03 June 2020

Forward-thinking landowners are always considering how they can maximise the use and value of their key asset – their land. Lee Murphy explores a project that is seeking sites for medicinal cannabis cultivation facilities.

Hanway Associates, a strategic consultancy with expertise in cannabis research has teamed up with property experts Savills and CambridgeHOK, specialists in vertical farming and glasshouses, to offer what they say is a one-stop-shop for investors and businesses looking to capitalise on the UK’s medicinal cannabis market.

The CROP17 project - named as there is a 17-step process that has been devised - is seeking landowners who may have potential sites for the creation of medicinal cannabis cultivation facilities.

Savills role in the project is to source an appropriate site which considers all planning issues and, importantly, the company is researching sites that preferably have access to waste heat, waste C02 and, if possible, access to private wire renewable energy.

Alex Bragg, director at Savills, said: “It is really important to understand that the process of developing and running a cannabis cultivation facility in the UK for medicinal purposes is one which is extremely complex.

“It is not simply about having a suitable site, applying for a licence and producing the flower, which is the key ingredient for producing Cannabidiol (CBD) – the medicinal element of the crop,” said Alex.

“Once a site is identified you have to go through what is an extremely complex Home Office licensing process. Until very recently it requires you to have the facility built, up and running with everything in place including your staff and route to market before you would gain a licence to begin growing the crop,” Alex added. 

“That has been relaxed slightly but through CROP17, Hanway Associates can help with the process of putting forward an application that stands the best chance of being successful. CambridgeHOK provide the expertise in terms of the structures required.”

A project of this scale does not come cheap however with some estimates putting the level of investment required in excess of half a million pounds per acre. An understanding from the outset of the regulatory framework is also beneficial.

This huge financial outlay is not an option for everyone but another area where farmers and landowners are exploring possible opportunities is from the very different process of growing industrial hemp.

Hemp is a strain of cannabis that has been bred specifically for the traits required for a range of industrial products – everything from rope and car interiors to paper and some food products. It is different from the illegal strains of cannabis which contain high levels of tetrahydrocannabinol (THC), the psychoactive element, with hemp varieties grown in the UK having to contain less than 0.2% THC to be approved.

Home Office policy states that licences may be issued for the cultivation of cannabis plants with a low THC content for the production of hemp fibre for industrial purposes or the obtaining of seeds which are then pressed for their oil.

This policy is only applicable where non-controlled parts of the plant are used and does not allow for use of ‘green’ material - i.e. the leaves and flowers, as these are controlled parts of the plant. Applications for low THC cultivation licences, with the aim of making so-called CBD oils from controlled parts of the plant, will not be considered.

Some critics however have become frustrated with the process of applying for a licence to grow industrial hemp. CLA member Freddie Fellowes from Huntingdonshire says he is ‘disillusioned’ with the process and is calling on the Home Office to relax legislation which he believes is holding back landowners from tapping into significant new markets.

Freddie has wanted to grow the crop at the family’s 7,000-acre Abbots Ripton Estate for many years as a potential new income stream. “In terms of a cash crop it looked like it had massive benefits,” said Freddie. “It looked great in rotation, it had potential to combat black-grass, which would be a golden bullet for us and it was great for soil structure. It has strong environmental credentials and seemed like a great crop to give a go.”

Freddie initially gained a licence to grow around an acre of hemp on a licensed festival site at the estate for a display crop within an event, but due to a change of plans the licence wasn’t needed. The process had piqued his interest in growing the crop on a larger scale however. He reapplied for a licence at a different 22-acre location for a trial crop but this was refused due to the location being too close to the same festival site. “There is no appeals process,” says Freddie. “I had no way of raising the point that they had once approved a location within the licensed festival site and yet then refused another application because it was too close to it.”

Freddie Fellowes (above).

The Home Office currently has no plans to review policy around cannabis cultivation in the UK. It states that its hemp policy is in place to prevent misuse and diversion of the controlled parts of the cannabis plant. 

John Barrett, a director of farming company Sentry Norfolk, plans to grow 20 hectares of hemp this year and a further 200 hectares next year. He believes the investment required for specialist machinery to harvest the crop, understanding where and how it will be processed, and identifying end markets all need to be considered.

John Barrett (above).

“The easy bit is actually growing it,” says John. “It’s all the bits around it that make it more difficult such as the licence, the harvesting, processing and identifying markets. Historically in agriculture we grow crops and expect there to be a market for it, but this crop is very different.”

The complexities of securing a licence and identifying potential markets are not the only challenges according to the British Hemp Alliance. It believes the UK growers face a disadvantage because the most valuable part of the crop – the leaves and flowers – must be destroyed on site under current licensing. It would also like to see licensing decisions moved from the Home Office to Defra, where those with a greater understanding of farming practices would be beneficial.

As with growing any new crop, detailed research should be undertaken to assess its viability and potential for success. Hemp is no different, and with the complexities of a strict licensing regime, it is possibly even more important to do your homework and speak to others with industry expertise ahead of any new venture. 

This article first featured in CLA Land & Business magazine.