Johnny Green: Softening The Brexit Blow

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From top: A GW Pharma Indoor growhouse; Johnny Green

This week we are going take a look at the UK. and GW Pharma, whose controversial chairman is Geoffrey Guy, we will start with a few highlights from an interview Guy did with Pharma Board Room.

‘Through being part of the EU, the UK with all its capabilities, is tied down by Brussels. As long as it can break free, the UK faces a couple of decades of unbridled prosperity.

As a nation the UK is very industrious and very pragmatic; we can deal with change far better than most of the large European countries who are restricted by their institutional approach.’

GW Pharma in other news announced the cancellation of its London market listing, yet retaining its Nasdaq listing in order to ‘simplify trading and cut expenses of dual listing’.

They have opened offices in California, relocating Justin Gover the CEO since its founding to run the company from its US Headquarters, most recent capital has been all raised in the US.

To use a quote from Guy’s rather bullish Brexit interview, are GW Pharma simply maneuvering according to circumstances, or are they effectively a US company?

It is widely believed that GW Pharma will be receiving an import license for Ireland.

One of the reasons – besides some great products  – is the presence of Tom Lynch of Elan fame on its board.

Tom is somewhat infamous for his involvement with Tony O’Brien from the HSE, it was a Lynch vehicle Evofem that O’Brien became a director of while still director general of the HSE .

GW is probably best know for the involvement of Capital Group where Philip May is a relationship manager, they currently own about 25% the shares, this has resulted in accusations of hypocrisy regarding stalled government legislation for medical cannabis.

The grower for GW Pharma is British Sugar, where Victoria Atkins‘ husband is managing director, further feeding rumors and conspiracy theories.

It’s also indicative of the size and potential in this space, the EU market has been estimated at 50 Billion medical by 2028 and 100 Billion full legislation.

Last week in a joint statement from London and Carlsband, California GW Pharma announced that CHMP has recommended approval of Epidiolex, CHMP prepares the European Medicines Agency (EMA)’s opinions on questions relating to the marketing of human medicines.

The FDA had approved Epidiolex in June 2018, it is expected the European Commission will now approve  for the first time, a plant derived cannabis medicine in its centralised procedure for approving medicines.

Late in 2018, the European Commission started a harmonising process on the legal framework for medical cannabis in all member states, it’s non binding but is a great first step.

The legal framework is currently different in each member state, further steps in this direction will benefit patients and the industry.

In the event of a hard Brexit, the current GMP certification by the certificating body in the UK for example may not be recognised in other member states, most of the recent activity in the UK cannabis space may simply end up for the domestic market.I n the US there is also currently no interstate commerce in cannabis, hemp yes.

In my opinion there is a strong probability that the UK to offset the shock of a hard Brexit, legalises both medical and recreational cannabis within 3-5 years.

GW Pharma will pivot its UK business to domestic, it’s effectively a US company now and that’s where it will be focusing its rapidly depleting cash and resources, burn baby burn.

For a good description of GW Pharma and its quite excellent products including Sativex, here is a investor presentation from May. The business plan is to dominate the children’s medical cannabis space, then tackle the elderly demographic with specifically developed medical cannabis products.

So in summary, it’s highly unlikely there will be any inward investment in the UK cannabis space except for domestic, GW Pharma is for all intent and purposes looking to the US and if it continues develop world class drugs, should be just fine.

The conversion by British Sugar of tomato greenhouses into large scale cannabis grows is quaint and has a can do, Dad’s Army vibe to it. The reality is converting large scale older tomato greenhouses into state of-the-art medical grade growing operations is extremely challenging.

With a hard Brexit,there are simply too many more attractive locations in Europe for major international companies to locate growing, extraction facilities. Tilray  who recently exported some oil to the UK had chosen Portugal, Canopy Spain, Aurora Germany.

Ireland has been unable to develop any coherent strategy or plan for patients or international cannabis companies, who are actively locating multi million operations in other EU countries.

