Wednesday 17th October 2018 – Canada has just legalised the recreational use of marijuana/cannabis. It is the second country to do so after Uruguay, but is the most significant from a political and economic stand point. Also nine states in the United States and the District of Columbia now allow recreational marijuana/cannabis use. Medical marijuana is legal in some form in 30 US states.
The cannabis industry was worth an estimate $4 billion dollars in Canada, and took around $9 billion in 2017 in the US.
World governments are acutely aware of the finances that will be raised from taxes raised by this growing industry and the duties that will be undoubtedly be imposed on cannabis. This coupled by their desire to reduce drug related crime and ever mounting public pressure, means that we can expect a tidal wave of countries legalising and regulating the recreational use of marijuana in the foreseeable future.
Some commentators predict countries will be going full throttle to pass this legislation as soon as possible. These countries will not want to give too much of a competitive advantage away to early adopters such as Canada.
We wouldn’t be surprised if the legislation is changed in the UK sooner than expected. It might provide the smoke screen that the government needs to draw the public’s attention away from the Brexit fiasco.
Following legalisation on cannabis in the UK, there will be an explosion of companies entering this fledgling market, as such, we will see significant R&D in all manner of cannabis related products.
We have seen hemp and hemp related products become more popular in in recent years. Hemp is a strain of cannabis which has been bred to have none of the narcotic Tetrahydrocannabinol (THC) compounds & effects. Hemp is used to produce food (seeds, oil, protein powder), fibre for clothing, medicine, fuel, paper, textiles & even a building material (hempcrete).
Cannabis oil for example has been found to have medical benefits such as reducing anxiety, promoting cardiovascular health, relieving pain, inflammation and nausea, treating seizures, fighting IBS symptoms and having an anti-tumour effect.
However, the stigma attached to cannabis has unfairly hit the growth of the hemp industry. Legalisation of cannabis will obviously bolster this industry too and we will see even more R&D undertaken in this area too.
We anticipate that innovation reliefs such as R&D tax credits and Patent Box, will inject additional cash or tax savings into this fledgling industry, accelerating both its R&D and hence growth. Our technical consultants cover the larger number industries that cannabis and cannabis related products will be applicable to; and are therefore well placed to service client in the wider banner of the ‘cannabis’ industry.