How would the industry fare if the UK legalized cannabis?

Former British Deputy Prime Minister Nick Clegg has stated that legalizing cannabis in the United Kingdom could improve public health. He warns of the «risks of unrestricted commercialization of the product,» thereby highlighting the tension between economic interests and public health concerns.

According to the Crime Survey, According to a British study conducted in 2015 and 2016 in England and Wales, there are approximately 2.1 million cannabis users. However, the survey notes that this figure is likely an underestimate, as the British public remains reluctant to disclose their illegal activities. The survey also does not specify whether the respondents are occasional or regular users.

The The British Liberal Democratic Party had confirmed During the general election campaign, they had stated that they intended to legalize cannabis if elected. That did not happen; the Conservatives won by a wide margin in the election held on Thursday, June 8. Furthermore, the LibDems had also stated that a possible legalization of cannabis wouldwould increase tax revenue by one billion pounds. This figure is still fairly approximate, but it is based on the number of consumers in the region, the amount of cannabis consumed, and the taxes that would be added to the product if it were legalized. 

Will British companies be able to benefit from a possible legalization?

In fact, if companies want to enter the cannabis business in the future, there will be a demand for producers, distributors, scientists, and doctors—a team necessary for the smooth operation of cannabis cultivation and sales.

George McBride is the editor of a British magazine VolteFace. It is a center for policy innovation that explores alternatives to current public policies on drugs.

He told the British daily The Independent : «Although large companies that sell state-of-the-art production machinery are best positioned to benefit from potential legalization in the United Kingdom, opportunities for startups that provide software—such as crop data tracking—would also be profitable for them.».

The American Model

In the United States, cannabis remains illegal at the federal level. However, small startups have flourished thanks to cannabis, tailoring their products to their local markets before expanding from one state to another. Furthermore, the cannabis industry is largely unregulated and operates on the free market.

Based on the example of Colorado, a U.S. state that legalized recreational cannabis last November, data from the Colorado Department of Revenue shows that combined sales of medical and recreational cannabis reached $1.3 billion in 2016.

The United Kingdom has a population of 65.14 million (which is roughly equivalent to the population of France). If this figure were extrapolated to the UK population over the course of a year, it would represent an additional 2.3 billion pounds in government revenue.

A panel of experts on the subject, endorsed by the Liberal Democrats, has made it clear that their primary concern is public health and consumer safety. Tax revenue and jobs come second. Their only concern would be a rise in the price of cannabis if it were to be legalized. The experts believe that the black market would not disappear if it were competitive. Currently, the price of cannabis on the black market in the United Kingdom is estimated at £20 for 1.6 grams.

If the British government legalizes cannabis, it will do so as follows: price controls, tax policy, the issuance of cannabis production licenses for future dispensaries, and regulations governing cannabis sellers. At the same time, The United Kingdom is set to launch its own research institution medical cannabis this summer.

Mehdi Bautier