol for all cannabis-based products.
4. 1. Make CoA, CoO and full traceability mandatory for all foods 1 November 2022
and food supplements.
5. 1. Set clear product definitions based on content and potency 1 November 2022
and associated testing and labelling guidelines.
2. Set requirements to specify any synthetic ingredients on
product label.
66
9.0
Medicinal cannabis
67
9.1 Medicinal cannabis

(£000s) (£000s)
Medicinal Home Office / MHRA £3,300,590 £755,840 81,570
68
9.2 Background
The previous five years have seen a wave of legalisations of medicinal cannabis sweep across the
globe and the reform momentum continues, with more than 55 countries now having or considering
legal access programmes. Europe is on a trajectory to becoming the largest medicinal cannabis market
in the world, offering significant growth opportunities to companies capable of meeting the EU’s rigorous
regulatory and quality standards. The UK, already a leader in cannabis research and pharmaceutical
production, is in pole position to become a European powerhouse in the production of whole-plant and
extract-based medicines, subject to change in the Proceeds of Crime Act (POCA).
Beyond the economic potential of a home-grown pharmaceutical industry, medicinal cannabis could
play an important role in lowering the costs of provision of public healthcare in the UK. There is emerging
evidence that cannabis-based medicines can help reduce patients’ dependence on opioids and
benzodiazepines, as well as other prescribed medications. This is particularly relevant to the UK, which
has one of the fastest growing rates of opioid use in the world, with an estimated one in four adults
taking an addictive medication such as a strong opioid, zopiclone, gabapentinoid or benzodiazepine. In
many cases, these medicines are being prescribed “off label”, or outside of their original marketing
authorisation, as patients have often exhausted first line treatments.98
In the UK, polypharmacy has become the norm rather than the exception and – aside from being
associated with a wide range of negative health outcomes – is placing a huge financial burden on the
NHS. By ignoring medicinal cannabis as part of a wider pharmacopeia, the UK is potentially missing an
opportunity to provide patients with safer and more effective medications than some of those currently
on offer, and to explore potential cost savings for our cash-strapped NHS.
"The government needs to work urgently with the industry bodies in order
to capitalise on this opportunity to create a profitable industry, create new
jobs, create a significant tax income stream and most importantly give
hundreds of thousands of people access to a medicine that may change
their lives." Prof. Mike Barnes
98 Dependence and withdrawal associated with some prescribed medicines
69
9.3 Analysis
Based on data from across North America, medicinal cannabis markets typically peak at 2% of the
population.99 Given that as of 2021 the patient population in Europe was estimated at 150,000 –
representing merely 0.02% of the European population – the European market is set for exponential
growth in the coming years.
Using the 2% benchmark the UK, with a population of 67m, would have at least 1.34m patients choosing
cannabis as their primary medicine. However, industry polling suggests that the patient population in
the UK already exceeds that number, with 1.4m patients already self-medicating with cannabis sourced
from the illicit market.100
Despite medicinal cannabis being made legal in 2018, patients in the UK continue to face significant
barriers to accessing their medicines. There are currently only three patients who receive cannabis free
on the NHS, with the overwhelming majority obtaining their prescriptions from private clinics.
There are two key challenges that the government and cannabis industry in the UK must address:
1. Constraints on Prescribers. Currently in the UK only specialist doctors are allowed to initiate
prescription of medicinal cannabis and only under highly restricted circumstances. cannabis is
treated as a drug of last resort, which often means that patients are required to try other
medications before they are allowed to access cannabis and doctors must triage their
prescribing decision with two other peers. This procedure is an administrative burden on
doctors and causes delays and suffering for patients.
Patients accessing medicinal cannabis through existing private clinics are predominately being
treated for conditions that would usually be taken care of by their GPs. For example, data from
the first cohort of 678 patients enrolled in Drug Science’s Project Twenty21 Study found that
the most commonly reported primary conditions were chronic pain (55.6%) and anxiety
disorders (32.0%) and patients reported high levels of multi-morbidity, including high rates of
insomnia and depression.101
Global trends demonstrate that when GPs are permitted to prescribe medicinal cannabis, many
subsequently take an active interest in this subject and further their learning to become active
prescribers. Unsurprisingly, GPs now make up the majority of prescribers in the 55+ countries
where cannabis is legal on prescription.
Australia, which shares many similarities with the UK in terms of medical training and healthcare
delivery, has seen a large uptake in GP prescribing medicinal cannabis since its re-scheduling
in 2018 and patient access numbers overshadow figures currently seen in the UK. As of 31
August 2021, the Australian healthcare regulator has issued 159,665 Special Access Scheme
approvals for medicinal cannabis products, primarily for pain, anxiety, and sleep disorders.102
Closer to home in the Channel Islands, Jersey’s laws permit all doctors, including both
specialists and GPs to initiate scripts and oversee treatment for cannabis-based medicines. It
is estimated that around 2% of the population of Jersey are now being prescribed medicinal
cannabis – predominately by GPs. Patients in Jersey are being treated for common conditions
including chronic pain, sleep issues, anxiety/mood disorders and end-of-life-care.103
99 Colorado & Oregon Department of Health

100 YouGov Poll
101 Developing a real-world evidence base for prescribed cannabis in the United Kingdom
102 MacPhail, S. L., Bedoya-Pérez, M. A., Cohen, R., Kotsirilos, V., McGregor, I. S., & Cairns, E. A. (2022). Medicinal
Cannabis Prescribing in Australia: An Analysis of Trends Over the First Five Years
103 Bussiness Cann
70
2. Affordability. Aside from enabling a greater number of patients to access medicinal cannabis
on the NHS, allowing all GPs to prescribe would make it accessible to patients that do not have
access to private healthcare and reduce the costs of their prescriptions. According to research
by the Primary Care Cannabis Network, 25-30% of GPs in the UK would be willing to prescribe
cannabis if they were allowed to do so.104
A patient can spend upwards of £300 per month (excluding consultation fees) on medicinal
cannabis.105 Licenced medicines such as Sativex and Epidiolex, which are available on the
NHS, are even more expensive. The high cost of medicinal cannabis means that some patients
simply choose to go without their medications or turn to the illicit market for cannabis. By
contrast, in Australia, where 250,000+ prescriptions for medicinal cannabis have been written
to date, a streamlined process has led to a drop in prices for patients and better access to a
wider range of medicines.
Data over the past four years shows strong patient demand for a variety of medicinal cannabis
products. According to estimates by Prohibition Partners, in 2021 private prescriptions for
medicinal cannabis in the UK reached 23,446, an increase of 425% from 4,469 in 2020.106
According to one industry expert, despite patients having to bear the cost of their cannabis
prescriptions, the patient population continues to grow at a rate of 1,000-1,500 new patients
per month.107 Considering such significant demand despite significant constraints, with
improved access and affordability, the industry has the potential to grow exponentially.
104 LVL Health

105 Based on 1g/day at £5/gram of dried flower
106 Prohibition Partners, The European Cannabis Report: 7th Edition
107 Interview with Prof. Mike Barnes, 13 June 2022
71
9.4 Conclusion
The experience of mature jurisdictions such as Colorado show that improved access, affordability and
range of medicinal cannabis product not only stimulates the industry but also protects the patients, as
they turn away from the illicit market. With UK adopting the same approach of easy access with strong
regulatory oversight, by 2030 the UK population of medicinal cannabis patients accessing cannabis
through legal channels is projected to reach 1.4m.
Forecasted No. of Medical Patients

(Current growth vs. Colorado)
1,600,000
1,400,000
1,200,000
No. of Patients
1,000,000
800,000
600,000
400,000
200,000
-
2022 2023 2024 2025 2026 2027
Est. No. UK Patients Current Growth Est. No. UK Patients Extrapolated from Colorado
During the same timeframe, the UK medicinal cannabis market is projected to grow in value to more
than £3.3b. This figure is conservatively based on the sales of flowers and oils alone, with the actual
figure likely to be much higher with the inclusion of ancillary products such as vapouriser devices.
Medical Flower & Oil Sales Vs Patients
£3,000,000 1,600,000
1,400,000
£2,500,000
Flower & Oil Sales (£000s)
No. Returning UK Patients
1,200,000
£2,000,000
1,000,000
£1,500,000 800,000
600,000
£1,000,000
400,000
£500,000
200,000
£0 -
2022 2023 2024 2025 2026 2027
No. Returning UK Patients Estimate Oil Sales (£000s) Estimate Flower Sales (£000s)
72
The UK is an unchallenged leader in the pharmaceutical sub-set of the cannabis industry. The
pioneering work of GW Pharmaceuticals (now Jazz Pharmaceuticals) has contributed vast amounts to
advancing our knowledge of cannabis, bringing to market two licenced medicines, and demonstrating
the power of cannabis in managing some of the most intractable diseases. At the same time, there is
demonstrable demand for whole-plant products and growing body of evidence that they work better for
some patients than isolate-based products. By supporting domestic legislation that champions the
production of a wide range of cannabis-based products, the UK government would deliver more
therapeutic options for patients and solidify its reputation as a premier producer of medicinal cannabis.
If the UK government fails to own this space, other countries will seize this opportunity instead.
73
9.5 Recommendations
In order to produce high-THC medicinal products, the following licences and certificates are required:
1. Home Office Controlled Drug Licence

2. MHRA Manufacturer’s Specials Licence
3. EU GMP Certificate
This licencing regime is a time-consuming and confusing process. Whilst applying for a Home Office
licence to possess, supply and / or produce controlled drugs is rightly a strict and regulated process,
the bureaucratic barriers and confusing process are only likely to lead to smaller market participants
deciding to not enter the space. This will have ramifications for competition, investment and patient
access to high-THC products.
It is well documented that industries dominated by a single company are unlikely to have competitive
pricing structures. As such, at the present time with just one company producing licensed products,
medicinal cannabis is unlikely to be seen as commercially/financially viable by the NHS. It is therefore
imperative that the Home Office makes the application process simpler, and it must also allow for
smaller market participants by making the licensing process clearer.
Recommendations for the UK government:
1. Reform the high-THC cultivation / controlled drugs license system for medicinal cannabis to
make the process simpler and more efficient.
2. Allow GPs to prescribe cannabis and remove the requirement for doctors to triage their
prescription with 2 other peers, as the procedure is slowing down the process.
3. Re-visit NICE Guidelines in order to assess cannabis as a botanical product and not a
pharmaceutical product.
4. Make cannabis more readily available and paid for by the NHS.
74
9.6 Actions
1. 1. HO Drugs and Firearms 3. The Home Office and MHRA should work together to:
Licencing Unit a. produce a simple guide to those applying
2. Medicines and Healthcare for high-THC cultivation licenses.
products Regulatory Agency b. streamline and coordinate the
application process.
c. make all applications transparent
2. 1. Home Secretary 1. Amend wording in paragraph 4 of The Misuse of

2. Advisory Council on the Drugs (Amendments) (cannabis and Licence Fees)
Misuse of Drugs (England, Wales and Scotland) Regulations 2018108
to allow GPs and prescribing pharmacists to
prescribe cannabis.
3. 1. Medicines and Healthcare 1. Commission a re-assessment of NICE guidelines.

products Regulatory Agency
2. National Institute for Health
and Care Excellence
3. Commission on Human
Medicines
4. British Pharmacopoeia
4. 1. Medicines and Healthcare 1. Conduct or contract for a proper and thorough health
products Regulatory Agency economic analysis of adding medicinal cannabis to
2. Independent Assessor the Drug Tariff.
75
9.7 Timeline
1. 1. The Home Office and MHRA should work together to: 1 November 2022
a. produce a simple guide to those applying for
high-THC cultivation licenses.
b. streamline and coordinate the application
process.
c. make all applications transparent
2. 1. Amend wording in paragraph 4 of The Misuse of Drugs 1 February 2023

