How Hemp Licensing Reforms Will Boost the UK Economy
Proposed updates to industrial hemp licensing are designed to support legally compliant farmers in cultivating hemp and to foster investment within the sector, all while safeguarding the public against potential drug abuse.
Hemp, a cannabis variety with less than 0.2% THC, serves multiple legal purposes, including applications in construction and textiles. Additionally, it has the potential to positively influence climate change by capturing carbon.
To ensure that hemp is grown exclusively for legitimate uses, farmers aiming to cultivate this crop are required to obtain a licence. This measure strikes a balance between government support for farming and the necessity of preventing drug misuse.
The new proposals will allow licence holders to cultivate hemp across any part of their licensed farm and will extend the maximum licence duration from three years to six years, provided that all terms are adhered to.
Developed in consultation with experienced cultivators, the proposals also introduce an option for farmers to apply for a licence that can have a start date deferred by up to one year. These changes are set to take effect starting in the 2025 growing season.
The government has solicited the Advisory Council on the Misuse of Drugs to evaluate whether the allowable THC content in industrial hemp varieties could be safely increased to 0.3%.
It’s important to note that these changes will not alter the stringent laws governing cannabis, classified as a Class B controlled substance under Schedule 2 of the Misuse of Drugs Act 1971. Individuals cannot exploit these changes to evade penalties related to cannabis possession or distribution.
The government anticipates that law enforcement will maintain a stringent zero-tolerance policy towards cannabis possession, which remains a criminal offence enforceable by law. Possession can lead to a maximum penalty of up to five years in prison, a fine, or both, while supplying cannabis can incur a maximum sentence of up to 14 years in prison, a fine, or both.
Chris Philp, Minister for Crime and Policing, stated:
This government is committed to removing unnecessary regulatory obstacles for businesses, enabling them to thrive and grow.
The updates announced today will assist farmers and manufacturers in the UK in leveraging the economic opportunities presented through the responsible and legal cultivation of hemp.
Farming Minister Mark Spencer added:
Industrial hemp holds significant potential in the UK for generating new revenue streams, enhancing our bioeconomy without significantly detracting from food production land, and delivering broader environmental benefits.
The licensing adjustments revealed today acknowledge industrial hemp as a viable agricultural crop and will empower more farmers to incorporate hemp into their crop rotations, capture carbon, and market their harvests to the textile and construction sectors.
Under the Home Office’s “industrial hemp” licensing framework, hemp can only be cultivated outdoors for purposes related to fibre and seed production. Growers intending to utilize controlled parts of the plant, such as leaves and flowers, for legal applications—including the production of cannabis-based medicinal products—must secure a standard cannabis cultivation licence.
The number of hemp licences issued has seen a remarkable increase from six in 2013 to 136 in 2023. The cost for a first-time licence is set at £580, while licences are typically granted for three growing seasons. Returning growers currently pay £326 for a licence, averaging less than £109 annually.
Elena Rossi is a graduate of the University of Hohenheim in Germany, where she earned her degree in Agricultural Economics. Her coursework centered on farm management, agricultural policy, and rural development. Elena is dedicated to enhancing the economic viability of small farms and works as a policy analyst, advising on agricultural economics and food security issues in Europe.