FG and the minister are on track to blow a once in a lifetime opportunity to position Ireland as a leader in a fast growing,job creating capital intense green industry, with a potential 100 Billion market and the UK. on its knees.

From the patients perspective, a recent House Commons report summarized it well.

‘The plight of children affected by intractable epilepsy and the efforts of the families of Alfie Dingley and Billy Caldwell to access to medicinal cannabis led to a change in Government policy.

In November 2018 medicinal cannabis was changed from Schedule 1 to Schedule 2 of the Misuse of Drugs Regulation 2001, allowing specialist doctors to prescribe it and for products to be available for further research to be conducted.

This rescheduling was widely welcomed but there was a failure to communicate what this would mean in practice for the availability of medicinal cannabis.

Expectations were raised that these products would become widely available and there needs to be far clearer communication that this is not the case.Very few prescriptions have been issued for medicinal cannabis since the rescheduling…

The Roll Up column by Johnny Green will attempt to keep Broadsheet readers up-to-date on the growing cannabis industry worldwide. Follow Johnny Green on twitter for even more updates.

20 thoughts on “Johnny Green: Softening The Brexit Blow

  1. eoin

    Thanks Johnny, great column again which informs and challenges. When you referred to “Victoria Adams”, I was thinking “Posh Spice” and David Beckham. The truth is more mundane.

    “Victoria Adams MP, the current junior Home Office minister responsible for drugs policy whose husband, Paul Kenward, MD of British Sugar, grows 45 acres of medicinal cannabis under contract to GW Pharma”

    1. Johnny Green

      Hi Eoin,apologies for any confusion but in reality its simply a tired old retrofitted tomato greenhouse that the UK has bigged up into some state art growing op-the reality is the weed is really low grade and gets ‘pressed’ or extracted for its oil which is then used by GW.The media would have you believe the UK has some early mover advantage in having an old tomato greenhouse growing weed-you can pick them up for free almost.
      No serous medical cannabis company would grow medical grade cannabis in old tomato greenhouses, its all so Best of Britain/Dunkirk nonsense and oh look at us adapting…
      They have 3 more similar sized ones ready to convert as their sugar business is about get funky:)

      Presentation they made on Brexit-

      “The UK is already a net importer of sugar. Currently the UK market is approximately 2 million tonnes of demand. The British beet sugar industry produces about half the requirements of the UK sugar market, with the balance provided roughly equally by imports from third countries (cane) and from the EU (beet).”

      http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/environment-food-and-rural-affairs-committee/postbrexit-trade-in-sugar/written/78695.pdf

    1. Johnny Green

      I lashed that in for you Cian-its on the HIGH side:)
      Was unhappy with the estimates for size of British market they ranged from 5-15 Billion combined, with sources all over the map.This is probably the most widely used number its an estimated saving/gain to the Treasury of 1 Billion,this is driving the debate on legislation, again its a problematic number.

      ” When these savings are added to excise tax revenues of £690 million plus new streams of income tax, business tax and VAT created by the legal industry, claims about cannabis legalisation providing a £1 billion windfall to the Treasury seem pessimistic. It is likely that tax revenues alone would exceed this.”

      https://www.wired-gov.net/wg/news.nsf/articles/Estimating+the+size+and+potential+of+the+UK+Cannabis+Market+29062018121000?open

  2. phil

    informative thanks , of to research doing a horticultural course now …. I wish someone would tell REDACTED about this potential greenrush, it might move things along

    1. Johnny Green

      oh Malta which is next week is absolutely killing it in this space, they are leaving Ireland in the dirt, best luck with the course and if you are looking for an internship (cheap labour) I can hook you up but definitely watch Murder Mountain on Netflix for a taste of life as a trimmer/picker in Cali:)
      https://www.netflix.com/title/80217475

  3. Charger Salmons

    Breaking Bad Boy of Brexit Arron Banks has moved into the cannabis oil business with a £4million investment in Iofina.
    Smart cookie.
    Especially now the Russian connections have dried up ….