(Amendments) (cannabis and Licence Fees) (England,
Wales and Scotland) Regulations 2018109 to allow GPs and
prescribing pharmacists to prescribe cannabis.
3. 1. Commission a re-assessment of NICE guidelines. 1 November 2022
4. 1. Conduct or contract for a proper and thorough health 1 November 2022

economic analysis of adding medicinal cannabis to the
Drug Tariff.
76
10.0
Legal adult-use market
77
10.1 Background
The final segment of a fully-fledged cannabis industry is a regulated adult-use market. This plan uses
Colorado as an illustration of the economic value and social benefits of a well-regulated and efficient
state-regulated adult-use program. It discusses lessons learned from Colorado and other US states to
show how effective regulatory models have stimulated economic growth, generated tax revenues and
made positive social impact. Above all, it shows that competitive legal markets have the potential to
extinguish the illicit market.
10.2 Analysis
In 2012 Colorado was the first US state to legalise and establish a regulated cannabis market for adults
21yrs and older. It is a prime example of a mature, well-regulated jurisdiction that has successfully
harnessed the growth of the cannabis industry to stimulate its economy, generate significant tax
revenues, and put the state on the global map as one of the premier destinations for cannabis tourism.
10.3 Tax revenue
Colorado was one of the early proponents of cannabis reform in the US and as a result has achieved a
steady growth in revenue from cannabis tax collections. Since the start of state-licenced adult-use retail
sales of cannabis in February 2014, Colorado has collected nearly £1.8b in taxes.110 As of March 2022
Colorado’s tax take accounted for 20% of the total £8.9b collected by all US states with legal adult-use
markets.111 Considering Colorado’s population of 5.8m, accounting for roughly 6% of the 100m people
living in 11 US states that operated legal adult-use markets in 2021, the outsized proportion of
Colorado’s tax revenues is a testament to the effectiveness of its regulatory model.112
In 2021, the 11 states that allowed legal sales within their borders raised
nearly £2.4b in cannabis excise tax revenue, an increase of 33%
compared to 2020. In 2021, most of the states that allowed cannabis
sales raise 20% more revenue from cannabis excise taxes than from
alcohol excise taxes.113
US states generally impose significant retail and excise taxes on cannabis, coupled with standard state
sales taxes, local taxes, and licensing fees. Colorado has a 15% excise tax on wholesale cannabis and
a 15% retail tax on sales, a portion of which is shared back with local governments, who can adopt their
own taxes. Over the past decade, tax revenue from legal cannabis sales funded improvements to the
state’s public school system, including the construction of new schools, early literacy programmes,
prevention of drop out and bullying and provision of mental health services.114
A significant achievement of the Colorado regulatory model was the fact that it was able to strike a
balance between tax collection and creating an attractive business environment. An important lesson
110 Colorado Department of Revenue

111 Mpp.org – Cannabis Tax Revenue in States that Regulate Cannabis for Adult Use
112 Population source: US Census Bureau. The states are Alaska, Arizona, California, Colorado, Illinois, Maine, Massachusetts,
Michigan, Nevada, Oregon, Washington

113 TEP – Institute on taxation and Economic Policy
114 Colorado Department of Revenue Taxation Division, Marijuana Tax Reports
78
to be learned from the Colorado model is that in order to succeed in the long term, licenced operators
must be able to outcompete the illicit market.
Colorado state regulators understood that while the legal industry was in its infancy, licenced
businesses faced strong competition from the illicit market which, unburdened by tax and already
operating at scale, was able to offer consumers highly competitive prices. Accordingly, the state
introduced a progressive tax rate and a regulatory regime that proved easy for start-up businesses to
navigate. Having nurtured a competitive home-grown industry, Colorado gradually increased taxes, with
tax revenues between 2015 and 2020 growing at a CAGR of 21.8%.115
A comparative analysis illustrates an equivalent tax revenue for the UK market. In 2021 Colorado’s
revenue from cannabis taxes and fees amounted to £344.7m.116 Given that the UK population is 11.6
times that of Colorado, a fully regulated and mature cannabis market in the UK with the same levies as
Colorado could generate annual revenues of £4.11b, equating to 0.42% of all UK receipts forecast for
2022-23.117
The UK is facing unprecedented pressures to identify new sources of tax revenue to replenish state
coffers devastated by the impact of COVID-19. Additionally, the country is striving towards ambitious
goals of achieving the targets of its Net Zero Strategy by 2050. With electric cars being the central plank
of the Net Zero Strategy, the UK treasury needs alternative sources of income to replace the £26.2b118
currently collected through the annual Fuel Duty. A mature and regulated consumer cannabis market
contributing £5.4b annually would equate to over a fifth of that.
10.4 Job creation
As of January 2022, the US cannabis industry employed 428,059 full time workers, representing an
annual growth rate of 28.4% over the previous 5 years.119 This means there are more people employed
in-directly and directly by cannabis businesses then there are firefighters, insurance agents and bank
tellers. Thanks to its attractive regulatory regime, Colorado was able to attract investment, become a
cannabis production hub and a vibrant consumer market, in the process creating 38,337 jobs.120 In
addition to direct cultivation, manufacturing, and retail jobs, the industry creates a wide array of high-
skilled ancillary jobs, including engineering, equipment manufacturing, consulting, accounting, media,
technology, legal, tourism and hospitality.
By cannabis employment figures, Colorado is second only to California, a state with a population 6
times its size. Using the experience of Colorado as a benchmark, at maturity, a fully legalised hemp
and cannabis industry could provide 594,180 jobs. This represents approximately 46.2% of currently
UK unemployed adults (16+).121
115 Colorado Department of Revenue Taxation Division, Marijuana Tax Reports

116 While this analysis uses a simple comparative projection based on population, it is important to note differences in underlying
adult cannabis use rates between the United Kingdom and Colorado. These differences in reported cannabis use may influence
market size, and as such tax revenue generation, in ways that cannot be fully captured by a population comparison. The United
Kingdom drug situation 2019: Focal Point annual report (updated 31 March 2021) provides past year statistics for adult cannabis
consumption – Link. In England and Wales, 7.6% of adults surveyed said that they had used cannabis in the last year. In Scotland
8.4% of adults said they used cannabis in the past year. For Colorado, similar adult cannabis use statistics can be drawn from
the 2019-2020 National Survey on Drug Use and Health – Link. In this report, 27.72% of adults 18 and older in Colorado report
using cannabis at least once in the last year. While these reported use rates differ significantly, it is also important to note that
differences in self-reported drug use may be attributed in part to differences in survey honesty based on legality of adult cannabis
use between jurisdictions.
117 Office for Budget Responsibility
118 Office for Budget Responsibility
119 Leafly Report
120 Leafly Report
121 Office for National Statistics
79
10.5 Consumer protection
Contrary to popular apprehensions about increased criminality and under-age cannabis use, the
experience of legalisation in Colorado shows improvement in consumer safety and social justice
outcomes. In the years since the legalisation of cannabis, Healthy Kids Colorado Survey (HKCS), the
state’s most comprehensive survey on the health and well-being of young people, has shown no
increase in the use of cannabis among children and adolescents. On the contrary, data from the most
recent survey conducted in 2021 showed a decrease in the use of cannabis among youth from 20.6%
in 2019 to 13.3% in 2021.122 Additionally, the survey showed that in 2021 only 40.3% of youth felt it
would be easy to obtain cannabis, a 14.6% drop since 2013,123 indicating an increase in the
effectiveness of regulatory measures to protect young adults from accessing cannabis illegally. Other
government surveys similarly demonstrate that adolescent cannabis use has not increased and, in
some surveys, has declined. The Colorado dataset from the federal National Survey on Drug Use and
Health reported past-month cannabis consumption for adolescents aged 12-17 declined from 12.56%
in 2013-2014, the first year of regulated sales, to 8.45% in 2019-2020.124 The National Institute on Drug
Abuse funded 2020 Monitoring the Future survey of 8th (13-14 year old), 10th (15-16 year old), and
12th (17-18 year old) grade students similarly showed that nationally the use of marijuana "did not
significantly change in any of the three grades for lifetime use, past 12-month use, past 30-day use,
and daily use from 2019-2020."125 Finally, data from the Colorado Division of Criminal Justice indicates
that the state has seen a market reduction in arrests for drug-related crimes across all racial groups.126
Eight years on from legalisation of adult-use cannabis market, Colorado has experienced a decline in
the ease of access and use of cannabis among youth under 18. Additionally, Colorado high school
students, when asked about perceived risk of cannabis, alcohol and tobacco, believe that each is risker
in 2021 than it was in 2019, but that cannabis was the least risky of the three product categories. This
mature and informed approach to cannabis among the young is a testament to the effectiveness of
Colorado’s regulatory model.
Colorado students' perception of risk
90.0%
79.9% 80.0%
80.0%
73.0%
69.6%
70.0%
60.3%
60.0%
50.1%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Regular Cannabis use is risky Daily Alcohol use is risky Daily Vaping is risky
2019 2021
122 Healthy Kids Colorado Survey

123 Healthy Kids Colorado Survey Dashboard
124 National Survey on Drug Use and Health
125 Monitoring the Future (MTF) survey
126 Colorado Division of Criminal Justice
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10.6 Cannabis tourism
Cannabis tourism is now a major industry in jurisdictions where it has been fully legalised. In the US
alone, the cannabis tourism industry is now estimated to be worth £13.8b.127 In 2021 the US legal
cannabis market was estimated to be approximately £20.3b, with £3.7b128, equating to 18%, being
driven by tourists visiting states with legal access. Perhaps more importantly, tourists contributed
additional £10.2b in revenue by visiting restaurants, hotels, attractions, and other retail outlets. In
Colorado this is more pronounced and represents a multiplier effect of an additional $2.80 for every $1
injected into local economies and ultimately that filters through to local and tax coffers.129
Cannabis tourism is an emerging industry, but one that over the coming decades will undoubtedly
command a higher proportion of the current £975b gross value that tourism adds to the US economy
every year. The US cannabis tourism market has developed rapidly and half of millennials now state
that access to regulated cannabis market is important in their choice of travel destination. Furthermore,
43% millennials go as far as saying they have specifically chosen a destination based on whether it
offered legal access to cannabis. Coupled with the fact that by 2025 50% of the travellers will be
millennials, this highlights the clear opportunity that this market presents.130
Colorado is a good case study for the in-direct effects of cannabis legalisation. In 2014, immediately
following the launch of legal retail sales of cannabis, hotel bookings in Denver grew by 3.5%, which in
turn led to a 3.8% increase in room rates.131 This change alone contributed £105.7m in additional hotel
revenue to the city of Denver.132
Cannabis tourism is a relatively new concept but already lifestyle brands are increasingly entering the
market to cater for enthusiastic travellers who are driving the market into a wellness and consumer
friendly territory. Additionally, in places like California there are already tourist attractions such as
Sonoma Hills, where tourists can visit craft cultivators, learn about the integration of the cannabis plant
with traditional farming, how It can be incorporated into a farm-to-table lifestyle while supporting the
natural ecosystems.133 Farms in the Sonoma Valley have benefited from cannabis legislation in the
same way that the wine did in the neighbouring Napa Valley benefitted from wine.
Appellations of origin, in the same way as found with Champagne, whisky or cheese, are on the rise in
the cannabis industry. Cultivators and increasingly vying to promote individual strains from specific
regions134 and tourists treat their visits to cultivation sites as they would a visit to a vineyard in the South
of France or a distillery in the Scottish Highlands. North American does not have a monopoly of
cannabis tourism and its effect can be found in other countries like Thailand, which until recently had a
zero-tolerance stance on the use cannabis. In the next three years the Thai cannabis market is
projected to generate £8.1b in sales, with an even larger multiplier effect driven by tourism.135
127 Forbes
128 Forbes
129 Whitney Economics
130 Cannabis Travel Association International – Brian Applegarth
131 Travelpulse
132 John O’Neill, professor of hospitality management at Penn State University
133 Sonoma Hills
134 What do we know about opportunities and challenges for localities from Cannabis legalization?
135 BBC Article
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Among the greatest benefits of tourism is its potential to develop and revitalise local economies, in turn
improving the quality of life of local residents. In the UK, the Scotch Whisky industry has achieved
exactly that. In 2019 the Scotch Whisky distilleries, 139 in total, were the third most popular tourist
attraction – after the National Museum of Scotland and Edinburgh Castle – with over 2.2m visitors.136
Two in every three visitors to distilleries were international tourists.137 In 2019 visitor centres employed
over 1,200 people, accounting for 10% of Scotland’s tourism sector, and tourists contributed nearly
£85m (2018: £68m) to the local economy.138 Average discretionary spend by each visitor was calculated
to be approximately £39 per visit (2018: £34). Based on the fact that 10% of the Scotch Whisky
industry’s jobs are directly attributable to tourism, the tourism element of a fully regulated cannabis
market could create around 54,354 additional jobs in the UK.

