Boosted Profits and Enhanced Gains: Unveiling the British Cannabis Sector
Rewritten Article:
hidden behind miles of razor wire and a swarm of alarms, Dalgety's top-secret cannabis production facility is tough to reach, even with a GPS (trust me, I've tried). A hefty £10 million investment and years of meticulous regulatory checks finally paved the way for this elusive complex to ship its first medical cannabis products to patients early this year.
As you step foot onto this futuristic site, overseen by a 24/7 ex-military security team, it becomes clear that no expense was spared in creating an environment designed to produce stunning results. Head grower Brady Green, who brings over 15 years of experience cultivating medical cannabis from Canada, was tasked with designing the perfect facility. And today, his vision is a reality.
The cutting-edge cultivation rooms replicate the changing seasons, using energy-efficient lighting, hydroponic systems, and precise climate control to optimize growth conditions. As we move through each stage of the growth cycle, the temperature and aroma gradually intensify. The temperature is closely monitored to the nearest 0.5 degree Celsius and humidity to the nearest 1%, while subtle air pressure adjustments ensure a perfect environment for the plants to thrive.
Dalgety is currently creating enough cannabis to fill 4,000 prescriptions each month, but by 2026, the operation aims to expand to full capacity, churning out 2,600 kg of cannabis annually. In fact, they boldly predict their yields will be 82% higher than the top 1% of cultivators globally.
"We're aiming to increase our output by a staggering five-and-a-half times by 2026," says CEO James Leavesley. "We're looking forward to witnessing the rapid growth of the market."
The Blossoming Private Market
The U.K. is renowned for its towering position as the world's largest legal cannabis producer and exporter for medical and scientific purposes, owing mostly to Jazz Pharmaceuticals (formerly GW Pharma). They've been manufacturing the FDA-approved cannabis-based medicines, Epidiolex and Sativex, since the 90s.
The legalization of medical cannabis in 2018 sparked interest and opportunity in a domestic market, leading companies like Target Healthcare and Rokshaw Laboratories - acquired by the world's largest cannabis company, Curaleaf, in 2019 – to take advantage of the growing demand.
Together with Germany, the U.K. is marked as a key player in the European cannabis sector, with industry analysts at Prohibition Partners forecasting the market will skyrocket from $255 million in 2024 to a whopping nearly $570 million by 2028. (full disclosure: Prohibition Partners also operates a media brand I contribute to in the U.K.).
The scarcity of cannabis prescriptions through the National Health Service (NHS) has laid the groundwork for a booming private market, with over 40 clinics now dispensing cannabis. Exact patient numbers remain elusive, though estimates suggest there may be up to 60,000 patients. Meanwhile, the NHS Business Services Authority reports that over 300,000 cannabis-related items were prescribed between April 2023-24 – more than double the numbers from the previous year.
In their recent U.K. report, Cannamonitor estimates that an astounding 79% of these prescriptions are for flower varieties, euphoria-inducing strains with high THC content and almost all imported from overseas.
Dalgety is gearing up to cater to this demand, with five new strains planned for introduction in 2025 and over 100 varieties in their collection. The team selected their genetics based on Green's expertise, importing 600 cannabis cuttings from the west coast of Canada – a remarkable 99% of which survived the journey.
"We worked with partners to import tissue culture cuttings so we didn't have to waste valuable time on seed trials and spent a year hunting for genetics," Green explains. "Now we're branching out, introducing unique strains that people might not be familiar with because of the difficulty in cultivating them."
Economic Rationales for Regulation
In the face of the Labor government's hard-line stance on cannabis, there's a growing sense among many that policy change is imminent. Although London Mayor Sadiq Khan called for decriminalization in 2022, Prime Minister Keir Starmer has made it clear he has no intentions of altering drug laws or treating cannabis use as a minor offense.
Even calls to widen prescription access for children with treatment-resistant epilepsy – many of whom remain unable to secure access to the treatment – were rejected by Health Minister Karin Smyth in the House of Commons earlier this year.
However, with European countries like Malta, Luxembourg, Czechia, Switzerland, the Netherlands, and Germany pushing toward cannabis regulation, it seems only a matter of time before the U.K. follows suit.
A recent report by Transform Drug Policy Foundation outlines how regulating cannabis for adult use in the U.K. could generate up to £1.5 billion in annual net benefits for the Treasury. The "High Returns: The Economic Benefits of UK Cannabis Legalisation" report anticipates that a mature regulated market could capture up to 80% of the current illegal cannabis market within five years while creating up to 15,500 full-time jobs across cultivation, manufacturing, retail, and ancillary services.
Dalgety received a staggering 2,500 applications in 48 hours in response to a Cannabis Grower job posting on Indeed. With the company now carefully vetting potential employees through extensive background checks, it's clear that the allure of working in this thriving sector remains strong.
As interest in cannabis grows and the demand for alternatives to the illegal market increases, policymakers will likely find it difficult to ignore the economic benefits of regulation. Researchers at Transform believe this argument, while secondary to public health and social justice reasons, is becoming increasingly important in the political debate, as well.
"The economic aspects of the cannabis reform debate are undeniably gaining political traction, particularly as governments face mounting financial pressures," write co-authors Ester Kincová and Steve Rolles. "Public support for cannabis reform, particularly for economic reasons like disrupting criminal profits and the potential tax revenue, is growing in both the U.S. and the U.K. Legal cannabis markets are spreading worldwide with reforms now underway on every continent. This global trend, coupled with growing public support in the U.K. – polls indicate a majority supports legalization – suggests reform is increasingly likely, if not inevitable, with economic reasons playing a critical role."
- The regulatory checks and investments in Dalgety's cannabis production facility were rigorous, totaling £10 million, and are likely to unfold as more cannabis products are shipped to patients.
- As demand for legal cannabis in the U.K. continues to expand, led by companies like Dalgety, it's likely that the private market will blossom significantly, with the market forecasted to skyrocket from $255 million in 2024 to nearly $570 million by 2028.
- The economic rationales for regulating cannabis are becoming increasingly important in the political debate, and with the upcoming production of new cannabis strains by Dalgety and other companies, the potential tax revenue and job creation could be substantial, potentially leading to a regulated market that captures up to 80% of the current illegal cannabis market within five years.
