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UK cannabis companies and shares to watch

Following the 2018 UK legalisation of medical cannabis, some marijuana companies have listed in the UK. Explore details on UK cannabis stocks: from how you can buy and sell stocks, to regulation and the top stocks to watch.

How to trade and invest in UK cannabis stocks

With us, you can trade UK cannabis stocks with spread bets and CFDs or invest via share dealing.

Steps to trading or investing in cannabis

If you’re ready to start trading or investing in cannabis company shares, you can take a position in three steps:

1. Choose whether you want to trade or invest 2. Decide on a cannabis asset 3. Open a live account
Consider the differences between trading and investing and choose the one that interests you Make a selection from cannabis stocks and EFTs, or our exclusive Cannabis Index1 Complete our online form to create a spread betting, CFD trading or share dealing account

Learn more about how to trade and invest in cannabis

You’ll trade stock of cannabis companies on leverage. This means that you do not have to commit the full value of the position. Instead, you’ll only pay a deposit – called margin – but you’ll have full exposure to the underlying asset. Note that while leverage can increase your potential profits, it can also increase your potential losses.

Leverage isn’t available for investments – so you’ll have to commit the full value of your position upfront. But, this also caps your maximum risk at the initial cost of your position. Keep in mind though that investments can rise or fall in value, so you might receive back less than you initially invested.

Discover how to manage your risk

Best British marijuana stocks to watch

Although there are plenty of hurdles for cannabis companies to overcome, several cannabis-related businesses have already listed in the UK. Most of the ‘cannabis companies’ listed on the London Stock Exchange (LSE) and the Alternative Investment Market (AIM) are not pure plays, meaning they have other activities outside of marijuana.

Most smaller pure play stocks in the UK are listing on the Aquis Stock Exchange (formerly NEX Exchange), which is known as AIM’s younger brother and designed for small businesses looking to raise smaller amounts of money from the public.

Below, we explore the top UK cannabis stocks that you can trade with us, and we explain how you can gain broad exposure to the market rather than ploughing your cash behind one individual stock. There are measures you can take to manage risk accordingly. So, it is essential that you are aware of risks before taking a position.

Read about the top cannabis stocks in the world

1. Kanabo

Kanabo develops medical treatment products such vaporisers and a range of non-smoking consumption solutions. With a significant focus on research and development, the company is working towards growing its innovative solutions even more.

Founded in 2016, Kanabo became the second medical cannabis company to list on the LSE. After its February 2021 listing, the company secured its first UK distribution agreement. Kanabo has operations in Israel and the UK.

2. Cellular Goods

Cellular Goods recently listed, with the backing of retired soccer star, David Beckham. Since its inception in 2018, the company has focussed on cannabidiol (CBD) wellness products with benefits that include inflammation reduction, skin protection and pain relief.

Cellular Goods innovatively uses biosynthesis to source active ingredients for its products, which is a quicker and greener alternative to traditional processes.

3. GW Pharmaceuticals

GW Pharmaceuticals is the undisputed leader in the UK medical marijuana space. The firm was founded in 1998 and listed on AIM in 2001, before it left London to join the NASDAQ in 2013.

Over the past decade, GW Pharmaceuticals has developed two of the world’s leading cannabis-based treatments and has grown into a company worth over $6 billion – larger than the main North American cannabis stocks such as Aurora and Tilray.

Sativex, a GW Pharmaceuticals product, is a spray containing both CBD and THC that is used primarily to treat certain types of multiple sclerosis (MS). It has been authorised in over 25 countries, including the UK. However, GW Pharmaceuticals does not market the product itself.

For example, in the UK it’s marketed by Bayer. Its second product, Epidiolex, is used to treat severe forms of epilepsy.

4. Associated British Foods

Associated British Foods (AB Foods) is a diverse company consisting of a variety of agricultural and ingredients businesses, such as sugar and corn, as well as its clothing retail arm, Primark. But it’s less known that the company is also one of the UK’s largest producers of legal cannabis.

It has converted a large amount of capacity in Norfolk to produce CBD-based cannabis rather than tomatoes, which is supplied to GW Pharmaceuticals to make its medical treatments, specifically Epidiolex.

5. Futura Medical

Futura Medical is a research and development business, based in Guilford, that specialises in producing transdermal technologies (essentially gels and creams) that can be used to deliver medicinal treatments through the skin.

It calls its transdermal technology DermaSys, and its lead product helps with erectile dysfunction. In 2019, Futura Medical established a joint venture with CBDerma Technology to explore how its transdermal system could be used to make cannabis-based products for patients. Together, the companies developed the ‘CBD 100’ gel – a patent application was filed for the formulation in August 2020. The companies, in partnership, are now exploring commercial avenues for the product.

