I love bringing politicians into our labs,â€ť says Chris Driessen, president of Organa Brands, North Americaâ€™s leading legal distributor of cannabis. â€śIt blows their minds when they see whatâ€™s behind the door. Itâ€™s not a ragtag bunch of stoners trying to figure out a business in a smoky room. These are people with advanced degrees, highly skilled professionals who have already been really successful in business. Our office looks more like Google than a drug den.â€ť
Since American states began cannabis legalisation â€“ especially for recreational use, starting in 2012 â€“ the industry has been threatening to rival traditional big businesses. Leading the charge are shrewd, savvy operators touting joints, vapes, drinks, gummies and sprays. In the US, the industry counted $9 billion (ÂŁ6.8bn) in sales last year, with 2018 predicted to see $12b (ÂŁ9bn); by 2030, this is projected to reach $75b (ÂŁ57bn), higher than last yearâ€™s wine revenue. Companies are racing to become national brands, from humble start-ups to mega-monied playboys such as Dan Bilzerian, who announced that he wants his upcoming brand â€śto be the Coca-Cola of the weed industryâ€ť.
In the UK, meanwhile, home secretary Sajid Javid recently announced that medicinal cannabis products will be legalised (albeit only for patients with â€śexceptional clinical needâ€ť). Itâ€™s been a long time coming. More than 40 countries now boast either unenforced laws or some degree of decriminalisation and Canada just became the first G7 country to go fully legal, medically and recreationally. Until this year, cannabis was a Schedule 1 drug in Britain, meaning it had â€śno therapeutic valueâ€ť, but this was always a thick-headed assertion: marijuana has around 400 compounds, many of which have medical effects. CBD (oil without the psychoactive THC compound) can ease pain and nausea and reduce symptoms of rare diseases, while cannabis has had positive effects on cancer patients.
Cannabis is now Schedule 2, after the government decided it had medical uses after all. The recent cases of Alfie Dingley and Billy Caldwell, two children needing medicinal cannabis to ease their epilepsy, paved the way for change. Yet Javid has stressed that legal recreational use is â€śin no wayâ€ť on the horizon. This despite a recent report stating that cannabis legalisation could save ÂŁ300 million in policing, criminal justice and drug treatment services, and a June study showing that it could generate annual tax revenues of ÂŁ3.5bn. The latter is surely an enticing figure. The UK could do with the cash; besides, itâ€™s already the worldâ€™s biggest producer of legal cannabis for medical and scientific research (95 tonnes in 2016, 44.9 per cent of the official global total), as well as the biggest marijuana exporter. We are giants. And yet, in terms of recreational business â€“ well, there is no business.
In America, itâ€™s booming. Organa operates in ten states, doing â€śnorth of $100m retail sales every yearâ€ť, says Driessen. â€śAnd the number grows significantly every year.â€ť The company was born in Colorado, which, in 2012, pioneered legal recreational cannabis; two years later, Sarah Silverman was flaunting her Organa vape on the Emmys red carpet.
Every company has its own story. Organa cofounder Chris McElvany started in 2007 by playing around with e-cigarettes, wondering how to insert cannabis oil. Nancy Whiteman, founder of Wana (short for marijuana) Brands, also based in Colorado, was a marketing and sales consultant when a family friend got into the marijuana-infused soda business. Soon after, Whiteman and her then husband began to experiment in the kitchen. Wana is now Coloradoâ€™s biggest edibles producer (mainly gummies), available in four states and moving into more. Wanaâ€™s tagline is â€śEnhance Your Lifeâ€ť. â€śItâ€™s a mainstream positioning that we think a lot of people relate to,â€ť Whiteman explains. Their clean packaging was designed to avoid the stereotypical stoner image. â€śI wanted our products to look professionally made, like something you could go into Whole Foods and pick up. It communicates that this isnâ€™t a hippie product: this is made by people who know what theyâ€™re doing.â€ť
She cites consistency as key, in terms of both taste and potency â€“ from state to state, customers need to know exactly what their taste buds and brains are going to experience. But the federal issue has made that a challenge. â€śThe packaging is different in every state. Some say it has to be a certain font, some say you canâ€™t have pictures of fruit on the label. Itâ€™s maddening from a marketing viewpoint. Thereâ€™s no way to achieve brand consistency.â€ť
But these companies still have a head start on the corporate giants, who canâ€™t get involved in cannabis because of the federal illegality. The newbies have expanded ferociously and achieved effective dominance. â€śItâ€™s given us this shroud of protection,â€ť says Driessen, â€śwhere the large tobacco and alcohol companies simply canâ€™t come into the market yet.â€ť If (or when) the big corporates do get involved, he hopes that rather than putting his like out of business, theyâ€™ll want to acquire them. He describes the cannabis world as â€śa rocket ship â€“ the next great American industryâ€ť.
Britain is watching. GW Pharmaceuticals, one of the worldâ€™s biggest cannabis companies, licensed to grow marijuana for medical use abroad and listed on the Nasdaq, is based in Norfolk. British firm Sativa Investments, which funds medical cannabis ventures, floated in London this March. Tobacco giant Imperial Brands has recently invested in medical cannabis research firm Oxford Cannabinoid Technologies, owned by UK private equity company Kingsley Capital Partners.
In June, the former Conservative leader William Hague wrote in the Daily Telegraph that the war on cannabis had been â€ścomprehensively and irreversibly lostâ€ť, and called on Theresa May to legalise it. The idea was quickly dismissed by Downing Street: â€śThe evidence is very clear that cannabis can cause serious harm when it is misused.â€ť Not like, say, alcohol. And remind us of the therapeutic value of cigarettes?
But in the wake of medical legalisation, change may be coming. Whiteman has some clear-headed advice for those who hope to leap in when it does. â€śDonâ€™t reinvent the wheel,â€ť she says. â€śLook at models that have been implemented successfully.â€ť A 60-year-old mother of two, Whitemanâ€™s life has changed dramatically in the last eight years. â€śIf you came up with a stereotype of someone starting a cannabis business,â€ť she says, laughing, â€śit probably wouldnâ€™t be me. This is a growing, mainstream company with real professionals.â€ť Cheech and Chong it ainâ€™t.
2004: Cannabis is downgraded from a class B drug to class C, removing the threat of arrest for possession.
2009: Cannabis is reclassified as class B.
2015: County Durham police announce that they will stop targeting those who grow cannabis for personal consumption unless their behaviour is â€śblatantâ€ť. Police in Derbyshire, Dorset and Surrey follow suit.
May 2017: Campaigning for the general election, the Liberal Democrats state that they would legalise cannabis sales.
July 2017: Eleven-year-old epilepsy sufferer Billy Caldwell becomes the first person to receive an NHS prescription for medical marijuana.
May 2018: The Home Office orders Billy Caldwellâ€™s doctor to halt his prescription. Members of the Royal College Of Nursing vote overwhelmingly in favour of legalising medical cannabis.
June 2018: Home Secretary Sajid Javid issues an emergency licence to allow 12-year-old epilepsy sufferer Alfie Dingley cannabis oil and orders an official review of medicinal cannabis use.
July 2018: Alfie Dingleyâ€™s mother, Hannah Deacon, becomes the first UK citizen to legally import cannabis oil. The Home Office legalises medicinal cannabis for patients with â€śexceptional clinical needâ€ť.