    1. Johnny Green

      You may like this its a BBC doc on Canada’s journey to legalize weed, the BBC accompanied 3 MP’s on a fact finding trip-Sir Norman Lamb and David Lammy joined Mr Djanogly,it just came out today.

      “Canada’s legalised it, so three British MPs go on a weed trip to see if the UK could do the same. Being the first major Western country to go fully legal, Newsbeat ask – has it worked?”

      https://www.youtube.com/watch?v=kSkMdaQQNcU

      Ps-Arron invested in a iodine company:)

  4. Mé Féin

    “…a fast growing,job creating capital intense green industry…” I presume you mean green as in the colour of the plant because indoor cannabis cultivation is water and energy intense. The plants are also sprayed with pesticides and herbicides so smoking that residue can be harmful if not cleaned off properly.

    1. Johnny Green

      Hi Me Féin,quite a studies were done 5 years after in Colorado,lessons were learned and mistakes corrected.When Colorado legalized Recreational there were no restrictions on power usage,so the growers hooked up and ended up using 3% from the grid and causing chaos.When Massachusetts passed recreational,it limited the voltage of the lights growers can use,effectively nudging growers off the grid.You can still grow using the grid in Mass,but most serious growers don’t,they use a combination of solar,hydro,co-gen,bio-mass.So the regulators can with smart legislation direct the growers to use ‘green energy’.
      Most growers use close loop water systems with ‘grey water’ tanks,which are extremely effective and don’t forget you pay for water in most countries except Ireland:)
      If Ireland created an independent cannabis commission it has lots examples of effective green regulations/laws addressing your issues to learn from and adapt,Ireland could nudge growers to use ‘green energy’ and efficient water treatment in its regulations,growers will comply and adapt.
      Weed is lab tested and the use of pesticides/herbicides can also be regulated/discouraged/banned,it really is up to the govt/legislation but no growers are using harmful chemicals,in the black market yes not in the regulated ones.

  5. V

    Of all the articles in Johnny G’s series to date

    This best proves his point that the Paddys are letting this slip by

    If were no interest to Aurora, Tilray, Canopy and the likes
    What the jaysus is stopping us getting it out of the groud ourselves

    And since I’m full of the Cooperative Rum n’ Spirit this week
    What’s stopping is from putting one together anyway

    COOPabis
    Happy to advise

  6. Clampers Outside!

    a “joint statement” ahahahaha… ah stop!

    *exhales*

    I’ll get me coat… but before I go, great piece Johnny. I’m genuinely livid at our government for not moving on this.
    Keep the info coming, please, and thank you.

  7. Ron

    Great article. But dont assume that it will rely on the actual growth of the natural plant in the future. Big Pharma are already making moves to monopolise this naturally occurring drug for profit.

    A few days ago there was a not widely reported scientific announcement. Basically they have discovered how to synthesize in a lab the effects of cannibas which can be made in a pill format.

    The team, based at the University of Guelph, used a combination of genomics and biochemistry to work out how the cannabis plant makes cannflavin A and cannflavin B, two molecules that are 30 times better at quelling inflammation than aspirin.

    Their findings are published in the journal Phytochemistry.

    https://www.sciencedirect.com/science/article/pii/S0031942218303819?via%3Dihub

  8. some old quare

    Great piece Johnny- Theresa May’s husband owns or at least did own a 22% share in GW of course.

    I have a somewhere off topic question- about recreational use. Back in the day, when someone was smoking weed there was a non offensive near sweet smell of it but now- it seems to have a pungent almost rancid stink which can linger in a room for days and sticks to your clothes.

    Why is that? Is it because of different strains or just the way in which it is grown?

      1. some old quare

        Nope not smoking it just commenting on how the smell has changed is all. In fact I’d go as far as to say its not so much a smell any more as a stench.

        All it does for me is make me want to sleep but- each to their own

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