‘APPG Plan for a Legal and Regulated UK Hemp and Cannabis Sector’ – APPG Minutes 18.07.22

5th Meeting

4pm Monday 18th July 2022, Committee Room 7, Committee Corridor, Palace of Westminster

Minutes Draft

Attendees

Internal

Crispin Blunt MP (Co-chair)

Baroness Manzoor CBE (Co-chair)

Adam Afriyie MP

Tommy Sheppard MP

Tarsilo Onuluk (Office of Crispin Blunt MP)

Ed Warner (Office of Crispin Blunt MP)

Callum Thompson (Intern)

External

Nick Morland (Tenacious Labs)

Andy Cutbill (Tenacious Labs)

Charles Sampson (Tenacious Labs)

Alex Markland (Tenacious Labs)

Caleb Proudman (Tenacious Labs)

Renata Legierska (CSAB)

Prof. Mike Barnes (CIC)

Jamie Bartley (CIC)

Rebekah Shaman (BHA)

Jade Proudman (EIHA)

Mark Tucker (TTS)

Paul Atherton (TTS)

Online

Paul Tossell (Food Standards Authority)

Lorenza Romanese  (EIHA)

Tony Reeves (EIHA)

Marika Graham-Woods (CTA)

Sian Phillips (CTA)

Adrian Clarke (Tenacious Labs)

Andrew Richards (Hudson Sandler)

Harry Griffiths (Hudson Sandler)

Ben Stevens (Cannabis Wealth)

Ulf Buhne

Otto Buhne

Apologies

Lord Hylton

Presentation of the APPG Report

Crispin Blunt MP, chair of the APPG for CBD Products, opens the meeting, welcoming those present, noting that the content of the meeting will concern the APPG report commissioned by the Secretariat, and passes off to Nicholas Morland, Secretariat and lead of Tenacious Labs, to present.

Nick thanks Crispin Blunt MP for the introduction and goes on to thank the many people who helped with the creation of the report. He continues by pointing out that this report is more of a business plan, with a fully researched financial and commercial focus, being illustrative of the points which the least contentious and most likely to deliver meaningful results, this being an increase in jobs and tax revenue to the UK. He goes on to say that the report for the UK is based upon Colorado, as it stands as one of the best current examples out there to date of what a legalised CBD and cannabis market can look like, though mentions that even Colorado’s market has had many issues and learning curves, especially around diminishing the illicit market.He makes note of where the Colorado model has been affective however, and how this will compare to the UK, stating that the UK would be looking at an annual tax revenue of approximately £3.5-5 billion, without increasing tax on any existing items, pointing out that if we were to leave out the adult-use and recreational market and just stuck to CBD, medical and industrial hemp, there’s still approximately £3 billion a year to be seen from tax, alongside an additional approximate 200,000 jobs (*see plan for more accurately modelled figures).

Nick points out that the industry’s objective is not to make political decisions but to highlight commercial opportunities. He highlights that the business plan focuses on what they can do and should be able to do as an industry, such as carbon credits for insulation materials and an increase in jobs and tax revenue, “none of which is very controversial”.

Nick goes on to explain that alongside extrapolating Colorado’s model and figures to the UK, they have also asked people within the Colorado industry what they would have done differently with hindsight, to which the overwhelming answer was that they wished they had established a specific plan for reducing illicit use alongside a plan for legalisation. Legalising alone was not enough to drive out illegal trade, they’d said. Successfully driving out illegal trade would require very careful enforcement, not just making sure illegal sellers were arrested. It would require making sure taxes were not put up too high on legal product as it then wouldn’t be worthwhile growing it commercially; instead making more financial sense to grow and sell illegally and cut corners.

Nick goes on to highlight that the presented plan, based upon the research and representation of the CTA, CIC and EIHA, who collectively represent over 700 companies within the industry, needs to be delivered as a piece, not just as individual sections of the plan, but the whole thing. He mentions that this was a focus when structuring the plan, commending the many people who worked on it and the vast amount of researched data contained within it.

Nick makes note that Scotch Whisky stands as an example of how the CBD, wellness and cannabis industry should be structured within the UK, mentioning that visitors centres for scotch whisky are a core structure of the business model and this could be replicated within this new industry to promise further tax income. He also points out that, similarly to scotch whisky, this new industry would introduce a number of jobs to rural areas, allowing work for those who don’t want to continue in the education system or want to remain where they grew up.

Finally Nick goes on to summarise the key points of the business plan and the industry’s objectives with delivering it, these being that the report has been crafted to deliver a digestible framework for government, to provide the background evidence for parliamentarians to make proper informed decisions around the potential creation of a new industry, but not to dictate what those decisions are. He reiterates that the APPG is a body of interested parties representing the collective industry, and that the decision making falls to political representatives, as it will require, legislation, regulation and enforcement.