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10.7 Conclusion
The experience of Colorado, and high-quality data available on the market, enables an analysis of the
potential tax revenues and jobs that the new sector could create if the UK implemented clear guidelines
and a robust regulatory framework. The analysis below is based on value add of medicinal and
consumer products alone.
Colorado and UK employment extrapolation

700,000
576,627 585,336 594,177
600,000
Number of jobs
500,000
400,000
300,000
200,000
100,000 49,522 50,270 51,029
-
Colorado Jobs UK Jobs
2025E 2026E 2027E
Colorado and UK taxes extrapolation
5,000 £ 4,469
Estimated Tax Collection (m)
£ 4,311 £ 4,389
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000 $ 456 $ 464 $ 472
500
-
Colorado Taxes UK Taxes
2025E 2026E 2027E
Colorado and UK taxes extrapolation
5,000 £ 4,469
Estimated Tax Collection (m)
£ 4,311 £ 4,389
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000 $ 456 $ 464 $ 472
500
-
Colorado Taxes UK Taxes
2025E 2026E 2027E
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11.0
Lessons learned
84
11.1 United States
With the benefit of nearly a decade of experience across the US with the implementation of different
legislative models, the UK can learn valuable lessons about the effectiveness of different cannabis
policies. Based on an analysis of successes and failures of different policies across various US states,
it is evident that there are three essential ingredients required for successful markets:
1. Availability. For a market to be attractive to investors and generate sizable tax revenues,
consumers need to be able to easily access the market and obtain the products they demand.
This means physical availability in the form of plentiful storefronts and delivery. States with very
limited licenses, delays in implementation, or widespread local restrictions, fail to reach the
number of necessary access points and see the continuation of illicit enterprises. Five years
after California voters legalised adult-use cannabis, only 32% of the state’s local jurisdictions
allow sales —propping up the illicit market and leading to an oversupply of growers. In New
York, only 40 medical dispensaries have been licenced to serve 20m New Yorkers, making the
state one of America’s most ineffective medical markets, driving patients to the illicit market. 139
Analysis of available market data shows that constricting supply or retail availability does not
improve the business environment or protect consumers. Instead, it drives consumers
underground, where taxes are not collected, customers are not asked for ID, and consumers
are exposed to dangerous products, legal risk, and even physical danger.
2. Affordability. Affordability comes with geographic competition, licensing, and a diverse and
robust supply chain. A strong market requires sufficient cultivation and product manufacturing
to enable competition and reduce prices. Otherwise, base prices are too high to allow cannabis
to be effectively taxed while remaining competitive with the illicit market. If regulations are
unclear or confusing, constantly changing, or overly burdensome, legal and operational costs
increase. Products that are legal and compliant one month may be prohibited or require
expensive new packaging the next month. California, for example, has complicated local and
state regimes, difficult bureaucracies, and high taxes that stifled industry growth.
3. Assortment. As with any other consumer products industries, customers demand choice.
Consumers have specific preferences regarding strains, potency levels and modes of ingestion.
US cannabis states that banned the sale of flowers did not perform well because 40-60% of
consumers still demand whole flowers.140 If consumers cannot get the products they desire
from a legal store, they will turn to the illicit market or travel out of state. The recent crash of
the US CBD market offers a cautionary tale. Delays in US FDA regulations prevented big-box
retailers from carrying popular product types like CBD gummies and vape pens. The only
products widely available at major retailers were topicals and tinctures – which are less than
5% of the adult-use market – resulting in underwhelming sales. Projected market sales never
occurred at the pace expected, and the market crashed when there was far too much CBD
supply for underperforming demand.
By introducing regulations that ensure availability, affordability, and assortment – and strictly enforcing
those regulations while maintaining barriers to entry by non-compliant operators, states such as
Colorado have been able to capitalise on the economic potential of the cannabis market.
139 Leafly Report

140 CPS Daily News
85
11.1.1 Eradicating the illicit market
In cannabis as in any other industry, there is likely always to be an illicit market. It is estimated that 12%
of global sales of tobacco, a long-established and highly regulated industry, take place in the illicit
market.141 However, there is clear evidence that with the creation of well-regulated markets that deliver
product that meet customers’ price and quality expectations, the attractiveness of the illicit market
diminishes considerably.
To the extent illicit activity occurs in a state like Colorado, the overwhelming majority is driven by
prohibition in other states where consumers do not have access to a variety of legal products. However,
notwithstanding illicit demand from its neighbouring prohibition states, Colorado’s legal market has
shown rapid growth by outcompeting illicit suppliers and directing existing consumers toward legal
businesses. A study in Colorado as early as 2017 – 3 years after the start of legal sales – found that
the state’s pre-existing illicit market had been fully absorbed into the regulated market.142
Since licensed adult-use cannabis businesses opened their doors to consumers in January 2014,
Colorado cannabis licensees have sold £10.4b worth of legal products.143 From 2015 to 2020, the total
market size averaged 22.2% in year-over-year sales growth. This represents billions of dollars of
consumer demand that goes to licensed businesses rather than the illicit market.
141 KPMG – Illicit cigarette consumption in the EU, UK, Norway and Switzerland
142 Market Size and Demand for Marijuana in Colorado 2017 Market Update
143 Colorado Department of Revenue Taxation Division, Marijuana Sales Reports
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11.1.2 Key takeaways
A successful cannabis regulatory framework is grounded in it having the core elements of an attractive
investor environment, reasonable barriers to entry, and enforcement of responsible regulation designed
for consumer safety. The experience of Colorado shows that a cannabis market will operate effectively
when it is well-regulated, products are available and affordable, and consumer safety and choice are at
the forefront of the market. Regulations must be clear, stable and easy to follow, while taxes must be
reasonable. Enough businesses must be licensed to ensure sufficient supply and product creation and
enable the type of robust competition that brings down prices and increases innovation. Otherwise,
legalisation will only serve to reduce criminal penalties and consumers will continue to patronise
unregulated illicit providers.
For investors, the markets with the fastest return on investment and highest asset valuations are usually
limited licence markets where large companies can expand without restrictions, but competition is
curtailed. However, these are not always (and typically not) the best markets for consumers or
governments seeking to maximise tax revenue. An effective regulatory environment must not severely
limit licences to the extent that it impedes competitive innovation, but rather has sufficient regulation
and high-quality standards to keep out unsafe products and disreputable producers. Reasonable
product regulations (like cGMP) ensure market participants are legitimate and responsible operators,
while allowing for innovation and entrepreneurship. Striking this balance can ensure availability and
access while ensuring the market is attractive for business investors, consumers, and governments.
State legalisation in the US, and especially well-regulated markets like Colorado, has resulted in broad,
generally positive impacts on US public health and economy. It has also demonstrated that legalisation
is more effective than prohibition in safeguarding public safety. In Colorado, monitoring of youth use
since the legalisation of medicinal cannabis 20 years ago shows that legalisation has not meaningfully
changed consumption patterns among youth. What is more, thanks to the new tax revenues, the state
was able to fund important public health programmes. With effective regulation, tens of billions of dollars
of cannabis demand can be redirected from the illegal market to one that is taxed and regulated, job-
creating, and subject to robust manufacturing, testing, safety, and marketing regulation.
“Despite limited access to financial services and an effective tax rate of

70%, the regulated cannabis industry in the US has proven to be an
economic engine. The positive impacts of cannabis legalisation are
evident across the economy, including substantial job creation, billions
in new tax revenues and government savings from reduced
incarceration. We fully expect this trend to accelerate as more states
legalise and regulate cannabis”
Jessica Billingsley, Chair, US Cannabis council (USCC)
Closer to home, Jersey has successfully applied its agility and reputation as a business-friendly
jurisdiction, to attract investors and operators to its burgeoning cannabis industry. In June 2021 Jersey
passed an amendment to its Proceeds of Crime (Jersey) Law, a progressive piece of legislation that
makes two unprecedented allowances for cannabis businesses:
1. It allows Jersey-based businesses to transact with jurisdictions that have legalised adult-use
cannabis, even though the activity is still illegal in Jersey.
2. It includes the US on its list of ‘Approved’ jurisdictions, thereby allowing Jersey companies to own
and transact with companies in US states that have legalised adult-use cannabis, despite the fact
that under US federal law, cannabis remains illegal.
87
Alongside Jersey’s other advantages – stable government, robust regulations, mature professional
services industry and proximity to the UK – a Jersey HQ offers cannabis companies an excellent base
to develop their international operations, making Jersey a destination of choice for international capital.
The island is already well ahead of the UK in servicing its patient population and there are already
several licenced producers set to supply medicinal and consumer products to Jersey and export to
international markets.
Over the past several years the Jersey Government has been able to
demonstrate its agility in innovation to maximise opportunities for start-
up cannabis businesses to set up on the island and to establish Jersey
as a ‘centre of excellence’ on the world stage. Jersey is continuing to
work on developing a seed bank, intellectual property, educational
partners and further opportunities for developing a skilled workforce.
Alignment has been key to the government’s effectiveness. From the
outset, the government set up a cross-departmental steering committee
dedicated to the sector, which quickly identified the key areas that
required reform and the key advantages that would attract businesses to
set up on the island. Setting up the CSAB as a conduit between industry
and government has also helped the government move at the pace of
the wider, commercial world. There is a continued need to update the
existing legislative framework, but there is a significant competitive
advantage that can be gained by doing this thoroughly from the
beginning.”
Daniel Houseago, Group Director, Economy, Department for the

Economy
Finally, while looking for a framework for the burgeoning cannabis industry, legislators need to look no
further than the immensely successful Scotch Whisky industry. The iconic perception of Scotch
Whisky has translated into vast economic benefits, making it one of the pillars of the Scottish
economy:
• In 2021 the Scotch Whisky industry had global turnover of £66b and annually provides
£5.6b in gross value added (GVA) to the UK economy, with exports in 2021 worth £4.6b.
144
• It directly employs 11,000 people in Scotland, 7,000 of these in deprived rural areas, and
supports 42,000 permanent high-value jobs across the UK.
• In 2019 alone, there were 2.2m visits to Scotch Whisky distilleries and their visitor centres,
making the industry the third most popular tourist attraction in Scotland.145
Post-Brexit, the UK has the autonomy to decide and implement its own regulations across all sectors
of the cannabis industry. With the benefit of lessons learned from other jurisdictions, the UK is in an
excellent position to develop robust regulations and a supporting business environment that will allow
UK companies to seize the opportunity offered by the growing global cannabis market.
144 Statista
88
11.1.3 Recommendations
Key to an effective regulatory model will be assigning regulatory oversight to government departments
with the most direct expertise of the different market segments for different cannabis-derived products.
Additionally, the government needs to address two key regulatory hurdles that hold the UK back from
being a destination of choice for cannabis investment capital:
1. Reform the Proceeds of Crime Act 2002. At present, investors remain cautious about
investing in the cannabis sector, owing to the risks associated with the Proceeds of Crime Act
2002 (POCA). As a consequence of POCA, proceeds from medicinal cannabis business in
states such as Colorado may constitute “criminal property” even if fully legal and authorised in
the foreign state. It is essential that the government conducts an urgent review of the Proceeds
of Crime Act 2002 and introduces legislative changes that would give investors legal clarity and
confidence about investing in this space.
2. Ensure Financial Conduct Authority (FCA) issues clear guidelines on listing. In

