As part of research at the University of Cambridge Institute for Sustainability Leadership, we developed and sent out a survey to a hundred key stakeholders in the global medicinal cannabis industry.

Participating stakeholders were chosen from our network due to their proximity to operations within an organisation, and/or their direct involvement in cannabis industry sustainability action, and a self-administered environmental social governance (ESG) questionnaire was sent out to each of the consenting participants.

We are very grateful to all that have taken part, and owe a debt of gratitude for our respondents’ commitment during this uniquely challenging time. In return, we are committed to deeply analysing feedback and sharing our results, including our next steps and specific actions we will take in 2021. 

The range of survey respondents was geographically broad, located across Europe, Asia, Australasia, and North & South America, and 16.7% of respondents were medicinal cannabis patients. Most of the respondents (70.5%) were decision makers in professional positions of management. See the mix of backgrounds represented here:

Industry Stage
To better understand how the medicinal cannabis industry can become sustainable in the long term, it is useful to look at the current industry stage and it’s corresponding pressures. Theory on industry life cycle dynamics explores the phases of growth that industries face from company entrance to exit. Here’s Carlota Perez’s 2003 model:

Respondents were asked which stage of Perez’s (2003) model best suited the medicinal cannabis industry. One respondent pointed out that the different interpretations of which particular phase can be understood due to the wide range of different regional regulations, however the vast majority chose an installation phase, indeed 37.9% believe we are in a frenzy, with only 18% viewing deployment phases as appropriate.

Therefore we can assume emerging industry characteristics, where financial pressures from increased competition dominate, often leading to a crash, before recovery. Indeed 34.5% believe we are at such a ‘turning point’, prior to the financial sustainability of a mature industry.

Industry Sustainability
Regarding social and environmental sustainability, respondents believe that more is needed at an industry level. Indeed, as shown below, only 15% saw the industry as very sustainable.

Furthermore the vast majority (90.2%) agreed with the statement that ESG issues had been neglected by the industry. The most common reasons selected were due to the short-term outlook of the industry (51.9%), a lack of effective regulations (48.1%), poor business practices (30.8%), and a lack of industry resources (26.9%).

However, stakeholders do see opportunity in social and environmental initiatives, with only one respondent perceiving there to be no business potential in addressing sustainability issues.

Indeed, companies are starting to act accordingly, as shown by the following graphs depicting increasing emphasis on scales of 1 (little) to 5 (alot).

A good way of implementing said action, and increasing industry transparency, is through sustainability reporting. Such frameworks allow companies to demonstrate the impact they are generating, and measure their effectiveness, which helps in maximising resources. As 29.8% of respondents were unsure what sustainability reporting is, the first place to start is by spreading the word! Find out more about the GRI or SASB here.

ESG Assessment

To explore potential areas for business action, an industry specific literature review was conducted by Aidan, our sustainability lead, applying an ESG lens to the industry to define the key themes and risks that should be addressed first. These were found to be:

Environmental:

  • Carbon footprint, primarily due to electricity requirements of indoor cultivation (O’Hare et al., 2013) (Mills, 2012) (Warren, 2015) (Yip, 2020)
  • Waste management (Thompson et al., 2014) (Gabriel et al., 2013)
  • Water use practices, including supply (Bauer et al. 2015) (Chouvy, & Macfarlane, 2018)

Social:

  • Marginalisation of those affected by the illicit-market (Alvarez et al., 2016)
  • Restricted patient access to medicine (Nutt, 2019) (Hurley, 2019)
  • Lack of patient supervision and care (Nutt, 2019)
  • Lack of evidence and education, which can potentially result in harmful use (Humphreys & Shover, 2020)
  • Adverse health effects of products (Humphreys & Shover, 2020)

Governance:

  • Sub-optimal working conditions, including occupational hazards (Victory et al., 2018) (Couch et al., 2019) (Sussman et al., 2020)
  • Underrepresentation of women and minorities (Valleriani et al., 2018)
  • Regulatory non-compliance & corruption (Jiang, 2018)
  • Lack of transparency and accountability (Chowdhury & Lishman, 2018)
  • Lack of effective standards (Parker et al., 2019) (Humphreys & Shover, 2020)

Respondents were then asked to determine how pressing they found each issue on a scale from ‘not-pressing’ to ‘most-pressing’…

The key finding was the emphasis the respondents put on issues that directly concerned patients. ‘Restricted patient access to medicine’, ‘lack of patient supervision and care’, ‘lack of evidence and education’, were most frequently selected as ‘most’ pressing.

Environmental and governance issues were often perceived to be ‘generic’ across all other industries. Although there may be reporting bias as respondents were industry insiders, feedback can be summarised in one respondent’s quote: “The main focus is the patients, the first priority for all should be amending this and then we can work on the aforementioned issues”. Without patients, there is no industry.

So what are we doing?
We, at Alta Flora are conscious of, but not surprised by these findings, and believe in the power of technology in addressing them.

Indeed, in 2019, we strongly felt that the perceived lack of scientific evidence and clinically valid data is one of the main barriers for decision makers and prescribers that must be overcome to enable access to medical cannabis for patients in the UK. With that in mind and through our many, many conversations with patients (both in the UK and further afield) we set about creating and building Eva.

Eva is an app designed to empower people to take back control of their health, immunity, quality of life and longevity. Eva provides an easy way for you to track and monitor: your symptoms, consumption of your medicine, and their impact on your quality of life. It enables patients to have data driven conversations with their doctors, and provides evidence bases for the development of healthcare systems.

Furthermore, it seems our respondents were in agreement, for when asked ‘How can IT (information technology) play a role in the deployment of sustainability in the medicinal cannabis industry, if at all?’ The top three answers, (with considerable backing) were:

  1. In the development of evidence bases 78%
  2. Improving patient use through education 71.2%
  3. Increasing patient access to medicine 62.7%

As for the rest?
We further believe that the other ESG challenges identified above, if properly tackled, can elevate the cannabis industry to grow better and hold up in the face of its challenges for the benefit of the patients that rely on its success in the long term. We are an early stage start-up, however we place a high importance on baking ESG, good practices and ethics into our company DNA and all that we do. We have invested a sizable portion of our funds into a number of sustainability and social purpose initiatives to date, because we strongly believe that we all have a part to play and ought to go beyond mere compliance to the best of our abilities. See more in our intro post in sustainability series here.

Thanks for taking the time to read this, and we look forward to keeping you in the know as we continue on our mission.