He goes on to state that the plan acts as a confirmation that the industry is committed and ready to move forward with development in the UK, and ideally would like to see the introduction of legislation within the next year so that the UK can begin to see benefits in the form of job creation and tax revenue quickly.

He concludes by stating that if the UK were to follow this proposed plan there would be tremendous upsides in terms of jobs and tax. He explains that all of the plan’s actions are  doable, highlighting that the plan is designed around allowing the industry to get on with such projects under the direction of ministers. He also points out that there are timetables contained within each section of the plan relevant to the ministry and department that would need to be involved in each sector.

Crispin Blunt thanks Nick for his overview of the APPG report, extending his thanks to Andy Cutbill, Renata Legierska, and Charles Sampson of Tenacious Labs, the Cannabis Industries Council under Mike Barnes, the Cannabis Trades Association, the European Industrial Hemp Association, and the British Hemp Alliance.

He goes on to state that the next order of business would be for all APPG members who have taken an interest to decide whether they would like to put their names on the first draft, so that the chairs of the APPG can support the data being presented.

Baroness Manzoor CBE is introduced and thanks the many organisations responsible for creating the report, echoing Crispin’s remarks of how extraordinary the contents of the report are. She goes on to state her personal view of how the report is structured, saying that the foreword and introduction should be from the perspective of the APPG and industry as oppose to the chairs, as this will create a separation between the chairs and the industry that seats the APPG. She states that the report is from the industry; it’s their information and finance options, and that the chairs cannot personally verify all of the data within the report, and this makes it difficult for the chairs to potentially put their names to it.

Crispin notes that for the near future their focus should be on directing the attention of the APPG onto the redraft of the report containing the changes to the introduction and executive summary, to which Baroness Manzoor CBE replies by stating that they should go further and develop a timetable, creating a separation between the industry’s report and the chairs, stating that this would allow the industry to be more straightforward with its analysis of the industry, and to a greater point would allow ministers and chairs of the APPG to be more brutal in taking apart the report when presenting it to other ministers. She says that they would not be arm-twisted into agreeing with the report, but would actually be able to point to sections they agree with and sections they have difficulty with, which would make their position more credible.

She goes on to state that the current situation with new legislation coming through the Commons and Lords is busy, and it would be unlikely for any new primary legislation to come through the House anytime soon, saying that it is likely that they will have to work within a longer timeframe than a year to see legislation be established around the potential new industry. Further, she states that the APPG and chairs will need to work very closely with the two potential leadership candidates between now and September to get the group on the radar, and that working on creating a ‘crib sheet’ to give to people in the Commons would be very useful, especially since the topics this APPG are working on are controversial and need to be understood perfectly to translate the key points, goals and opportunities of the report, and a short summary would be very helpful in getting this across.  

Crispin agrees with this and goes on to say that if all members are agreed in general terms on the report’s presentation of the industry opportunities, that it would be sensible to get on the radar of civil servants as soon as possible.

Tommy Sheppard MP asks whether the fact that recreational cannabis is criminalised is the reason why there is great difficulty around building this new industry, and whether a small change in legislation would allow for these held-back industries, such as industrial hemp, to be fully realised.

Crispin replies by stating that there are already significant economic opportunities available to the UK right now within the cannabis industry without considering decriminalisation, however those opportunities are significantly more so when considering the potential of a fully regulated and legalised adult-use industry. He goes on to say that his recommendation would be that government put into place the capacity to assess what a regulated adult use market would look like, considering the potential economic opportunities.

Tommy Sheppard MP asks whether this could be done without reform to the Misuse of Drugs Act. Nick Morland replies by explaining the central focus on the structure of the report, stating that the APPG report has been laid out in such a way that each section can be given careful consideration, including adult use. He points out that all the other sections are far from controversial, and the current issue is that the MDA is having an unintentional effect on potential areas of industry that aren’t concerned with adult use or high-THC products or services. He goes on to say that the only tweak necessary would be a change to the percentage limit to allow the vast majority of the APPG report to come into effect, which would establish a viable and lucrative UK market that would bring well over 200,000 jobs, without even considering a legal adult-use market. He goes further by saying that there is no reason we should treat cannabis and hemp with such fear. He says that if we established a process to review evidence around the industry and its sectors there would follow a natural process of opening up segments covered by the report to wider realisation, and that this would become easier and more informed as the process continued. He also states that if the whole sector were to be legalised straight away it would be incredibly unsuccessful, and that this needs to be build up over time if it’s to be done right.

Baroness Manzoor CBE agrees with Mr Morland that this process of breaking it down into stages is key, that aiming straight for the endgame would come with great difficulty and would ultimately fail, and that we should instead focus on what is immediately achievable.

