The global cannabis industry is frequently characterised as a "booming market", much to the frustration of many British businesses, which feel a lack of clear domestic regulation puts them at a disadvantage when it comes to harnessing burgeoning interest in the plant's potential applications.
While recreational cannabis remains illegal in the UK, cannabis and cannabis-derived products are authorised to varying degrees for use as medicines, pharmaceuticals and consumer products.
Critics say the lack of firm rules about how cannabis-based products are made and marketed is deterring investment in the sector.
This, they say, is evidenced by the fact that most British businesses innovating in the cannabis industry are small-to-medium sized companies, while big global brands wait on the sidelines.
While this creates opportunities for smaller companies to seize market share and/or make themselves attractive acquisition targets further down the line, many fear the UK will miss its chance to become a meaningful player in what is already a lucrative international market.
Cannabidiol (CBD), an active but non-psychoactive ingredient derived from hemp and typically sold as CBD oil, has, since January 2019, been classed as a "novel food" by the European Commission.
Although not legally binding, the EC's Novel Food Catalogue is used as a reference by many authorities in the EU to comply with the Novel Food Regulation ((EU) 2015/2283).
Authorities can refuse to permit supply of foods and food supplements containing CBD, pending formal approval by the European Food Standards Agency (EFSA) under the Regulation.
Securing a licence for a novel food requires the provision of prescribed evidence of its safety for human consumption.
The industry is still waiting for EFSA to make a decision, which had been expected in summer 2019, on the first application by a CBD food manufacturer for its product to be approved as a novel food.
The indeterminate status of CBD in the UK and the EU has allowed a rift to open up within the sector.
On one side, the European Industrial Hemp Association (EIHA), the body that represents the interests of farmers and processers of non-controlled hemp products in Europe, rejects the novel classification.
It argues that hemp has a long history of legal consumption and that the catalogue entry was made without sufficient industry consultation, and is therefore opposed to the imposition of tighter regulation.
On the other side, the UK's Centre for Medicinal Cannabis (CMC) insists that CBD products are novel and is pushing for minimum quality standards and the requirement for marketing authorisation.
The CMC's approach is partly motivated by its own research, published in June 2019, which tested 29 CBD oils available to UK consumers and found that nearly two thirds of them contained less than 90% of the declared CBD content, while one product contained no CBD at all.
Similar investigations by Which? magazine have reported similar variations and inconsistencies.
Until there is a decision from EFSA on the novel status of CBD accompanied by enforceable product standards, quality issues are likely to persist.
Medicinal and medical cannabis
For medicinal and medical cannabis products, different rules exist depending on which part of the cannabis plant a product is derived from, how potent it is and what condition it is intended to treat.
Medicinal cannabis (or CBPM, referring to "cannabis-based products for medicinal use in humans") products are generally derived from the flower of the cannabis plant and are currently largely unlicensed medicines in the UK.
Nabilone, a synthetic cannabinoid, is licensed for use with some patients with chemotherapy-induced nausea and Nabiximols (Sativex) is licensed for multiple sclerosis (MS) related muscle spasticity. Epidiolex (for epilepsy) is in the process of being authorised.
Products made from the cannabis flower contain tetrahydrocannabinol (THC), the psychoactive cannabinoid that gets recreational users "high", and are tightly controlled.
Specialist doctors can only prescribe CBPM if a patient has a "special" need that cannot be met by licensed medicines.
There are however some licensed cannabis-based medicines that have been through the same approvals process as any other medicine, but are derived from some part of the cannabis plant other than the flower.
A very small number of companies hold a Home Office Licence to grow cannabis plants in the UK, but even these licensees are not legally permitted to harvest the flowers from which CBPM are produced (meaning the crops have to be carefully separated and the flowers turned back into the soil).
The UK is not alone in Europe in banning the harvest of cannabis flowers, but the practice is permitted in other parts of the world (including, recently, in the Channel Islands) and licences can be obtained to import the flowers for certain authorised purposes.
Anecdotal evidence indicates a great deal of frustration among companies attempting to use the Home Office drug licensing process, which is not designed to cope with the level of commercial interest cannabis has attracted in the past five years.
Criticism has centred on the sluggishness of process, a lack of transparency into how decisions are made and the difficulty of meeting some of the requirements, such as having an offtaker for the product before the applicant has a licence to produce it.
The need for cooperation between the Home Office, which is concerned with policing legal cannabis cultivation and imports, and the Medicines and Healthcare products Regulatory Agency (MHRA), which is responsible for approving cannabis-based medicines, is also proving problematic.
What's next for the UK cannabis market?
Although frustration with the UK's (and EU's) current regulatory position on cannabis continues to mount, more information is becoming available and regulators are slowly manoeuvring into a position to make informed decisions.
As things stand, industry consensus appears to be that restrictions on medical and medicinal cannabis use will ease as more companies progress through the relevant approvals processes, while rules on CBD are likely to tighten with the imposition of stricter quality standards.
A frequently repeated argument is that Her Majesty's Revenue and Customs (HMRC) will eventually succumb to the lure of the significant tax receipts the cannabis industry is expected to generate, which will ultimately incentivise the establishment of a proper regulatory and fiscal framework.
Assuming this is the case, practical issues that need to be addressed for the industry to flourish include agreeing a methodology for testing products, developing a functioning logistical set-up for laboratory tests to be carried out efficiently and cost-effectively, and a the implementation of a "Kitemark"-style system that consumers can understand and have confidence in.