6. AfriAg

AfriAg is primarily a logistics firm serving the agriculture industry across the world. In 2017, the company announced that it would be entering the medicinal cannabis market.

The company has since applied for a licence to cultivate and manufacture cannabis in the UK. AfriAg has also acquired 2.68% of Apollon UK, which has a fully licensed subsidiary (Apollon Formularies Jamaica Ltd) that is licensed to cultivate, process, research, develop and sell medical cannabis.

AfriAg is working on acquiring the remaining share capital of the company. It’s also working on satisfying all regulatory requirements for the acquisition.

7. DeepVerge

DeepVerge is a vertically integrated business, meaning that it manages its value and supply chain through ownership of, and collaborations with, its suppliers and distributors. It collaborates with artificial intelligence (AI), clinical research, water technologies, medical device and life science businesses companies to provide technology for comprehensive skin-care, health-care, pharmaceutical and cosmetic product testing.

DeepVerge’s CBD products include pain relief creams and wound dressings with anti-inflammatory and pain relief properties.

8. Zoetic International

Zoetic International, listed on the LSE, transformed itself into a vertically-integrated CBD business, having previously been an oil and gas company named Highlands Natural Resources.

After discovering gas in Kansas, US, the company found it had high purity levels of nitrogen and high concentration of hydrogen – which together have been used to make a fertiliser being used in a pilot project to improve yields at a cannabis growing facility.

The company sells products in the UK, Europe and the US. These include CBD oils, gels, cosmetic products, vapes and chew pouches. Product availability is subject to local regulations.

9. Sunrise Resources

Sunrise Resources is another natural resources company that has found itself chasing the momentum behind legalised cannabis. The company is developing a mining project in Nevada, US. It’s hoping to produce pozzolan, used in cement and concrete, and horticultural-grade perlite.

It’s planning on supplying the product to cannabis growers in the US, which mines less perlite than it needs, meaning it has to import the rest, mostly from Greece. So, Sunrise is hoping to benefit from that deficit. The company said that demand for horticultural perlite 'has been invigorated by the growth in cannabis cultivation' in the US and Canada.

Other UK cannabis stocks to watch

There are other UK-listed cannabis stocks to watch, and some of them offer greater direct exposure to the legal marijuana market. These include:

  • Freyherr International has said is a 'profitable, vertically integrated medicinal cannabis company operating in Slovenia
  • Sativa Group is a seed-to-sale business focused on CBD products for the medicinal and wellness markets
  • Ananda Developments is an investment firm that backs cannabis companies, including iCan Israel-Cannabis and Liberty Herbal Technologies. It also provides a platform for investors to gain exposure to the cannabis sector
  • Cash shell Spinnaker Opportunities is in the process of buying Kanabo Research, which helps formulate medicinal cannabis and over-the-counter products, as well as sells a pharmaceutical-grade vape pen

Cannabis in the UK: what you need to know

The UK’s attitude toward marijuana has changed dramatically over the last decade. Even though the UK has become the world’s largest legal medical cannabis producer, the drug is still illegal for recreational use.

According to a 2020 report by the Crime Survey for England and Wales (CSEW), around 3.2 million people had taken the drug over a one-year period – that is around 5% of the UK’s population – valuing the country’s black market at well over £5 billion.

A guide to the cannabis industry: all you need to know

Marijuana regulation in the UK

The UK’s regulatory stance toward cannabis is complex and, in some cases, contradictory. Medicinal cannabis was legalised in November 2018, following several high-profile cases about children with severe forms of epilepsy being unable to access potentially life-changing cannabis-based treatment.

Yet, access to legal medicinal marijuana remains extremely limited. It cannot be prescribed by your average general practitioner (GP), only by those listed on the Specialist Register of the General Medical Council.

The cannabis being prescribed is grown around CBD – the medicinal component – and must contain as little THC – the psychoactive element – as possible (below 0.2%). Public perception is improving and although the number of doctors able to prescribe medicinal cannabis is growing, they are not being encouraged to give it to patients.

The response from the medical community has been underwhelming. Institutions like the Royal College of Physicians and the British Paediatric Neurology Association have said cannabis should only be prescribed as a last resort, while the UK National Institute for Health and Care Excellence – which effectively chooses what drugs can be funded on the National Health Service (NHS) – have also imposed strict guidelines for prescriptions.

There is only a handful of conditions that doctors will consider treating with cannabis, including multiple sclerosis, epilepsy and to help alleviate the effects of chemotherapy treatment. And when someone is suffering from one of these conditions, doctors are effectively directed to try every other possible treatment before prescribing cannabis.

Recreational cannabis is still illegal in the UK under all circumstances.