September 2020 the UK’s Financial Conduct Authority (FCA) published guidance relating to
the listing of cannabis related business on London’s primary markets, the Official List. The FCA
stated that its approach to the listing of the securities of cannabis related business is as follows:
• Adult-use: Any companies who undertake, or who derive a benefit, profits, from adult-use
cannabis operations (regardless of whether these are fully regulated and licenced in
overseas jurisdictions) remain unable to have their securities admitted to the Official List.
• UK Medical: UK-based medicinal cannabis companies, operating in accordance with

applicable law and regulation in the UK, can have their securities admitted to the Official
List.
• Overseas Medical: Medicinal cannabis companies who have operations outside the
UK may have their securities admitted to the Official List, provided they can satisfy the FCA
that their activities would not be a breach of POCA, that their activities would be legal if
carried out in the UK and if they can explain to the FCA the nature of local licensing regime.
While the FCA guidance is helpful, there is still regulatory ambiguity around whole-plant
product, which effectively means that companies engaging in the production of whole plant
products are barred from listing on the main market of the London Stock Exchange. In
recognition of the enduring consumer interest in products containing full-plant extracts, the
government should create the appropriate regulatory framework to support, not hinder, this new
industry.
89
11.1.4 Actions
1. Home Secretary 1. Initiate consultations about amendments to POCA to

enable businesses engage and invest in UK’s legal
medicinal cannabis market.
2. Financial Conduct 2. Ensure the FCA issues clear guidance to the industry on
Authority pathway to listing on the LSE.
90
11.1.5 Timeline
1. 1. Initiate consultations about amendments to POCA to 1 October 2022

enable businesses engage and invest in UK’s legal
medicinal cannabis market.
2. 1. Ensure the FCA issues clear guidance to the industry on 1 March 2023
pathway to listing on the LSE.
91
Cannabis industry
review questionnaire
92
1. What challenges are you currently facing in your business?
(grade from 1 to 4, with 1 being ‘of no concern’ and 4 being ‘of maximum concern’).
a. Restrictions throughout supply chain both in and outside the British Isles (grade 1-4 & why?)
b. UK Legislation on controlled drugs (score 1-4 & why?)
c. UK Legislation on growing and hemp growers licences (score 1-4 & why?)
d. UK Legislation on production and manufacture in the UK (score 1-4 & why?)
e. UK FSA Novel Foods process (score 1-4 & why?)
f. Enforcement by UK Trading Standards (score 1-4 & why?)
g. UK Legislation on Veterinary products (score 1-4 & why?)
h. UK Legislation on Cosmetics and body care products (score 1-4 & why?)
i. Consumer fear of fake or illegal products (score 1-4 & why?)
j. Consumer fear of mislabelling and misrepresentation (score 1-4 & why?)
k. Consumer confusion with products and usage (score 1-4 & why?)
l. Uneven application of restrictions on advertising/label claims (score 1-4 & why?)
m. Lack of harmonised laboratory testing standard (score 1-4 & why?)
n. Ability to open bank accounts (score 1-4 & why?)
o. Ability to use online e-commerce tools such as Shopify (score 1-4 & why?)
p. Access to professional products and services, such as accounting and insurance (score 1-4 &
why?)
2. What regulations or recent recommendations would you change and why?
(If you don't have a comment, please leave blank)
a. Misuse of Drugs Act 1971 ®
b. Misuse of Drugs Regulations 2001 ® [updated in 2016]
c. NICE Guidelines on cannabis, CBD etc ®
d. Hemp Growing Licensing ®
e. Novel Foods Process ®
f. ACMD Report ® [Advice on consumer cannabidiol (CBD) products December 2021]
g. Veterinary Medicines Directive on Cannabidiol ®
3. Are there are any challenges we have omitted, and what would you like
done about them?
4. We'd like to know a little about you
Are you:
a. A cannabis business (hemp grower, manufacturer, seller/stockist)
b. A cannabis-oriented organisation (trade association, supplier to, consultancy)
c. Other
93
Glossary
94
All-Party Parliamentary Groups (APPGs)
APPGs are informal cross-party groups that have no official status within Parliament. They are run by
and for Members of the Commons and Lords, though many choose to involve individuals and
organisations from outside Parliament in their administration and activities.
Cannabidiol (CBD)
Major cannabinoid extracted from cannabis sativa (mostly low-THC hemp). Claimed to provide wide-
ranging properties useful for health and wellness including anti-anxiety, anti-inflammatory, anti-pain,
anti-arthritic, and neuroprotective effects.
Cannabinoids
Cannabinoids are the chemical compounds unique to cannabis that act upon the human body’s
cannabinoid receptors, producing various effects including pain relief and other medically beneficial
uses. Marijuana’s most well-known cannabinoid is tetrahydrocannabinol (THC) since it is the most
abundant, and because it produces the psychoactive effects (or the “high”) that drives the plant’s adult-
use. However, there are over 66 plus known variants of cannabinoids all with differing effects, so THC
isn’t the only one.
A partial list includes but is not limited to:
- CBC (Cannabichromene)
- CBCa (Cannabichromene carboxylic acid)
- CBD (Cannabidiol)
- CBDa (Cannabidiolic Acid)
- CBG (Cannabigerol)
- CBGa (Cannabigerolic Acid)
- CBGV (Cannabigerovarin)
- CBGVa (Cannabigerovarinic Acid)
- CBE (Cannabielsoin)
- CBL (Cannabicyclol)
- CBN (Cannabinol (Illegal in the UK)
- CBND (Cannabinidiol)
- CBT (Cannabitriol)
- THC or Δ9THC (Delta9-Tetrahydrocannabinol (Illegal in the UK)
- Δ9THCa (Delta9-Tetrahydrocannabinolic acid (Illegal in the UK)
- Delta8 (Tetrahydrocannabinol (Illegal in the UK)
- THCV (Tetrahydrocannabivarin)
- THCVa (Tetrahydrocannabivarincarboxylic acid)
Edibles
Edibles are medicated edible goods that have been infused with cannabis extracts. They are commonly
baked goods such as cookies and brownies, but options as varied as flavoured coffee drinks, breads,
and candies exist as well. Dispensaries also often sell marijuana-infused butters or oils for patients or
consumers to make their own edibles. Consuming edibles means the active components from the
extracts require longer to take effect as they need to be absorbed through the digestive system.
Industrial hemp
Industrial hemp refers to cannabis plants cultivated for high yields of materials like seeds, fibre, and oil,
with low concentrations of psychoactive compounds. The common limit for Tetrahydrocannabinol (THC)
content in hemp materials in Europe is 0.2% w/w but this varies and can be as high as 0.6% and 1% in
Italy and Switzerland respectively.
95
Marijuana
Marijuana is the general term for female cannabis plants or their dried flowers. Females are distinct
from male plants in that they are the ones that produce flowers which contain the high percentage of
cannabinoids that hold both their medicinal and psychoactive properties.
Medicinal cannabis
Cannabinoid-based medicine not holding marketing authorisation and therefore sold as an unlicensed
medicine that is supplied through health systems and prescribed by a doctor; or Active Pharmaceutical
Ingredient (API) to be manipulated and/or compounded by a magistral pharmacy to prepare a
cannabinoid-based medicine without marketing authorisation (unlicensed).
Minor Cannabinoids
Cannabinoids found in low concentrations in the cannabis plant such as Cannabigerol (CBG) and
Cannabinol (CBN). Many have been shown to be bio-active though evidence for their therapeutic
benefits is yet lacking. Many researchers hope these will provide a host of new ways of modulating the
endocannabinoid system.
Novel Foods
Novel Food is defined as food that had not been consumed to a significant degree by humans in the
EU before 15 May 1997, when the first Regulation on novel food came into force ‘Novel Food’ can be
newly developed, innovative food, food produced using new technologies and production processes,
as well as food which is or has been traditionally eaten outside of the EU. The underlying principles
underpinning Novel Food in the European Union are that
Novel Foods must be:
• Safe for consumers

• Properly labelled, so as not to mislead consumers
• If novel food is intended to replace another food, it must not differ in a
way that the consumption of the Novel Food would be nutritionally disadvantageous for the consumer
Pre-market authorisation of Novel Foods on the basis of an evaluation in line with the above principles
is necessary.
Pharmaceutical cannabis
Formulated, processed or synthetic cannabis sold as a finished product, which has undergone full
medical trials, and holds (in one or more geographical areas) a medical marketing authorisation e.g.,
Cesamet®, Marinol®, Syndros®, Sativex®, Epidiolex® and any derived generic medicines (such as
dronabinol).
The Proceeds of Crime Act (POCA)
The Proceeds of Crime Act 2002 is an Act of the Parliament of the United Kingdom which provides for
the confiscation or civil recovery of the proceeds from crime and contains the principal money
laundering legislation in the UK.
Terpenes
Are a large and diverse class of organic compounds, produced by a variety of plants. They often have
a strong odour and may protect the plants that produce them by deterring herbivores and by attracting
predators and parasites of herbivores. Terpenes and terpenoids are the primary constituents of the
96
essential oils of many types of plants and flowers. Synthetic variations and derivatives of natural
terpenes and terpenoids also greatly expand the variety of aromas used in perfumery and flavours used
in food additives.
Tetrahydrocannabinol (THC)
The other primary cannabinoid, and the main psychoactive cannabinoid of cannabis. THC is considered
the primary source of the ‘high’ produced by ingesting cannabis. Evidence suggests that THC exhibits
medicinal properties that are useful in treating chemotherapy-related nausea, pain, and spasticity. THC
can also be synthesised and, in general, is more widely controlled than CBD.
Tincture
A tincture is a liquid cannabis extract usually made with alcohol or glycerol that is often dosed with a
dropper. Tinctures can be flavoured and are usually placed under the tongue, where they are absorbed
quickly. Effects can be felt within minutes. Tinctures can also be mixed into a drink, but in these cases,
effects will take longer because the tinctures will be absorbed by the digestive system.
97
Abbreviations
98
Abbreviation Description
ACMD Advisory Council on the Misuse of Drugs
ASA Advertising Standards Agency
BHA British Hemp Association
CIC Cannabis Industry Council
CND Commission On Narcotic Drugs
COA Certificate of Analysis (Lab Report)
CosIng Cosmetic ingredient database
CPD Cannabis Products Directive
CTPA Cosmetic, Toiletry and Perfume Association
DBS Disclosure & Barring Service
DEFRA Department for Environment, Food & Rural Affairs
DFLU Drugs & Firearms Licensing Unit
EFSA European Food Safety Agency
EIHA European Industrial hemp Association
FDA Federal Drugs Agency (USA only)
FSA Food Standards Agency
GDP Good Distribution Practice
GMC General Medical Council
GMP Good Manufacturing Practice
HFMA Health foods Manufacturers Association
HO Home Office
IHMB Industrial hemp Marketing Board
INCI International Nomenclature Cosmetic Ingredients
MA Marketing Authorisation (formerly known as a Medicine’s License)
MoDA Misuse of Drugs Act 1971
MDR Misuse of Drugs Regulations 2001
NFR Novel Foods Regulations
NFWG Novel Foods Working Group
NIH Northern Ireland Hemp
NICE National Institute for Health and Care Excellence
SAB Secretariat Advisory Board
SANTE Administrators of the Novel Foods Register Europe
SCCS Scientific Committee on Cosmetic Safety
SHA Scottish Hemp Association
TPD Tobacco Products Directive
TS Trading Standards
UN61 United Nations Treaty on Narcotics 1961
VMD Veterinary Medicines Directorate
99
Appendix
100
APPG - Business Plan Model
Jurisdiction Sector Market Department Gross Sales ($000s) Tax Take ($000s) Jobs Support Schedule
Colorado Recreational Adult-use Colorado Government $2,304,750 31,600 A1
Colorado Medical Medical Colorado Government $376,300 $472,420 7,010 A1
Colorado CBD CBD & Hemp Colorado Government $213,590 11,520 A1
Colorado Total $2,894,640 $472,420 50,130
Jurisdiction Sector Market Department Gross Sales ($000s) Tax Take ($000s) Jobs* Support Schedule
USA Recreational Adult-use US Federal Government $132,324,160 1,814,540 A1
USA Medical Medical US Federal Government $21,604,930 $27,123,210 402,180 A1
USA CBD CBD & Hemp US Federal Government $12,263,250 713,050 A1
USA Total $166,192,340 $27,123,210 2,929,770
Jurisdiction Sector Market Department Gross Sales (£000s) Tax Take (£000s) Jobs* Support Schedule
UK Recreational Adult-use Cabinet £21,802,090 £3,308,950 368,000 A1
UK Medical Medical Home Office / MHRA £3,300,590 £755,840 81,570 A2
UK CBD Topicals Trading Standards £23,950 £4,790 A3
38,900
UK CBD Ingestibles Trading and Veterinary Standards / FSA £1,996,580 £399,310 A4
UK Subtotal (i) £27,123,210 £4,468,890 488,470
UK Hemp Agricultural DEFRA £1,459,940 £292,000 42,930 A5
UK Hemp Industrial Manufacturing DEFRA / BEIS / Trade Dept. £1,608,730 £321,750 21,620 A6
UK Hemp Animal Feed DEFRA £765,940 £153,190 9,510 A7
UK Hemp Carbon Credits DEFRA / BEIS £1,285,340 £254,920 31,650 A8
UK Subtotal (ii ) £5,119,950 £1,021,860 105,710
UK Total £32,243,160 £5,490,750 594,180
Information procured from secondary and primary data to establish baselines for forecasting has been analysed as follows:
1 Identifying variables and establishing market impact
2 Establishing market trends
3 Analysing future opportunities and market penetration rates by understanding product commercialisation, regional expansion etc.
4 Analysing changes in the industry dynamics to establish future growth
5 Analysing historical market trends and super-imposing them on the current and future variables to determine year-on-year trend
6 Derivation of market estimates via analysing other geographical markets
Financial modelling approach:

