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Last Updated: Thursday, 29 January, 2004, 06:38 GMT
The great cannabis cash-in
By Myles Neligan
BBC News Online business reporter

Cannabis plants
Made in the UK: Home-grown cannabis outsells imports
Britain's army of dope dealers will be indifferent to the partial relaxation of the cannabis laws which takes effect on Thursday.

They will be too busy making money to notice.

On 29 January, possession of small quantities of the plant becomes a non-arrestable offence under many circumstances, throwing the spotlight once again on Britain's biggest and most lucrative black market.

Just what the trade is worth is a matter of some debate.

A Home Office study in 2001 put the value of the British cannabis market at about 1.5bn a year, but most experts in the drug field say this is a highly conservative estimate.


According to the Independent Drug Monitoring Unit, a consultancy which advises the courts on drug pricing and supply issues, Britons spend closer to 5bn every year on the illegal narcotic.

To put this into perspective, Scottish & Newcastle - Britain's biggest brewer - sold just 2bn worth of beer in the UK last year.

When the fruit is no longer forbidden, it doesn't taste as sweet
Matthew Atha, Independent Drug Monitoring Unit
Moreover, it appears that the proceeds of the cannabis trade are ploughed straight back into the British economy.

Twenty years ago, most of the cash went abroad to line the pockets of the Middle Eastern or North African producers who controlled the UK market.

But according to the IDMU, domestic producers with clandestine plantations in their attics and cellars now supply close to 60% of the cannabis consumed in Britain.

"Most of the money stays in the UK these days. The prices and profit margins for imported cannabis have collapsed," says IDMU director Matthew Atha.

High Street

It has also been suggested that the cannabis trade delivers a substantial indirect boost to consumer spending.

A report from market analysts Research Business International last year claimed that the appetite-enhancing effects of cannabis encourage users to spend about 20 each on fast food and confectionery every time they smoke.

Marchers at pro-cannabis rally
Cannabis: A mass market phenomenon
This translates into an annual 6bn windfall for pizza delivery chains and newsagents, the researchers claimed.

The fact that the cannabis market has grown so large despite the threat of prison sentences and hefty fines to suppliers and consumers alike may seem surprising.

But a combination of prohibition and strong demand has made the trade so profitable that mere prison sentences have proved incapable of stifling it.

The equipment needed to grow high-grade cannabis can be bought legally for a few hundred pounds, while a single plant with a life cycle of about two months can yield up to 1000 worth of the drug.


The Green Party, one of many groups which supports the repeal of the cannabis laws, wants to harness the drug's revenue-generating potential for the greater good under a policy of "regulated legalisation."

It wants cannabis to be sold legally through a network of Amsterdam-style coffee shops, with a proportion of the proceeds ploughed back into local community projects.

"The emphasis on local initiatives is crucial," says Shane Collins of the Green Party Drugs Group.

"We would strongly oppose any attempt to commercialise cannabis by major corporations."

But any cannabis suppliers hoping for a sales boost after the new regime comes into force may well be disappointed.

While a few curious non-smokers may be tempted to take up the habit now that the risk of prosecution has diminished, just as many established users are likely to quit as the drug's outlaw allure begins to fade, say experts.

"When the fruit is no longer forbidden, it doesn't taste as sweet," says Mr Atha.

Ex-drug czar slams cannabis move
24 Jan 04  |  Politics
Q&A: Cannabis guidelines
22 Jan 04  |  UK

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