Written by Sebastien St. Louis, Co-founder & CEO, HEXO Corp.
The United Kingdom has been a pioneer in the production and export of medical cannabis and is now faced with the opportunity that the end of cannabis prohibition represents. The adult-use recreational cannabis industry is poised to generate revenue, create jobs and position some jurisdictions as global leaders and innovators. Where the United Kingdom may have missed converting the early television and information technology innovations into large sustainable industries, it has the opportunity to position itself for a promising future in cannabis.
Former Conservative leader William Hague called for the UK to be as “bold” as my own country, Canada, in creating a responsible and professional cannabis economy for both medical and adult-use products. This movement is being led by global pioneers like my company, HEXO Corp. We are leveraging first mover status to create unprecedented cannabis opportunities around the globe; it is not too late for UK entrepreneurs to do the same.
Modern cannabis market
The global cannabis market is growing exponentially. Today’s market is estimated to be worth USD$150 billion and Barclays has predicted that this figure could increase to USD$272 billion by 2028.
This explosive growth will be driven by consumer demand for a broad range of technologically advanced cannabis products and experiences. The UK is well positioned to tap into this opportunity but, in a rapidly changing environment, it must act quickly.
Despite the tight domestic restrictions on cannabis use, the UK has been one of the world’s biggest medical cannabis exporters. In 2017, the UK was responsible for 69 per cent of global exports of medical cannabis, with the majority going directly to the United States (US) market in a narrow range of products.
The UK Government has repeatedly said it has no further plans beyond the current restrictive access to medical cannabis, but calls for comprehensive legalization are growing. Make no mistake: there is already an enormous global market being driven by increasing acceptance of both medical and recreational cannabis that will continue to grow and evolve, with or without the UK’s leadership.
In the US, while cannabis remains illegal at the federal level, recreational marijuana is now legal in 10 states and medical marijuana is legal in 33 states. The recent federal US Farm Bill will allow hemp-derived CBD extraction and remove it from the restricted list of substances.
Europe is expected to become the largest medical cannabis market globally, with the legalization of adult-use cannabis likely to lag two to six years behind North America.
Mexico has legalized medical along with pharmaceutical cannabinoids. In Latin America: Argentina, Brazil, Chile, Colombia, Uruguay, Argentina, Peru have all embraced medical cannabis in some way. Uruguay has permitted recreational use.
Canada leading the way
Each of these regions is moving quickly on cannabis, but no country has implemented more rapid progress and innovation in cannabis legalization, product development and adult recreational use than Canada. Having provided patient access to medical cannabis since 2011, Canada became the world’s first industrialized country in 2018 to allow the use of adult-use recreational cannabis–developing a national model for Britain and other countries to follow.
Canada rooted its approach to national adult-use cannabis legalization in several guiding principles:
- Reduce cannabis consumption by young people;
- Reduce the illicit cannabis market;
- Strengthen law enforcement measures to deter the sale of cannabis outside the legal framework, especially to young people;
- Establish and enforce strict regulations around cannabis production, distribution and sale;
- Continue to provide access to cannabis for medical purposes; and
- Taxation of legal cannabis sales.
Now empowered by federal legislation, Canadian companies are leveraging a robust domestic cannabis market and federal export policies to drive global markets and fuel the exponential growth and professionalism currently being adopted by the industry worldwide. And we’re not done yet, as regulations are expected for the production and sale of edibles and extracts and products that can be applied topically to skin, hair and nails in October 2019.
HEXO is a Canadian cannabis success story. From our modest start on a small remote farm in the province of Quebec, HEXO has emerged as a leader in the race to capture the global market. We are listed on the New York Stock Exchange, have the biggest supplier contract in Canada and a unique partnership with Molson Coors Canada which resulted in the creation of Truss to produce cannabis-infused beverages. Further, HEXO is positioned to expand into the edibles, soft gel capsules, vapes and topicals space in the very near future, with a vision to provide consumers with branded, consistent, quick on-set and off-set cannabis experiences “powered by HEXO.”
We may have started small, but HEXO’s footprint is expanding quickly. We have 2.27 million square feet of production and manufacturing space in Canada alone. Once fully ramped up, we anticipate producing up to 150,000 kg per year to create a large variety of advanced cannabis-infused products. Powered by a team of innovators in our Innovation, Design and Engineering lab, HEXO is creating the cannabis products of tomorrow that can become central to a variety of adults’ daily experiences, ranging from sleep to sport to sex to fun.
Following the roadmap established in the creation of Truss with Molson Coors Canada, HEXO plans to partner with best-in-class Fortune 500 consumer packaged goods companies in the cosmetic, health and wellness, and vapes and edibles spaces, and to expand geographically beyond our current operations in Canada and Greece, where we are currently establishing a 350,000 square foot Eurozone processing, production and distribution centre.
The UK has a long and celebrated history in innovation; the time is now for UK entrepreneurs to join Canadian peers like HEXO in leading the cannabis revolution and creating the sustainable industries of tomorrow.