UK: Cannabisness: springing up

Source: Evening Standard, UK

Pub Date: Tuesday, 3 September 2002

Subj: UK: Cannabisness: springing up

Author: David Rowan

Web: http://www.thisislondon.co.uk/

CANNABISNESS: SPRINGING UP

Suzie, 36, is a respectable mother of three who left accountancy to launch a successful landscape gardening business. But it is the healthy crop that she cultivates in her own flower beds that might surprise her well-to-do clients, among them a judge and a number of police officers and solicitors.

For lovingly tended at the back of her 40ft garden in suburban Southend-on-Sea sits an elegant grove of Cannabis sativa - still an illegal Class C drug, according to David Blunkett's reclassification, but soon, if Suzie is right, just another social relaxant to go legally on sale.

Once the law changes, as she believes it will, Suzie plans to launch her own cannabis cafe so she can profit from the expected boom in demand. "It will cost me about £7,000 to open my Southend coffee shop, and I've already had offers of backing," she says. "I'd be hesitant about supplying the shop myself, but I do have a friend who would grow for me."

As debate intensifies over what many see as the inevitable decriminalisation of cannabis, small-scale entrepreneurs like Suzie are vying with corporate investors to gain a foothold in this multi-billion-pound market. From cannabis cafes to cannabis vodka, the new commercial opportunities of "cannabisness" are spurring hundreds of business plans and countless board meetings - and all despite the Government's insistence that legalisation is not on the agenda.

Simon Woodroffe, founder of the Yo! Sushi restaurant chain, is among the investors standing by - among them pop stars, venture capitalists and even a television racing pundit. While most established businesses are keeping silent on their plans, Woodroffe is looking to create an "elegant" range of highclass cannabis bars that would redefine the drug's image.

He wants to create a fashionable space - call it Yo! Blow - for urban sophisticates to meet for a smoke. "I'd hope licences would go to people who have a proven record of operating restaurants or bars," he says. "I'd just find it a fascinating thing to do, and we'd all be better off if we drank less."

He has even proposed pumping cannabis smoke through his buildings to save customers the trouble of rolling their own - a joke, he says, that has taken on a life of its own. But he is serious about the business opportunities a change in the law would provide. "It will definitely happen in time," he says.

Another eager cannabis investor is Jamiroquai singer Jay Kay, who has invited concert audiences to share an oversized joint, and admits to being a former dealer himself. Today, if the law allowed, he too would like to back a London cannabis bar - and, according to some suggestions, he would be prepared to spend £1 million to secure the right property. "Jay Kay has considered investing in such a venture if the time was right," his spokesman confirms.

David Dundas, the Seventies pop star who found fame with the song Jeans On, has not only invested in cannabis, but is already reaping the financial rewards. Dundas was one of the initial investors in GW Pharmaceuticals (GWP), the first company licensed to grow cannabis in Britain for medical use, and when the company floated last year his 40,000 shares initially grew five-fold in value. Other investors included John Francome, the former jockey who now commentates on Channel 4, children's campaigner Lady Chadwyck-Healey and City investors Peter Mountford and Adrian Bradshaw. Not a bad roll call for a company that grows 15 tonnes of cannabis a year.

Protected by heavy security, somewhere in the South of England, GWP is today cultivating more than 40,000 cannabis plants. Assuming its research trials are successful by late next year, the company expects to have cannabis medicines legally on sale in early 2004. "Cannabis is a very versatile plant," explains GWP's spokesman, Mark Rogerson.

"We're looking at it for the treatment of multiple sclerosis, cancer, a wide range of intractable painful conditions, even arthritis. It's not a question of if these medicines become legal, but when. That doesn't require any change in the law, just a decision by the Home Secretary to alter the medical schedule of drugs that doctors are allowed to prescribe."

The drug's active ingredient, tetrahydrocannabinol (THC), will be delivered not by smoking, but through such mechanisms as a spray aimed under the tongue. And if the company's founder, Dr Geoffrey Guy, is correct in his conviction that the trials will show cannabis to be "a remarkably safe, very worthwhile medicine", other pharmaceutical companies are certain to follow in pursuit of a huge potential market.

Exactly how much that market is worth is open to debate. Campaigners for legalisation claim that nine million British smokers currently spend around £3.5 billion each year on the unlawful trade. Even according to the Home Office, which commissioned its own sober assessment last year, some 2.6 million users in England use the drug on average 78 times a year, spending £6.40 a time to get high.

Edward Bramley-Harker, the economist who prepared the Home Office survey, estimates the total UK market at £1.6 billion. For regular users, that typically means a £1,500 annual habit - a sum that legitimate organisations, from the tobacco industry to the Treasury, would like to get their hands on.

