Just a decade ago, the thought of six million users of legal cannabis products in the UK would have been inconceivable. And yet, flying completely in the face of the stigmas associated with cannabis users, the market for CBD products has expanded so much that revenues dwarf both Vitamin C & D sales combined. How’s that for a changing of the guard?
In spite of recent moves to erect barriers to entry to the market through the Novel Foods Act, the CBD economy is projected to pull in £690m this year as consumers look to improve their mental and physical health following the COVID19 pandemic. On the flip side, an emerging market such as CBD makes itself the perfect target for UK Government who will be reeling from the downturn in tax income over the last 18 months.
As we have seen in the American cannabis market, the upside for taxation is extremely lucrative. In Illinois, state & sales taxes add a further 41.5% to the purchase price of your medicinal cannabis products, pushing the cost of 1/8th of flower to just shy of $100 (vs. $60 street value). This clearly hasn’t deterred customers, as the state have declared over $1bn in recreational revenues in the 18 months since legalisation.
Here in the UK, the CBD market is projected to turn over £1bn/year by 2025 (£200m in VAT) - a figure we expect to be easily exceeded. In March of this year, a £303bn provisional fiscal debt was announced by the Chancellor, with the true effects of the government’s £370bn+ COVID spending yet to be felt.
Here lies the case for the legalisation of medical marijuana in the UK. Weed is the most popular recreational drug amongst adults behind alcohol, caffeine & nicotine, and policing usage has fell to the wayside with prosecutions falling year on year as officers admit they no longer have the resources to criminalise users.
Health Poverty Action published a report in 2018 which explained that the UK could generate an estimated £1bn - £3.5bn annually through legalisation (this figure does not account for the reduction in cost of imprisonment for cannabis offenders to the UK taxpayer). The idea is that revenues would go towards health & harm reduction, whilst also easing the strain on mental health services.
The UK is the world's leading exporter of cannabis, yet continues to deny the medicinal value of the drug. It is sickening that this position is taken by the government as citizens sit in jail for the very activity they are profiteering off on an industrial scale.
All in all, we believe that CBD products are the catalyst for a huge movement towards the adoption of medical cannabis in the UK. After Canada became the first G7 country to legalise weed, legislation feels like a matter of when, not if for UK lawmakers.