How Britain became the world’s largest exporter of medical marijuana

How Britain became a world leader in producing legal marijuana

12 January 2019 9:00 AM

If you were looking for an international drugs empire, Downham Market would not be the first place you’d think of. With a population of around 10,000, this sleepy Fenland town is probably about as typical as they come — typical, that is, apart from the smell.

It was around two years ago that residents first noticed it: a distinctive pungent scent which seemed to hang on the wind before eventually engulfing the town for several days. Now locals say the gusts come and go. But when the odour first appeared, it was so strong that at least one resident phoned the police to complain about feeling nauseous.

It turned out that the smell was coming from an 18-hectare cannabis plantation housed in some nearby industrial greenhouses. But this was no black market operation: the premises were owned by British Sugar and the cannabis was being grown under licence from the Home Office. Nor was it a small gig: experts say that the Downham Market operation (which continues to this day) probably produces more than 90 tonnes of legal cannabis each year.

Of course, cannabis remains a strictly prohibited substance in Britain, having been upgraded to a class B drug (with possession punishable by five years in prison) by the last Labour government. How, then, is a FTSE 100 company involved in harvesting gargantuan amounts of cannabis in the middle of East Anglia?

The truth is that Britain has a thriving ‘legal’ cannabis industry, which exists alongside the black market. It uses Home Office permissions, as well as some legal loopholes, to generate hundreds of millions of pounds in revenue each year — with full support from the British government, which takes a cut from the proceeds. Last year, a UN report revealed that the success of this venture had made Britain the biggest producer and exporter of legal cannabis in the world.

So when did it all begin? In 1998 a British biotech company called GW Pharmaceuticals was approved by the Home Office to conduct clinical trials on using weed to help patients living with the most serious types of Multiple Sclerosis. For the first time, the British press began to talk about so-called ‘medical marijuana’.

In the 20 years since then, GW Pharmaceuticals has developed two of the world’s most successful cannabis-based drugs, including Epidiolex — the first of its kind to win FDA-approval in the US (sending GW’s shares into orbit in the process). Its current valuation is more than £3 billion. Good news for its largest shareholder, Capital Group, a US-based investment house which also employs Philip May, the Prime Minister’s husband, at its plush London offices.


In 2016, following exponential growth of the medical marijuana industry in the United States, the Home Office approved a deal to allow GW Pharmaceuticals to expand its cannabis empire using British Sugar’s greenhouse facilities. So the government was encouraging medical cannabis, but still banning it. This embarrassing situation was highlighted in an unexpected way a year ago when the government appointed a new drugs minister, Victoria Atkins, who, as eagle-eyed bloggers pointed out, is married to the managing director of British Sugar. Red-faced, the minister formally excused herself from answering any questions on marijuana policy.

For supporters of medical marijuana, this was galling given the Home Office’s historic track record in blocking UK patients with chronic conditions from accessing cannabis–based medicines, usually on the basis that marijuana had no medical value whatsoever. Now here was a drugs minister whose husband was involved in the production of medical marijuana.

These contradictions are growing harder for the government to ignore. Six months ago the mother of Billy Caldwell, a severely epileptic boy from Northern Ireland, returned from America bringing cannabis oils for his treatment. The police set out to arrest her at the airport, and had to be stopped by Sajid Javid, the Home Secretary, who could imagine the headlines.

Although the oil is legal in 30 countries, Home Office officials wanted to impound the supply. At one point, a customs official was sent to the hospital to guard the oil against theft. It was a farce that demonstrated the law needed to change. Marijuana usage is now allowed in rare cases where authorities are satisfied there is an ‘unmet special clinical need’. Despite this, there are no plans to make medicines like Epidiolex, the patented drug which makes millions for GW Pharmaceuticals, available in Britain.

GW Pharmaceuticals and its shareholders aren’t the only ones making money from inconsistencies in the UK’s cannabis laws. In the investment houses of Mayfair, bullish analysts speak of the ‘green rush’ and of ‘Big Marijuana’. One industry research group, Prohibition Partners, has estimated that a British medical marijuana market would be worth £8 billion a year. Blue-chip investors, having already cashed in on developments in America, are understandably excited.

It’s not just medical marijuana which is on the rise in Britain: a range of new lifestyle products, freely available in high street shops and supermarkets, are quickly building a new consumer industry for so-called ‘legal cannabis’. These products claim to use non–intoxicating CBD oils, with only small traces of THC (the part of the plant that gets you high), to help ease various physical and mental ailments.

It’s still illegal for any kind of medicinal claims to be made for CBD in Britain, but its devotees say it can play a big role in reducing pain, lowering blood pressure and relieving symptoms of depression and insomnia. Typically, it is distilled into tonic drinks, supplement pills or edible oils which can be marketed to fashionable millennials and the health-conscious middle-aged.

In the US, where the industry has evolved alongside recreational marijuana, sales of these products are expected to be worth some $2 billion within four years. It’s even possible to buy CBD supplements for elderly and arthritic dogs.

As by-products of the cannabis plant, though, such supplements are still illegal to manufacture in Britain: it’s only EU laws which mean that imported CBD products can be sold here without any kind of licence. It’s not the only instance of people taking advantage of confusion in EU laws about cannabis. In July last year, it was discovered that online retailers based in Switzerland had produced a low-strength cannabis which they were claiming could be sold legally under European law. It’s not true (their weed is just a bit weaker than normal black market stuff), but their produce can still be bought online and shipped to the UK.

Added together, medical marijuana and CBD represent a rapidly changing industry, already worth some hundreds of millions of pounds each year. More importantly, they show a growing acceptance of cannabis among Britain’s political and business establishments — and this is making investors very excited. After all, since Britain has emerged as a world leader (an accidental one at that) in this field, could manufacturing medical marijuana be our next boom industry — both at home and abroad?

A useful first step would be a change in the law about the use of such medicines here, which would allow a lucrative home market for UK-patented drugs such as Epidiolex to open up. Allowing biotech start-ups to develop the next generation of marijuana meds would break the effective monopoly enjoyed by GW Pharmaceuticals.

And what about the ultimate hippy pipe-dream: the legalisation of recreational cannabis in Britain? Thanks no doubt to developments in the US and Canada, the issue has enjoyed some momentum in recent years. Politicians ranging from Nigel Farage to Sir John Major have suggested it’s time to revisit Britain’s harsh drug laws, with many stressing the tax benefits and the opportunity to take soft drugs out of the sphere of violent gangs. The Canadian system, which allows state-regulated recreational weed for over-18s, is seen as a potential model for this.

Walking back across town, it seems I’ve arrived on the wrong day to catch a whiff of the famous Downham Market fog. Never mind that, though: there’s no denying that what’s happening here could have huge repercussions for Britain’s future.