1 Bottom-up approach for estimating and forecasting demand size and opportunity - Schedules A2, A5, A6 & A7
2 Top-down approach for new product forecasting and penetration - Schedules A3, A4 & A8
3 Combined approach of both Bottom-up and Top-down for full coverage analysis
101
A1 - Tax, Jobs and Gross Sales (000s) 2022E 2023E 2024E 2025E 2026E 2027E
Colorado ($000)
Colorado Sales Tax $297,452 $302,851 $308,347 $313,943 $319,641 $325,443
Colorado Excise Tax $121,304 $123,506 $125,747 $128,029 $130,353 $132,719
Colorado License Fees $13,030 $13,266 $13,507 $13,752 $14,002 $14,256
Colorado Total Tax ($000) $431,786 $439,623 $447,602 $455,725 $463,996 $472,417
Colorado Population ('000s) 5,773,000 5,773,000 5,773,000 5,773,000 5,773,000 5,773,000
UK Population ('000s) 67,220,000 67,220,000 67,220,000 67,220,000 67,220,000 67,220,000

UK Total Tax Take (£000) £4,084,537 £4,158,668 £4,234,145 £4,310,992 £4,389,233 £4,468,894
US Population ('000s) 331,449,000 331,449,000 331,449,000 331,449,000 331,449,000 331,449,000

US Total Tax Take ($000) $24,790,417 $25,240,344 $25,698,437 $26,164,845 $26,639,717 $27,123,208
Employment (000s) Dec-22 Dec-23 Dec-24 Dec-25 Dec-26 Dec-27

Period
Colorado
Total Cannabis Jobs (Excl. Hemp) 38,916 39,504 40,100 40,706 41,321 41,945
Recreational Jobs 29,322 29,765 30,215 30,671 31,134 31,605
Medical Jobs 6,499 6,597 6,697 6,798 6,901 7,005
CBD Jobs 3,094 3,141 3,189 3,237 3,286 3,335
Hemp 8,428 8,556 8,685 8,816 8,949 9,084
Total jobs in Colorado 47,344 48,059 48,785 49,522 50,270 51,029
Colorado Population 5,773,000 5,773,000 5,773,000 5,773,000 5,773,000 5,773,000
UK
UK Population 67,220,000 67,220,000 67,220,000 67,220,000 67,220,000 67,220,000
Recreational Jobs 341,426 346,583 351,817 357,131 362,525 368,000
Medical Jobs 75,675 76,818 77,979 79,156 80,352 81,566
CBD Jobs 36,031 36,575 37,128 37,689 38,258 38,836
Hemp Jobs 98,137 99,619 101,124 102,651 104,201 105,775
Total Jobs 551,270 559,596 568,048 576,627 585,336 594,177
US
US Population 331,449,000 331,449,000 331,449,000 331,449,000 331,449,000 331,449,000
Recreational Jobs 1,683,506 1,708,933 1,734,744 1,760,945 1,787,542 1,814,540
Medical Jobs 373,141 378,777 384,498 390,305 396,200 402,184
CBD Jobs 177,663 180,347 183,071 185,836 188,642 191,491
Hemp Jobs 483,895 491,203 498,622 506,153 513,798 521,558
Total Jobs 2,718,206 2,759,260 2,800,935 2,843,239 2,886,182 2,929,773
Gross Sales (000s)

Colorado Dec-22 Dec-23 Dec-24 Dec-25 Dec-26 Dec-27
Period
Recreational Gross Sales $1,897,029 $1,972,350 $2,050,661 $2,132,082 $2,216,736 $2,304,751
Medical Gross Sales $399,584 $394,815 $390,104 $385,448 $380,848 $376,303
CBD Gross Sales $195,909 $199,325 $202,800 $206,336 $209,934 $213,595
Total Gross Sales ($000s) $2,492,522 $2,566,490 $2,643,565 $2,723,867 $2,807,518 $2,894,649
Colorado Population 5,773,000 5,773,000 5,773,000 5,773,000 5,773,000 5,773,000
UK
UK Population 67,220,000 67,220,000 67,220,000 67,220,000 67,220,000 67,220,000
Recreational Gross Sales £17,945,190 £18,657,699 £19,398,498 £20,168,710 £20,969,504 £21,802,092
Medical Gross Sales £3,779,919 £3,734,809 £3,690,237 £3,646,197 £3,602,682 £3,559,687
CBD Gross Sales £1,853,226 £1,885,539 £1,918,416 £1,951,867 £1,985,900 £2,020,527
Total Gross Sales (£000s) £23,578,335 £24,278,047 £25,007,151 £25,766,774 £26,558,086 £27,382,306
US
US Population 331,449,000 331,449,000 331,449,000 331,449,000 331,449,000 331,449,000
Recreational Gross Sales $108,915,338 $113,239,792 $117,735,948 $122,410,622 $127,270,904 $132,324,161
Medical Gross Sales $22,941,588 $22,667,798 $22,397,275 $22,129,981 $21,865,877 $21,604,925
CBD Gross Sales $11,247,844 $11,443,967 $11,643,509 $11,846,530 $12,053,091 $12,263,254
Total Gross Sales ($000s) $143,104,770 $147,351,557 $151,776,732 $156,387,134 $161,189,872 $166,192,340
Assumptions No. / Pct. Link Source

USA Population ('000s) 331,449,000 Link United States Census Bureau
UK Population ('000s) 67,220,000 Link The World Bank
Colorado Population ('000s) 5,773,000 Link United States Census Bureau
102
Colorado Sales Tax CAGR (%) 1.8% Link Colorado Legislative Council Staff March 2022 | Page 35
Colorado Excise Tax CAGR (%) 1.8% Link Colorado Legislative Council Staff March 2022 | Page 35
Colorado License Fees CAGR (%) 1.8% Link Colorado Legislative Council Staff March 2022 | Page 35
Recreational Jobs 28,886 Pro-rata based on Colorado Gross Sales $

Medical Jobs 6,402 Pro-rata based on Colorado Gross Sales $
CBD Jobs 3,048 Pro-rata based on Colorado Gross Sales $
Total Cannabis Jobs (Excl. Hemp) 38,337 Link Leafly Jobs Report 2022 Page 5
Hemp Jobs 8,303 Link Colorado Business Outlook 2020 Page 39
Colorado Jobs CAGR (%) 1.5% Link Leafly Jobs Report 2022 Page 10
Recreational Gross Sales ($) $1,824,584 Link Colorado Department of Revenue - Marijuana State Sales Report
Medical Gross Sales ($) $404,411 Link Colorado Department of Revenue - Marijuana State Sales Report
CBD Gross Sales ($) $192,551 Link Statista 2019
Recreational Sales Growth % 3.9% Link Colorado Legislative Council Staff March 2022 | Page 27
Medical Sales Growth % -1.2% Link Colorado Legislative Council Staff March 2022 | Page 29
CBD Sales Growth % 1.7% Link Internal extrapolation
July Monthly Exchange Rates - GBP:USD 1.2309 Link HMRC
Notes
Colorado is one of the longest standing regulated Cannabis market globally and serves as a strong baseline for an extrapolation of taxes, jobs and gross sales to
size the US and UK markets.
103
A2 – Medicinal Cannabis 2022E 2023E 2024E 2025E 2026E 2027E
UK Population 67,220,000 67,220,000 67,220,000 67,220,000 67,220,000 67,220,000

Est. No. Medical Patients Increase 1,500 1,500 1,500 1,500 1,500 1,500
Est. No. UK Patients Current Growth 29,500 47,500 65,500 83,500 101,500 119,500
Medical Patients % of Population 0.044% 0.071% 0.097% 0.124% 0.151% 0.178%
COL Population 5,773,000 5,773,000 5,773,000 5,773,000 5,773,000 5,773,000

Act. No. Medical Patients 2,073 5,645 47,298 72,023 96,987 120,631
Medical Patients % of Population 0.0359% 0.0978% 0.8193% 1.2476% 1.6800% 2.0896%
Est. No. UK Patients Extrapolated from Colorado 24,138 65,724 550,726 838,624 1,129,306 1,404,609
No. Returning UK Patients 22,931 62,438 523,190 796,693 1,072,841 1,334,379
Oil Market Share % 26.8% 28.3% 29.8% 31.3% 32.8% 34.3%

Number of Patients (Oil) 6,136 17,643 155,686 249,023 351,432 457,120
Ave. Oil prescriptions per Patient (Per Annum) 12 12 12 12 12 12
Est. Total Prescriptions 73,629 211,717 1,868,237 2,988,281 4,217,183 5,485,440
Ave. Mg per Prescriptions (mg) 1,000 1,000 1,000 1,000 1,000 1,000
% Price Compression 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Ave £ per Mg £0.14 £0.14 £0.14 £0.14 £0.14 £0.14
Estimate Oil Sales (£000s) £10,257 £29,345 £257,658 £410,074 £575,826 £745,260
Flower Market Share % 73.2% 71.7% 70.2% 68.7% 67.2% 65.7%

Number of Patients (Flower) 16,796 44,795 367,504 547,669 721,409 877,259
Ave. Flower prescriptions per Patient (Per Annum) 12 12 12 12 12 12
Est. Total Prescriptions 201,546 537,535 4,410,043 6,572,033 8,656,905 10,527,103
Ave. Grams per Prescriptions (g) 30 30 30 30 30 30
% Price Compression 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%
Ave £ per Gram £8.43 £8.36 £8.29 £8.23 £8.16 £8.09
Estimate Flower Sales (£000s) £50,974 £134,838 £1,097,191 £1,621,706 £2,118,694 £2,555,333
Estimate Oil Sales (£000s) £10,257 £29,345 £257,658 £410,074 £575,826 £745,260
Estimate Flower Sales (£000s) £50,974 £134,838 £1,097,191 £1,621,706 £2,118,694 £2,555,333
Total Medical Sales (£000s) £61,231 £164,184 £1,354,849 £2,031,780 £2,694,519 £3,300,593
Oil Tax £2,350 £6,720 £59,000 £93,910 £131,860 £170,660

Flower Tax £11,670 £30,880 £251,260 £371,370 £485,180 £585,170
Excise Tax £1,776 £4,761 £39,291 £58,922 £78,141 £95,717

Sales Tax £12,246 £32,837 £270,970 £406,356 £538,904 £660,119
Total Tax £14,022 £37,598 £310,260 £465,278 £617,045 £755,836

COL Population ('000s) 5,773,000 Link United States Census Bureau
Est. No. Medical Patients Increase 1,500 As per Mike Barnes interview 13/06/22
Est. No. UK Patients Current Growth 11,500 As per Mike Barnes interview 10/12/21
No. Returning UK Patients 95.0% Internal estimation
Oil Market Share % Increase 1.5% Internal estimations based on industry experience
Oil Market Share % 2021 25.3% Link Project T21 Drug Science
Ave. Oil prescriptions per Patient (Per Annum) 12 Internal estimations based on industry experience
Ave. Mg per Prescriptions (mg) 1,000 Internal estimations based on industry experience
% Price Compression 0.5% Internal estimations based on industry experience
Ave £ per Mg 0.14 Link MedBud - Navigating Medical Cannabis
Flower Market Share % Decrease -1.5% Inverse of Cell C49 (Flower cedes market share to Oil)
Flower Market Share % 2021 74.7% Link Project T21 Drug Science
Ave. Flower prescriptions per Patient (Per Annum) 12 Internal estimations based on industry experience
Ave. Grams per Prescriptions (g) 30 Internal estimations based on industry experience
% Price Compression 0.8% Internal estimations based on industry experience
Ave £ per Gram 8.50 Link MedBud - Navigating Medical Cannabis
Excise Tax (%) 2.9% Link Colorado Department of Revenue

Sales Tax (%) 20.0% Link Based on UK VAT Rate
104
Research & Development 5,000
Internal
Cultivation 10,000
estimations
Processing & Manufacturing 17,850
based on
Laboratories / Quality Analysis 7,020
industry
Distribution / Logistics 10,000
experience
Retail & Pharmacy 15,000
In-Direct Roles 16,700

Total 81,570
Notes
Colorado is one of the longest standing regulated Medical Cannabis markets and readily published data for the number of medical patients allows
for extrapolation across the UK population. With industry consultations and other market data a forecast of medical oil and flower sales can be
produced.
105
A3 - Topicals (£) 2022E 2023E 2024E 2025E 2026E 2027E
Colorado
Colorado Total Topicals ($000s) $2,322 $2,362 $2,403 $2,445 $2,488 $2,531
UK
UK Population ('000s) 67,220,000 67,220,000 67,220,000 67,220,000 67,220,000 67,220,000
Creams £12,080 £12,290 £12,510 £12,720 £12,950 £13,170
Balms £5,490 £5,590 £5,690 £5,780 £5,890 £5,990
Lotions £3,290 £3,350 £3,410 £3,470 £3,530 £3,590
Pet lotions £1,100 £1,120 £1,140 £1,160 £1,180 £1,200
UK Total Topicals Gross Sales (£000s) £21,960 £22,350 £22,740 £23,130 £23,540 £23,950
Creams sales tax (£000) £2,420 £2,460 £2,500 £2,540 £2,590 £2,630
Balms sales tax (£000) £1,100 £1,120 £1,140 £1,160 £1,180 £1,200
Lotions sales tax (£000) £660 £670 £680 £690 £710 £720
Pet Lotions sales tax (£000) £220 £220 £230 £230 £240 £240
UK Total Tax (£000) £4,400 £4,470 £4,550 £4,620 £4,720 £4,790