UK cannabis exports

While the government’s tone implies it does not have great belief in the medicinal applications of marijuana, a few select firms are allowed to legally grow and produce cannabis. In fact, a report released by the UN's International Narcotics Control Board in 2018 found that the UK is the world’s largest producer and exporter of legal medicinal cannabis in the world.

The UK government doesn’t disclose the list of companies that can legally produce marijuana on British soil, but we do know that only three pharmaceutical cannabis products are licensed in the country. Sativex and Epidyolex are produced by GW Pharmaceuticals, and Nabilone is produced by Eli Lilly & Co. Outside of the medical applications, the UK has also laxed its rules on CBD and hemp oil. Again, these must contain less than 0.2% THC. These oils can be bought legally in the UK, but they have been banned from making any medical claims without obtaining a medical licence, which is expensive to obtain.

This means the majority of those offering CBD or hemp oil can’t claim the products offer any medicinal benefits. This has created a further grey area in the market and has forced many producers to rely on informal marketing techniques, such as word of mouth, to flog their oils.

UK’s indecisiveness on marijuana

It’s clear that the UK government remains undecided when it comes to legalising cannabis. It is quite happy to profit from the vast amounts of legal medicinal cannabis being produced legally by a small handful of companies.

While medicinal cannabis is exported to other countries, it’s still very difficult for UK patients to gain access to the handful of legal treatments available. This highlights contradictions in the government’s policy, which could cause further problems for an industry still in its infancy.

A potential consequence could be inadvertently creating a monopoly among the handful of licensed producers. GW Pharmaceuticals has already become the unrivalled leader in the UK and the fact that it has teamed up with other UK producers, like AB Foods, shows how little competition there currently is.

The stringent rules, high costs and complex regulation means there are high barriers to entry. This could lead to new start-ups setting up shop elsewhere, in more favourable jurisdictions, like Canada. For example, there has been a debate over how UK-based investors can gain exposure to legal cannabis firms at home or abroad, and not fall foul of anti-money laundering laws when receiving dividends or income.

This is also causing companies to delay going public because they fear operating in a grey area of regulation. Likewise, some investors are wary of backing operations that might be illegal.

David Barfoot, director at Rize ETF recently stated that “Due diligence on medical cannabis companies is capital and labour intensive”.

What is the future for cannabis in the UK?

The UK’s approach to medicinal cannabis is more complex than in other nations. While the UK produces and sells medicinal cannabis to other countries, it’s not easily accessible in the UK . The country has taken a tentative step toward legalisation – for now, it has only legalised medicinal cannabis in name.

Legalisation has been featured prominently in electoral campaigns by the likes of the Liberal Democrats and the Green Party. Even the institutions that have so far proved a roadblock to widespread access have changed their views – eg the Royal College of Psychiatrists has said it’s willing to reconsider its view.

Still, there have been concerns that progress in the UK could stagnate, especially with all the political energy that was consumed by Brexit. However, if ignited, the flame could catch quickly. Germany was in a similar position to the UK a few years ago but has now grown into the largest medicinal cannabis market in Europe. Since legalising medicinal cannabis in 2017, Germany has allowed big North American companies, like Aphria and Aurora, to set up shop in the country and cultivate cannabis.

While the UK has established a large production base, it has concentrated it among a handful of businesses, meaning other countries could become manufacturing hubs for the European market rather than the UK. Germany offers both a domestic market and the potential to export, while the UK only offers the latter in addition to the far and few between prescriptions.

The same is true for investors and financiers which, keen to tap into the momentum building before it’s too late, will flee to where the regulatory environment is more favourable.

The opportunity on offer is huge. Prohibition Partners estimates the UK’s medicinal cannabis market could be worth over £7.8 billion by 2028. Plus, estimates show that a recreational market could represent a bigger opportunity, with a forecasted value of £8.5 billion.

That means the total value of a fully-legalised cannabis market in the UK could be over £16 billion within less than ten years.

IG Cannabis Index: trading a basket of stocks

One option for traders keen to capitalise on the rising appetite for cannabis stocks is to take a basket approach. For example, you can trade the IG Cannabis Index, which tracks the top 20 largest publicly listed cannabis companies in North America. This allows you to spread risk and trade the industry as a whole.

Don’t miss your opportunity on cannabis markets

  • Take advantage of volatility in this rapidly growing market:
  • Go long or short on cannabis shares, ETFs or our cannabis index
  • Get 10:1 leverage on our cannabis index, and from 4:1 on cannabis stocks
  • Protect against risk with stops and other tools

Footnotes:
1 The IG Cannabis Index is only available on spread betting and CFD accounts.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Don’t miss opportunity on cannabis markets

Take advantage of volatility in this rapidly growing market:

  • Go long or short on cannabis shares, ETFs or our cannabis index
  • Get 10:1 leverage on our cannabis index, and from 4:1 on cannabis stocks
  • Protect against risk with stops and other tools

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