Nick goes on to point out that there is massive potential for the UK in this, as it is much easier to tweak legislation in the UK than in the US, and if the UK were to bring in a regulated market for cannabis and hemp international companies would be basing themselves in the UK, which would establish the UK as a global leader within the international industry. He goes on to state that decisions around adult-use markets and the potential tax revenue are not the concern of the industry but that of those in government, and simply states that the industry wants to be able to develop the non-controversial side of the market in the UK whilst the opportunity is there.

Baroness Manzoor CBE agrees that they shouldn’t start the conversation by talking about decriminalisation as this will scare away many colleagues and potential supporters of the report. She goes on to state that if the introduction of the report were to be written from an industry perspective, this would allow the chairs to be sharper when looking at potential legislation, mentioning that doing this alongside talking to ministers and potential cabinet members about the opportunities of the report are likely to advance their success, noting that Crispin had already been talking to ministers about the APPG’s work and objectives.

Crispin Blunt MP confirms that he had already spoken to Rishi Sunak MP about the report and its objectives, stating that he was interested in the economic opportunities, especially the heavy data and researched arguments contained within, pointing out that the vast amount of data is a great way of getting across the opportunities available to the UK. He then reiterates that the US model in Colorado had its main weakness in putting high taxes on the legal market right from the beginning which left the illegal industry in a better economic position than it should have, stating that if taxes were introduced slowly the illegal market would have been put out of business more successfully.

Adam Afriyie MP then comes forward to state that the report is a fantastic piece of work, saying that its structure and logic and focus on detail and financial benefits is the best way to approach the topic. He points out that everyone can acknowledge the benefits to be seen from medical research, commercial application, and many other aspects of the cannabis plant, even where this includes slightly higher levels of THC, however this is where research is lagging behind the industry. He goes on to say that the approach of the report, in its recommendation of opening a dialogue with the civil service anding look through the propositions methodically and rationally instead of rushing to the endgame, is a great idea. It is much better that it lays out a framework for discussion and research.

Crispin Blunt MP then lays out the next steps for the APPG, these being the gaining of approval of parliamentarians for the introduction of the report, and identifying any concerns from any of the included parties, as the report should be supported by everyone concerned to give it a stronger platform. He goes on to say that if by the end of the week they could get parliamentary agreement by circulating drafts and redrafts in select committees they could then identify what colleagues are going to take an interest in, and from that point can keep submitting the report as opportunities arise.

Baroness Manzoor CBE states she endorses how this report is being advocated, but goes on to suggest that they should invite the heads of state to informal meetings with the APPG so any concerns or conflicts can be voiced and settled in a proper fashion, to which Crispin Blunt agrees is a good idea to initiate once the new leader and cabinet are established in September. They go on to discuss how they should invite ministers and when the best time would be to hold informal meetings with individual departments.

Adam Afriyie MP adds to this, suggesting that the report has sections more relevant to different government departments, and that it may be a good idea to sit with individual departments one by one and go through the report focusing on relevant sections for each meeting.

 Crispin Blunt MP points out that one challenge they need to face is the current organisation of the Joint Committee, saying that it is currently ran out of the Home Office but excludes the departments for Environment, Transport, and Business, and that this is a glaring issue in the management of this part of the drug strategy. He then opens the floor to comments from other attendees.

Rebekah Shaman of the British Hemp Alliance introduces herself and points out that the report leads with industrial hemp, stating that this is the lowest hanging fruit within the report as it is the least controversial and offers wide economic opportunity. She reminds the attendees that hemp is currently targeted as a controlled substance under the Misuse of Drugs Act, going on to say that this focus on industrial allows them to open a discussion based on an acceptable understanding of the uses of cannabis that is nothing to do with recreational use.

 Crispin identifies that this brings up a proposal he intends to bring back to the APPG in September to rename the group the APPG for CBD and Hemp, given the importance of hemp within this discussion and the wider industry.

 Baroness Manzoor CBE goes on to say that she believes there needs to be a differentiation made within the report about adult use and recreational use, stating that many people will see these as the same thing, and if they don’t define the difference between the two they will become interchangeable and shatter the APPG’s credibility, reiterating that people need to know the APPG is focused on industrial, medicines and CBD, not just recreational drugs, to which Crispin Blunt agrees, stating that the politics need to be right to be successful.

Jade Proudman of the European Industrial Hemp Alliance introduces herself, and states that she would see the market being broken down into two distinct sectors, one for the wellness and food sector, and one for adult use and recreational, to which Baroness Manzoor CBE agrees is good structure to investigate.

Crispin then goes over the summary of the Secretariat’s spending reports with the co-chair and Tenacious Labs, and then concludes the meeting by proposing that the APPG next meet on the 6th of September, the day after the summer break and once the new Prime Minister and Cabinet are selected. He then suggests that further meetings in that month would be worthwhile to bring in junior ministers and directors to evidence levels of interest in the APPG and its work.

Ends 11am