They will not acknowledge it, of course. The Treasury will not comment, and no tobacco company contacted by the Evening Standard would admit to making plans to sell cannabis products should they be legalised. But every now and then, a document slips out that suggests how advanced these companies are in their plans. One internal British American Tobacco (BAT) memo draws attention to "the undoubted opportunities which exist in the development of future products ... If the use of [marijuana] was legalised, one avenue for exploitation would be the augmentation of cigarettes with near-subliminal levels of the drug."

In another memo, a certain DE Creighton of BAT warns that tobacco products could expect "competition from cannabis ... We must find a way to appeal to the young ... so that the product image, and the product will satisfy this part of the market". And although the company denies it, Philip Morris, which makes Marlboro, reportedly applied in 1993 to trademark the brand name "Marley" - Marley, that is, as in Bob Marley.

Danny Kushlick, of drugs campaign group Transform, is convinced that tobacco companies, pharmaceutical firms and distilleries have developed "scenario plans" in case of legalisation. "Obviously the tobacco companies will leap on this with enormous verve," he says.

But Clive Bates, director of Action on Smoking and Health, believes this market may not in fact be ripe for cigarette firms to exploit. "My guess is they'll be very wary of getting into cannabis," he says. More likely, Bates believes, will be the well-funded launch of a cannabisbased gum, rather like nicotine gum, or new food products such as hash biscuits. Mr Kipling's Exceedingly Good Space Cakes, perhaps?

Breweries and pub chains have themselves been discussing the potential impact on profits of legalisation, notably cannabis smokers' tendency to consume less alcohol.

The drinks firm Diageo, which makes Guinness and Smirnoff, insists with typical firmness that "this is not something we consider relevant for our business".

Yet the Evening Standard understands that Britain's first cannabis cafe The Dutch Experience in Stockport, was approached some months ago to see if it would stock Guinness. The offer was refused; Guinness says it is unaware of any approach.

Sir Richard Branson, an active supporter of decriminalisation, believes that the legal cannabis market will actually favour small traders rather than huge conglomerates. He, for one, is not sure that the Virgin empire would ever wish to sell the drug. "I believe it's a product that should not be too commercialised," he says, "and is better suited to being marketed by small cafe-style specialists."

This is where Nol van Schaik fits in. Van Schaik, a 48-year-old Dutchman, is a founding father of "cannabisness" in Britain. The owner of three coffee-shops in Haarlem, he has since March been training British entrepreneurs to open their own cafes, and personally backed The Dutch Experience in Stockport.

His five-day "Cannabizness Workshop" costs £575 a head, and topics covered include "How to make Netherhash", "The joint-rolling machine in action" and "How to differentiate and value the range of weeds and hashes". Van Schaik believes Britain is ready for a wave of new cannabis cafes, more per head even than in Holland.

"The charm of coffee shops is that they're independent," van Schaik says. "I don't see that Starbucks doing marijuana would succeed, though I'm sure they'll try it."

Van Schaik has been trading since 1991, and would now be "a very rich man" if he sold up: his shops each take around 500,000 euros (£330,000) a year.

And though the sale of cannabis is tolerated rather than legal in Holland, the tax office is rather pleased with him: he pays income tax on his joints as well as 19 per cent VAT, and employs 30 people directly and a further 70 indirectly - many of them "aunties and grannies" who grow weed at home.

One of his workshop graduates is David Crane, a 38-year-old website builder from London who after eight months' work is hoping to open his own coffee shop in Hackney. It will cost Crane £250,000 to open The Hempire, which will be aimed at the over-25 crowd.

A week after finalising his business plan, Crane attended a meeting with police officers to discuss his plans, initially for a standard cafe that would tolerate smoking. The news was not good: "They made it very clear that we would be referred to the CPS if we opened," he says. "It may be prudent for us to wait a bit longer - but this is a big industry that won't go away."

Carl Wagner is already seeing the profits. Wagner, 43, runs the Divine Herb market stall in Hull's indoor market, selling gro-lights, hemp wallpaper, cannabis pasta and hemp boots and clothes. He has already rejected a £20,000 offer for the stall. Next January, he plans to open the Divine Herb cafe, for which he has just had three offers of premises from elderly medical cannabis users.

"I know of dozens of people who grow it, and I even arranged for a consortium of eight pensioners to grow it in their sheltered housing," Wagner says. "They're looking to supply themselves with medicinal cannabis, and I've asked them to pass over any spare."

But there are some things even beyond an astute businessman such as Carl Wagner. "I was approached by a rep to sell Cannabis Vodka," says Wagner, a reformed bottle-a-day man. "I had to say no - I just didn't want to associate such a safe plant with hard drugs like that."