Colorado Total CBD Sales 2021 ($000s) $192,551 Link Statista (Including market extrapolation)
Colorado Topicals Market Share 2021 (%) 1.19% Link Headset
Colorado Topicals CAGR % 1.7% Link Internal extrapolation
Creams market share % 55.0% Internal estimates

Lotions market share % 25.0% Internal estimates
Balms market share % 15.0% Internal estimates
Pet lotions market share % 5.0% Link Nielsen IQ
June Monthly Exchange Rates - GBP:USD 1.2309 Link HMRC
Jobs No. Source

Processing & Manufacturing 2,225 Internal
Laboratories / Quality analytics 1,250 estimations
Distribution / Logistics 1,250 based on
Retail 2,500 industry
Administrative 2,500 experience
Total 9,725
Notes
Topical sales have been forecast on the extrapolation of the Colorado market and the current product sales mix for CBD products.
106
A4 – Ingestibles (£) 2022E 2023E 2024E 2025E 2026E 2027E
Colorado Total Ingestibles ($000s) $193,587 $196,963 $200,397 $203,891 $207,446 $211,063
UK
UK Population ('000s) 67,220,000 67,220,000 67,220,000 67,220,000 67,220,000 67,220,000
Vapes £1,065,740 £1,084,330 £1,103,230 £1,122,470 £1,142,050 £1,161,960
Beverages £642,680 £653,880 £665,290 £676,890 £688,690 £700,700
Capsules £55,030 £55,990 £56,970 £57,960 £58,970 £60,000
Tinctures & Oils £45,640 £46,430 £47,240 £48,070 £48,900 £49,760
Gummies £22,170 £22,560 £22,950 £23,350 £23,760 £24,170
UK Total Ingestibles (£000s) £1,831,260 £1,863,190 £1,895,680 £1,928,730 £1,962,370 £1,996,580
Vapes sales tax (£000) £213,150 £216,870 £220,650 £224,490 £228,410 £232,390
Beverages sales tax (£000) £128,540 £130,780 £133,060 £135,380 £137,740 £140,140
Capsules sales tax (£000) £11,010 £11,200 £11,390 £11,590 £11,790 £12,000
Tinctures & Oils sales tax (£000) £9,130 £9,290 £9,450 £9,610 £9,780 £9,950
Gummies sales tax (£000) £4,430 £4,510 £4,590 £4,670 £4,750 £4,830
UK Total Tax (£000) £366,260 £372,650 £379,140 £385,740 £392,470 £399,310

Colorado Total CBD Sales 2021 ($000s) $192,551 Link Statista (Including market extrapolation)
Colorado Ingestibles Market Share 2021 (%) 98.81% Link Headset
Colorado Ingestibles CAGR % 1.7% Link Internal extrapolation
Vapes market share % 58.2% Based on Colorado market share

Beverages market share % 35.1% Based on Colorado market share
Capsules market share % 3.0% Based on Colorado market share
Tinctures & Oils market share % 2.5% Based on Colorado market share
Gummies market share % 1.2% Based on Colorado market share
June Monthly Exchange Rates - GBP:USD 1.2309 Link HMRC

July Monthly Exchange Rates - GBP:EUR 1.1616 Link HMRC
Jobs No. Source

Internal
estimations
Processing & Manufacturing 6,675 based on
Laboratories / Quality analytics 3,750 industry
Distribution / Logistics 3,750 experience
Retail 7,500
Administrative 7,500
Total 29,175
Notes
Ingestible sales have been forecast on the extrapolation of the Colorado market and the current product sales mix for CBD products.
107
A5 - Agricultural 2022E 2023E 2024E 2025E 2026E 2027E
No. of Hemp Licenses (Cumulative) 92 170 314 458 674 890

Area of Hemp per License (Ha) 76 112 148 184 220 256
Total Hemp Area (Ha) 6,992 19,040 46,472 84,272 148,280 227,840
% Total UK Cereal Crops 0.2% 0.6% 1.4% 2.5% 4.4% 6.8%
Seed Propagation Area Required 1,032 2,791 5,626 8,901 13,717 18,227
Hemp Area Harvested Excl. Seed Prop (Ha) 5,960 16,249 40,846 75,371 134,563 209,613
Average Biomass Yield (Tns per Ha) 35,758 97,496 265,500 527,596 1,009,223 1,676,902
Flower (Tns) 3,576 9,750 26,550 52,760 100,922 167,690
Fibre (Tns) 8,046 21,937 59,738 118,709 227,075 377,303
Shives (Tns) 16,091 43,873 119,475 237,418 454,150 754,606
Dust (Tns) 8,046 21,937 59,738 118,709 227,075 377,303
Seed Yield (Tns) 3,576 9,750 28,592 60,297 121,107 209,613

Seed Oil (Tns) 1,073 2,925 8,578 18,089 36,332 62,884
Seed Protein (Tns) 1,073 2,925 8,578 18,089 36,332 62,884
Seed Hulled (Tns) 1,073 2,925 8,578 18,089 36,332 62,884
Seed Fibre (Tns) 358 975 2,859 6,030 12,111 20,961
Hemp Flower Wholesale

Hemp Flower (£/%CBD/kg) 1.41 1.15 0.94 0.77 0.63 0.51
Hemp Flower Value (£000s) 15,097 33,643 74,884 121,628 190,164 258,260
Hemp Fibre Wholesale

Hemp Fibre (£/kg) 0.53 0.51 0.48 0.46 0.44 0.41
Hemp Fibre Value (£000s) 4,282 11,105 28,762 54,363 98,907 156,310
Hemp Shives Wholesale

Hemp Shives (£/kg) 0.41 0.39 0.37 0.35 0.34 0.32
Hemp Shives Value (£000s) 6,588 17,084 44,250 83,635 152,164 240,477
Hemp Oil Wholesale

Hemp Oil (£/kg) 9 8 8 7 6 6
Hemp Oil Value (£000s) 10,023 24,718 65,563 125,053 227,173 355,627
Hemp Protein Powder Metrics Wholesale

Hemp Protein Powder (£/kg) 3 3 3 2 2 2
Hemp Protein Powder Value (£000s) 4,312 10,904 29,660 58,015 108,079 173,506
Hemp Dehulled Seed Wholesale

Hemp Dehulled Seed (£/kg) 6 6 5 5 5 4
Hemp Dehulled Seed Value (£000s) 6,853 17,330 47,139 92,204 171,772 275,757
Total Agricultural (£000s) 47,154 114,784 290,258 534,897 948,258 1,459,938

Hemp Flower Tax (£000s) 3,020 6,730 14,980 24,330 38,030 51,650
Hemp Fibre Tax (£000s) 860 2,220 5,750 10,870 19,780 31,260
Hemp Shives Tax (£000s) 1,320 3,420 8,850 16,730 30,430 48,100
Hemp Oil Tax (£000s) 2,000 4,940 13,110 25,010 45,430 71,130
Hemp Protein Powder Tax (£000s) 860 2,180 5,930 11,600 21,620 34,700
Hemp Dehulled Seed Tax (£000s) 1,370 3,470 9,430 18,440 34,350 55,160
Total Agricultural Tax 9,430 22,960 58,050 106,980 189,650 292,000

Licenses Increase (Monthly) 6 Industry Consultations (Jamie Bartley of Unyte Hemp)
Hectares Increase (Monthly) 3 "
Licenses (Cumulative) 20 "
Area Drilled / Licenses (Ha) 40 "
% Total Cereal Crop 3,347,000 Link Defra Statistics: Agricultural Facts Page 7
Seed Propagation Area Required 80 Industry Consultations (Jamie Bartley of Unyte Hemp)
Yield Growth (Tns per Ha) 0.5 Industry Consultations (Jamie Bartley of Unyte Hemp)
Average Biomass Yield (Tns per Ha) 6.0 "
Flower (Tns) 10% "
Fibre (Tns) 23% "
Shives (Tns) 45% "
108
Dust (Tns) 23% "
Seed Yield (Tns) 0.6 "
Seed Oil (Tns) 30% "
Seed Protein (Tns) 30% "
Seed Hulled (Tns) 30% "
Seed Fibre (Tns) 10% "
Ave. % CBD Potency 3% Internal estimations based on industry experience

Hemp Flower % Price Compression -20% Internal estimations based on industry experience
Hemp Flower (£/kg) Wholesale £1.72 Link CanXChange June 2022 Benchmark Report Page 20
Hemp Fibre % Price Compression -5.0% Internal estimations based on industry experience
Hemp Fibre (£/kg) Wholesale £0.56 Link CanXChange June 2022 Benchmark Report Page 23
Hemp Shives % Price Compression -5.0% Internal estimations based on industry experience
Hemp Shives (£/kg) Wholesale £0.43 Link CanXChange June 2022 Benchmark Report Page 22
Hemp Oil % Price Growth -10.0% Internal estimations based on industry experience
Hemp Oil (£/kg) Wholesale 10.33 Link CanXChange June 2022 Benchmark Report Page 40
Hemp Protein Powder % Price Growth -7.5% Internal estimations based on industry experience
Hemp Protein Powder (£/kg) Wholesale 3.25 Industry Consultations (Jamie Bartley of Unyte Hemp)
Hemp Dehulled Seed % Price Growth -7.5% Internal estimations based on industry experience
Hemp Dehulled Seed (£/kg) Wholesale 6.89 Link CanXChange June 2022 Benchmark Report Page 39
Tax (%) 20.0% Link Based on UK VAT Rate
Jobs No. Source

Cultivation 12,000
Based on
Manufacturing 7,500
industry
Processing 10,000
consultations
Total jobs 42,930
Assumptions
July Monthly Exchange Rates - GBP:USD 1.2309 Link
July Monthly Exchange Rates - GBP:EUR 1.1616 Link
Notes
Building Material and other textiles forecasts have been built using a bottom approach coupled with industry consultations similar to the Carbon
Credit calculation on A8.
Applying industry biomass yields to the Hemp hectarage drilled the total dry weight of Hemp Flower, Shiv, Fibre and Plant waste is calculated. The
following five year value can be calculated based on current wholesale prices from industry reports and estimated future price compression.
109
A6 - Industrial Manufacturing 2022E 2023E 2024E 2025E 2026E 2027E

Seed Propagation Area Required 1,032 2,791 5,626 8,901 13,717 18,227
Average Biomass Yield (Tns per Ha) 35,758 97,496 265,500 527,596 1,009,223 1,676,902
Flower (Tns) 3,576 9,750 26,550 52,760 100,922 167,690
Fibre (Tns) 8,046 21,937 59,738 118,709 227,075 377,303
Shives (Tns) 16,091 43,873 119,475 237,418 454,150 754,606
Dust (Tns) 8,046 21,937 59,738 118,709 227,075 377,303
Dust metrics - Biochar

Pyrolysis Yield (Est. 20% Yield) 2,005 5,466 14,884 29,577 56,577 94,007
Biochar Value (£000s) 1,002 2,733 7,442 14,788 28,288 47,003
Hempcrete
Hempcrete (Tns) 36,162 98,595 268,493 533,543 1,020,600 1,695,807
Hempcrete (£/Tn) Wholesale 1,001 903 816 736 665 600
Hempcrete Value (£000s) 36,189 89,073 218,972 392,817 678,330 1,017,483
UK Thermal Insulation Market 2022E 2023E 2024E 2025E 2026E 2027E

UK Thermal Insulation Market (£000s) 962,407 986,397 1,010,986 1,036,187 1,062,017 1,088,491
% Hemp Feed Market Share Cumulative 8.3% 16.7% 25.0% 33.3% 41.7% 50.0%
Hemp Insulation Share 80,201 164,400 252,746 345,396 442,507 544,245
Biochar Tax 200 550 1,490 2,960 5,660 9,400

Hempcrete Tax 7,240 17,810 43,790 78,560 135,670 203,500
Hemp Thermal Insulation Tax 16,040 32,880 50,550 69,080 88,500 108,850
Total Industrial Manufacturing Tax 23,480 51,240 95,830 150,600 229,830 321,750
Processing Facility Metrics

Processing Facility 3 4 10 19 33 53
# of Large 1ry Processing Facility 1 1 3 6 10 16
# of Large 2ry Processing Facility 1 1 3 6 10 16
# of Small Biochar Facilities (Tns/Hr) 1 2 4 7 13 21
Total Direct Manufacturing Jobs 94 104 292 574 970 1,554
Large 1ry Processing Facility 54 54 162 324 540 864
Large 2ry Processing Facility 30 30 90 180 300 480
Total Direct & In-Direct Biochar Jobs (Each) 10 20 40 70 130 210
Total In-Direct Jobs 40 40 120 240 400 640
1ry Facility Sales & Admin 25 25 75 150 250 400
2ry Facility Sales & Admin 15 15 45 90 150 240
Total Jobs 134 144 412 814 1,370 2,194
CAPEX Annual Investment (£000s) 2,000 4,000 4,000 78,000 160,000 242,000
UK Building Completions
Equivalent 1,500ft2 house (kg) 2,542 6,932 18,877 37,513 71,757 119,230
No. of UK Building Completions 177,347 180,759 184,236 187,780 191,393 195,075
% of UK Building Completions 1.4% 3.8% 10.2% 20.0% 37.5% 61.1%

Hectares Increase (Monthly) 3 "
Licenses (Cumulative) 20 "
Area Drilled / Licenses (Ha) 40 "
% Total Cereal Crop 3,347,000 Link Defra Statistics: Agricultural Facts England Page 7
Seed Propagation Area Required 80 Industry Consultations (Jamie Bartley of Unyte Hemp)
Average Biomass Yield (Tns per Ha) 6.0 "
Flower (Tns) 10% "
Fibre (Tns) 23% "
Shives (Tns) 45% "
110
Dust (Tns) 23% "
Pyrolysis Yield (Est. 20% Yield) 24.9% Industry Consultations (Jamie Bartley of Unyte Hemp)
Biochar Value per Ton £500 Industry Consultations (Jamie Bartley of Unyte Hemp)
Hemp Shiv : Binder 2.2 Link Hempire Calculator

Hemp Crete per Ton (£) 1,109 Link Hempire Calculator
HempCrete % Price Compression -10.2% Internal estimations
Hemp Market Share 2021 0.0% Internal estimations

Hemp Market Share Growth 0.7% Reaches 50% Market Share in 2027
Sales Tax (£000) 20.0% Link Based on UK VAT Rate
Processing Facility Metrics

# of Large 1ry Processing Facility (Tns/Hr) 12 Industry Consultations (Jamie Bartley of Unyte Hemp)
# of Small Biochar Facilities (Tns/Hr) 2 "
Large 1ry Processing Facility Direct Jobs 54 "
Large 2ry Processing Facility Direct Jobs 30 "
Total Direct & In-Direct Biochar Jobs (Each) 10 "
1ry Facility In-direct Jobs 25 "
2ry Facility In-direct Jobs 15 "
CAPEX Investment (£000s) £

Large 1ry Processing Facility CAPEX (£000s) 17,000 Industry Consultations (Jamie Bartley of Unyte Hemp)
Large 2ry Processing Facility CAPEX (£000s) 20,000 "
Small 1ry Processing Facility CAPEX (£000s) 2,000 "
UK Thermal Insulation Market CAGR % 2.5% Link AMA - Building Insulation Market Report Page 25
UK Thermal Insulation Market (£000s) 939,000 Link AMA - Building Insulation Market Report Page 25
Hemp Market Share 100.0% Industry Target
Equivalent 1,500ft2 house (kg) 6,329 Link Review of Hempcrete as a Sustainable Building Material Page 6
No. of UK Building Completions 174,000 Link AMA - Building Insulation Market Report Page 25
Jobs No. Source
Processing 2,190 Based on

Construction 10,000 industry
Retro-fitting 5,000 consultations
Total 21,620
Assumptions
July Monthly Exchange Rates - GBP:USD 1.2309 Link
July Monthly Exchange Rates - GBP:EUR 1.1616 Link
Notes
Construction and other textiles forecasts have been built using a bottom approach coupled with industry consultations similar to the Carbon Credit
calculation on A8.
Thermal Insulation market share has been calculated using a top down approach.
111
A7 - Animal Feed 2022E 2023E 2024E 2025E 2026E 2027E
UK Animal Fodder Production (£000s) 6,335,880 6,580,881 6,835,357 7,099,672 7,374,208 7,659,361
Feed Production Tons (000s)

Cattle 5,439 5,478 5,517 5,557 5,597 5,637
Pigs 2,371 2,401 2,432 2,462 2,494 2,526
Poultry 7,179 7,391 7,609 7,833 8,065 8,303
Others 1,489 1,489 1,488 1,487 1,486 1,486
Total 16,478 16,758 17,046 17,340 17,642 17,951
UK Hemp Feed Market Value (£000s) 0.00 0.00 0.01 0.01 0.02 0.04
% Hemp Feed Market Share Cumulative 2.5% 4.0% 5.5% 7.0% 8.5% 10.0%
UK Cattle Feed Market Hemp Share 52,283 86,048 121,689 159,272 198,865 240,538
UK Pigs Feed Market Hemp Share 22,790 37,714 53,628 70,575 88,603 107,758
UK Poultry Feed Market Hemp Share 69,008 116,091 167,814 224,509 286,529 354,251
UK Others Feed Market Hemp Share 14,316 23,382 32,814 42,621 52,810 63,389
Total UK Hemp Feed Market (£000s)) 158,397 263,235 375,945 496,977 626,808 765,936
Cattle 10,460 17,210 24,340 31,850 39,770 48,110

Pigs 4,560 7,540 10,730 14,120 17,720 21,550
Poultry 13,800 23,220 33,560 44,900 57,310 70,850
Others 2,860 4,680 6,560 8,520 10,560 12,680
Total Tax (£000) 31,680 52,650 75,190 99,390 125,360 153,190
Carbon Credit Value per category £000s

Dairy 4,812
Pigs 217
Poultry 347
Assumptions 2021 Link Source

CAGR 3.8% Link IBIS World
UK Animal Fodder Production (£000s) 6,100 Link IBIS World
Feed Production Tons (000s)

Cattle 5,400 Link FEFAC Statistics
Pigs 2,341 Link FEFAC Statistics
Poultry 6,973 Link FEFAC Statistics
Others 1,490 Link FEFAC Statistics
UK Hemp Feed Market Share %

Hemp Market Share 2021 1.0% Internal estimations
Hemp Market Share Growth 0.1% Reaches 10% Market Share in 2027
Potential GHG Reduction

Reduce dietary N and P - Dairy Tns CO2e 111,000 Link DEFRA - Agri Climate Report 2021
Reduce dietary N and P - Pigs Tns CO2e 5,000 Link DEFRA - Agri Climate Report 2021
Reduce dietary N and P - Poultry Tns CO2e 8,000 Link DEFRA - Agri Climate Report 2021
Sales Tax (£000) 20.0% Link Based on UK VAT Rate
Jobs No. Source

Manufacturing 4,000
Link IBIS World
Total 9,505
Notes
Animal feed market share has been calculated using a top down approach.
112
A8 - Carbon Credits 2022E 2023E 2024E 2025E 2026E 2027E

Seed Propagation Area Required 1,032 2,791 5,626 8,901 13,717 -

CO2 Sequestered Harvested (Above Ground)

Total CO2 Sequestered Harvested (Tns) 87,490 238,540 599,620 1,106,440 1,975,390 3,344,690
CO2 Credit £ per Ton 53 66 81 99 122 150
Carbon Credit Value - Harvested (£000s) 4,664 15,641 48,352 109,729 240,933 501,707
Total CO2 Sequestered In-Situ (Below Ground)

Total CO2 Sequestered In-Situ (Tns) 131,230 357,810 899,430 1,659,670 2,963,080 5,017,040
CO2 Credit £ per Ton 53 66 81 99 122 150
Carbon Credit Value - CO2 In-Situ (£000s) 6,996 23,461 72,529 164,594 361,399 752,561
Total CO2 Sequestered during cultivation (Tns) 218,720 596,350 1,499,050 2,766,110 4,938,470 8,361,730
CO2 Credit per Ton 53 66 81 99 122 150
Total Carbon Credit Value - CO2 (£000s) 11,661 39,101 120,881 274,323 602,331 1,254,267
CO2 sequestered during construction (Tns) 33,182 90,470 246,368 489,577 936,497 1,556,064
Total Carbon Credit Value - CO2 (£000s) 433 1,181 3,215 6,389 12,222 20,308
CO2 sequestered during cultivation tax £2,330 £7,820 £24,180 £54,860 £120,470 £250,850
CO2 sequestered during construction tax £90 £240 £640 £1,280 £2,440 £4,060
Total Tax (£000) £2,420 £8,060 £24,820 £56,140 £122,910 £254,920

Hectares Increase (Monthly) 3 Industry Consultations (Jamie Bartley of Unyte Hemp)
Licenses (Cumulative) 20 Industry Consultations (Jamie Bartley of Unyte Hemp)
Area Drilled / Licenses (Ha) 40 Industry Consultations (Jamie Bartley of Unyte Hemp)
% Total Cereal Crop 3,347,000 Link Defra Statistics: Agricultural Facts England Page 7
Seed Propagation Area Required 80.00 Industry Consultations (Jamie Bartley of Unyte Hemp)
CO2 Sequestered Harvested 40% Industry Consultations (Jamie Bartley of Unyte Hemp)
Total CO2 Sequestered In-Situ (Tns) 60% Industry Consultations (Jamie Bartley of Unyte Hemp)
Total CO2 Sequestered (Tns per HA) 36.70 Industry Consultations (GM)
% Price Growth 21% Internal estimations based on industry consultations
CO2 Credit per Ton £43.35 Link Unilever - Internal Carbon Pricing
New Build Home CO2e captured (Tons per Home) 13.1 Link Internal Calculations based on wall thickness of 300mm
Biochar CO2e captured per 1Tn dry Hemp (Tons) 0.658 Industry Consultations (Jamie Bartley of Unyte Hemp)
Jobs No. Source
Research & Development 2,300 Based on

Laboratory / Quality analysis 10,000 industry
Agronomists 12,570 consultations
Administrative 6,780 al 31,650
113
Notes
Carbon Credit forecasts have been built using a bottom approach using data obtained industry consultations. As the licencing regime open up
increased adoption is seen across the UK resulting increased hectarage of hemp under cultivation.
Using industry Carbon metrics the Carbon sequestered above ('harvested') and below ('in-situ') the ground using regenerative techniques can
be used to calculate the CO 2 e Carbon Credit based on Unilever's internal carbon pricing per ton.
114
Acknowledgements
115
The Secretariat Advisory Board (SAB) to the APPG on CBD
Products is a collection of the UK’s leading hemp and cannabis
trade bodies and groups.
The board’s role is to provide advice to the APPG Secretariat,
Tenacious Labs, on latest industry views, innovation and
research. The Secretariat works for the APPG at the direction
of the offices of the Chairman, Crispin Blunt MP and Co-chair
Baroness Manzoor CBE. It provides a singular voice for the
industry, and delivers research, reports and advice on industry
advances and funding for events.
SAB members include the Medical Cannabis Clinicians Society
(MCCS), Cannabis Industry Council (CIC), Cannabis Trades
Association (CTA), European Industrial Hemp Association
(EIHA) and British Hemp Alliance (BHA).
Nicholas Morland
CEO, Tenacious Labs
Co-Chair, Secretariat SAB
Nicholas is the co-founder and CEO of Tenacious Labs (TL),

an international consumer products group developing a new
wave of health and wellness brands, and a founding partner of
Delarki Investments. He currently heads the Secretariat
Advisory Board to the APPG on CBD Products and serves as
Chairman of the CSAB, the Jersey Cannabis industry body
advising the Jersey government.
TL serves as the Secretariat to the All-Party Parliamentary

Group for CBD Products.
116
The European Industrial Hemp Association (EIHA) represents
the common interests of hemp farmers, producers and traders
working with hemp fibres, shivs, seeds, leaves and
cannabinoids. Our main task is to serve, protect and represent
the hemp sector in the EU and international policymaking. EIHA
covers different areas for the application of hemp, namely its
use for construction materials, textiles, cosmetics, feed, food
and supplements.
Lorenza Romanese
Managing Director, EIHA
Based in EIHA’s Brussels office, Lorenza Romanese is an

experienced policy advisor and communication manager at the
European level. She has led EIHA’s efforts in Brussels since
February 2019, having worked with a number of MEPs to
propose reforms affecting hemp in the EU’s Common
Agriculture Policy. Lorenza previously advised interests in the
oil and gas sector and led the European Association of
independent Winegrowers.
Tony Reeves
Board Member, EIHA
Tony Reeves is a board member of the EIHA, a consultant to

several major North American and UK organisations including
THG. He is a member of the UKAS-led CBD Food Product
Approval Expert Group, the Food & Drink Federation’s (FDF)
CBD Working Group and holds an MBA from Warwick Business
School
Jade Proudman
UK Representative, EIHA
Founder, Savage Cabbage
Jade Proudman is a global advocate for hemp and cannabis

and the legitimisation of the industry in the UK. She holds a
master’s degree in education and is passionate about
promoting the social, environmental, economic and wellness
benefits that the hemp industry can provide. As an especially
well-known voice within the UK industry, she is regularly asked
to comment in the published and broadcast media. Jade is the
UK country representative for EIHA.
117
The Cannabis Industry Council (CIC) acts as a collective voice
for the medical cannabis and hemp sector, bringing together
organisations, businesses, and advocacy groups to promote
the cause for medicinal cannabis and hemp. Agreed on by a
members’ vote, the CIC’s objectives are to challenge current
guidelines on cannabis and hemp, to increase patient access
to medical cannabis, to commission and publish research
around cannabis and hemp and its access, and finally to
influence decision-makers to bring greater compliance and
regulation in the cannabis and hemp market. The CIC supports
all currently legal cannabis activities and is not currently
lobbying for adult / recreational cannabis use. It has only made
factual contributions to the information in this report.
Jamie Bartley
Executive Board Member, CIC
CEO, Unyte Capital
Jamie Bartley is a serial entrepreneur, working across multiple

industrial sectors, focused on the improvement of human and
planetary health. Jamie is CEO of the Unyte Capital group,
working across both the medical cannabis and industrial hemp
sectors. He sits on the executive board of the CIC and chairs
the industrial hemp subgroup.
Special thanks to Unyte and the CIC industrial hemp subgroup

for the industry data this business plan uses in its modelling.
The Medical Cannabis Clinicians Society (MCCS) is a group

which supports education in cannabis for all doctors and allied
professionals. It supports all current legal activities in the sector
but is not a lobby organisation and is not able to lobby for any
currently illegal cannabis activities. It has factually contributed
to the Medicinal Cannabis section of this report.
118
Professor Mike Barnes
Chair, CIC & MCCS
Professor Mike Barnes is a neurologist and has been working

in cannabis medicine for about 20 years. He was responsible
for the first cannabis prescription in 2018 and, after the law
change, set up the Medical Cannabis Clinicians Society and
remains chair of that Society. He also now chairs the CIC and
is a director of Maple Tree Medical Cannabis Consultancy and
Chief Medical Officer of Drug Science / T21 project.
Established in 2016, the Cannabis Trades Association (CTA)

formed to challenge and subsequently work with the MHRA in
relation to CBD products. The CTA is a not-for-profit company
whose key objective is to widen and open markets and ease
trading restrictions for our members in the UK, Europe and the
rest of the World. The CTA seeks to improve the business
environment, increase product quality, uphold consumer safety,
and create better environmental & production practises.
Marika Graham-Woods
Executive Director, CTA
Marika Graham-Woods’s background is in FMCG, heavy

industry, paper making, government and as an internet
entrepreneur and business angel. She has a Post-Grad DIP
CIM & MA in International Marketing. Marika joined the CTA in
2020 and became the Executive Director in late 2021.
Sian Phillips
Executive Director, CTA
Sian Phillips has been in the cannabis sector since 2015 and
joined the CTA in 2017 as a member. With a background in
communications, PR, media and events, she became a director
at the end of 2018. As of June 2020, she was voted in to lead
the CTA. Since late 2021, Sian has been working alongside
Marika Graham-Woods as Executive Director.
119
The British Hemp Alliance (BHA) was set up in 2019 as a
platform to lobby for political and industry change and to
remove barriers standing in the way of growth for the UK hemp
industry. It comprises businesses, farmers, NGO’s,
environmental organisations, and individual advocates that
support progressive changes in hemp legislation, stating that
an unrestricted and thriving hemp industry would deliver a
range of environmentally friendly and carbon negative products
that would actively contribute to mitigating climate change, and
kickstart a new green industrial revolution that would boost the
post-Brexit economy.
Rebekah Shaman
Managing Director, BHA
Rebekah Shaman is Managing Director of the BHA, working as

a changemaker and advocate for hemp to support mental and
environmental wellbeing. Rebekah educates on the importance
of hemp to reach net zero by 2050. Her work supports the
movement to reignite a plant-based economy, using hemp as a
carbon offset tool, and manufacturing it into biodegradable and
sustainable products, such as biochar and biofuels, to create
jobs and help ignite the circular and bio economy.
120
Mark Tucker
CEO, TTS Pharma
Mark Tucker’s extensive pharmaceutical experience includes

licensing the first nicotine patch technology to Novartis in 1989.
He worked with pre-eminent leaders of cannabinoid R&D that
published the 2004 pharmaceutical research Transdermal
Delivery of the Synthetic Cannabinoid. He is CEO of TTS
Pharma, which has 16 hemp-derived CBD novel food dossiers.
TTS also co-sponsors clinical studies under Home Office
licences and is working with Academia to generate the missing
evidence needed to support this fast-evolving sector.
Adrian Clarke
Chief Commercial Officer, Tenacious Labs
Adrian Clarke is the co-founder of TL and founding partner of

Delarki Investments. He is a serial entrepreneur and investor
specialising in the F&B and broader discretionary spend
sectors. Adrian has founded several companies including,
Mustard Venture Studio and Axia, and holds directorships in a
number of start-ups.
Jessica Billingsley
Chair, US Cannabis Council (USCC)
CEO, Akerna Corp.
Jessica Billingsley is Chair of the US Cannabis Council (USCC)

and CEO of cannabis tech business Akerna Corp. She is an
accomplished innovator, executive, and board member in
public and private international technology with more than 20
years of experience. At USCC, Jessica oversees the broadest
and most diverse collection of organisations, businesses, and
individuals ever to assemble to legalise cannabis in the United
States.
Shawn Hauser
Partner, Vicente Sederberg LLP
Shawn Hauser is a partner at Vicente Sederberg LLP, a US law

firm specialising in cannabis law and policy. Serving as the co-
chair of the Hemp & Cannabinoids Department, Shawn advises
businesses, state and federal government on cannabis and
hemp legislation. She is widely recognised as one of the top
cannabis and hemp lawyers in the United States.
121
Dan Houseago
Group Director, Economy, Department for the Economy,
Government of Jersey
Dan Houseago is the Group Director for Economy in the

Government of Jersey. He is the architect of the Economic
Development Framework for cannabis Investment in Jersey,
which established the Jersey Cannabis Agency and
precipitated a targeted amendment to the Proceeds of Crime
law, opening up Jersey to structuring and investment in
legalised cannabis ahead of other jurisdictions in the world. Dan
is the Chairman of the Jersey’s cross-government Cannabis
Coordination Group and provides support and advice to the
industry-led Jersey Cannabis Advisory Group (CSAB) and the
All-Party Parliamentary Group for CBD Products.
Andrew Livingston
Director of Economics & Research, Vicente Sederberg LLP
Andrew Livingston is based in Vicente Sederberg's Denver

office, where he serves a unique role as an economist,
business analyst, and general cannabis policy wonk. As the
firm's director of economics and research, he assists clients
with developing and expanding their enterprises across
cannabis markets nationally and internationally.
122
Andy Cutbill (co-author)
Head of Communications, Tenacious Labs
Andy Cutbill is Communications Director at TL and is

Secretariat coordinator for the Westminster All-Party
Parliamentary Group for CBD Products and Secretariat
Advisory Board. Previously Executive Creative Director at
Mustard Venture Studio, Andy was a key part of the operations
team originating the TL brand, and since then has focused on
the legislative, regulatory and investment elements of the
business. Andy has held senior and partner roles in various
international innovation and creative strategy agencies
including What If (now a part of Accenture), Albion, RGA and
AKQA. He has written TV series for the BBC and ITV, and
published books with HarperCollins with sales of more than a
million worldwide.
Reanata Legierska (co-author)

CSAB Member and Co-founder, Trinity Craft
Renata Legierska is a co-founder of Trinity Craft, a Jersey-

based licensed cannabis producer, and a member of the
Cannabis Services Advisory Board in Jersey. She joined the
cannabis sector in 2017 and worked in some of the UK’s first
cannabis companies engaged in medicinal production and
branded retail of CBD/wellness products. Over the past three
years she has overseen the successful licensing of two
cannabis facilities and established relationships with regulatory
agencies, pharmaceutical distributors, medical professionals
and patient organisations.
Charles Sampson (co-author)

Tenacious Labs
Charles Sampson is a Chartered Accountant with the Institute

for Chartered Accountants for England Wales (ICAEW). He has
been involved in the cannabis sector for four years across
several different jurisdictions. Most recently he has been
working for a Canadian family office helping them to deploy
strategic capital into the European medicinal cannabis space.
123

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A Plan for a Legal and Regulated

UK Hemp and Cannabis Sector

The report was researched and funded by Tenacious Laboratories Limited.

More details of the group can be found at parliament.uk

© All-Party Parliamentary Group for CBD (Cannabidiol) Products, 2022.

Crispin Blunt MP Baroness Manzoor CBE

5 Scotch Whisky Association

(5) Develops detailed implementation plans – Summer 2023.

Sector Department Gross Sales Tax Take Jobs

Medicinal Cannabis Home Office / MHRA £3,300,590 £755,840 81,570

Topicals Office for Product £23,950 £4,790 9,725

Ingestibles Food Standards £1,996,580 £399,320 29,175

Agriculture DEFRA £1,459,940 £292,000 42,930

Industrial DEFRA / BEIS £1,608,730 £321,750 21,620

Animal Feed DEFRA £765,940 £153,190 9,510

Carbon Credits DEFRA / BEIS £1,285,340 £254,920 31,650

Adult-Use Cabinet Office £21,802,090 £3,308,940 368,000

Total £32,243,160 £5,490,750 594,180

Topic Application Department Tax Take (£000s) Jobs

Medicinal Cannabis Oil MHRA £170,660 31,370

Medicinal Cannabis Flower MHRA £585,180 50,200

Total £755,840 81,570

1. Home Secretary 1. Amend wording in paragraph 4 of The

1. Medicines and Healthcare products 1. Commission a re-assessment of NICE

1. Independent Assessor 1. Conduct or contract for a proper and

Topicals Creams OPSS/TS £2,630 5,350

Topicals Balms OPSS/TS £1,200 2,430

Topicals Lotions OPSS/TS £720 1,460

Topicals Pet lotions VMD/TS £240 485

Total £4,790 9,725

Topic Application Department Tax Take (£000s) Jobs

Ingestibles Vapes FDA/TS £232,400 12,000

Ingestibles Beverages FDA/TS £140,140 6,675

Ingestibles Capsules FDA/TS £12,000 3,750

Ingestibles Tinctures & Oils FDA/TS £9,950 3,750

Ingestibles Gummies FDA/TS £4,830 3,000

Total £399,320 29,175

1. Advisory Committee on Novel Foods 1. Commission a review to provide clear

1. Advisory Committee on the 1. Set commercially viable THC limits in legal

1. Advisory Committee on the 1. Introduce and enforce a harmonised

1. Advisory Committee on the 1. Make CoA, CoO and full traceability

1. Advisory Committee on Novel 1. Set clear product definitions based on

Agriculture Hemp flower DEFRA £51,650

Agriculture Hemp fibre DEFRA £31,260 32,930

Agriculture Hemp shives DEFRA £48,100

Agriculture Hemp oil DEFRA £71,130

Agriculture Hemp protein powder DEFRA £34,700 10,000

Agriculture Hemp dehulled seed DEFRA £55,160

Total £292,000 42,930

Topic Application Department Tax Take (£000s) Jobs

Industrial Hempcrete DEFRA / BEIS

Industrial Hemp insulation DEFRA / BEIS £108,850 9,430

Industrial Biochar DEFRA / BEIS £9,400 2,190

Total £321,750 21,620

Topic Application Department Tax Take (£000s) Jobs

Animal Feed Cattle feed DEFRA £48,110

Animal Feed Pigs feed DEFRA £21,550

Animal Feed Other feed DEFRA £12,680

Total £153,190 9,510