PROPOSALS have been put forward for a new medical cannabis cultivation and research facility on the Isle of Man by industry entrants Peel NRE.
Infrastructure, transport and real estate investment group Peel launched a consultation into the ambitious project earlier this month, inviting the public to help shape its plans before it submits the application process to the local government.
The project will be Peel’s inaugural foray into the cannabis industry, pointing to a wider shift in sentiment from larger corporations, an increasing number of which now recognise the financial opportunities it has to offer.
In particular it speaks to the opportunities represented on the Isle of Man, which recently changed its legislation with the aim of positioning itself as a leader in cannabis cultivation and production.
Peel’s First Cannabis Project
Though Peel has extensive experience in building infrastructure, owning and managing a total 12m sq ft of property across the UK, it is coming into the cannabis industry cold.
It’s strategy instead is to use its significant capital expenditure reserves to simply buy in the expertise it needs, including consultancy firm The Canna Consultants who drafted the cannabis legislation the Isle of Man Government enacted last January.
It’s co-founder Stephen Oliver, who has been working closely with Peel on the proposals, said that the ‘biggest barrier for getting into cannabis is that the capex cost of actually creating a GMP accredited environment.’
He continued: “They know what their limitations are. They know they’re very, very good at construction, energy provision and most importantly project management, where there are industry specific gaps in their knowledge they recruit that knowledge at the highest level.
We are bringing other partners that will be announced shortly. We’re in talks with a NASDAQ listed company who’ve been involved in 400 cultivation sites across the globe, the vast majority in Canada and North America. So we’re bringing in the best people with the best track records.”
It’s not yet clear whether Peel will choose to run this facility by themselves, adding another arm to their extensive portfolio, or whether they will simply provide the infrastructure for a third party to manage.
Mr Snowdon said that ‘both options are available’ at this point, adding that ‘the facility we are promoting could easily be occupied by a range of cultivators (including Peel NRE) and cannabis-related research companies or a single company.’
Beyond this initial venture, Peel says their interest in expanding further into the cannabis industry will depend on how this facility performs, stating it ‘would be keen to apply the experience gained from this development to other opportunities should they arise’ in either the Isle of Man or elsewhere in the UK depending on ‘market conditions’.
A Product of Changing Market Sentiment
A multi-million pound investment into the cannabis market from a complete newcomer marks a significant step-forward for an industry which has so far struggled to secure institutional investment and be viewed as a legitimate opportunity by big business.
This shift in sentiment has been aided by ‘havens’ like the Isle of Man, which has opened its doors to new markets like cannabis to energise its economy, while seeking to maintain the same stringent checks on quality to ensure its place in the international market.
Following a 2019 island-wide consultation in which 95% of all respondents voted in favour of allowing the growing of cannabis for medicinal purposes, the Crown Dependency enacted legislation in January 2021 allowing licence holders to grow cannabis based products.
Mr Snowden said that both Peel and the Isle of Man Government recognise the ‘opportunities that a flourishing medicinal cannabis sector could bring to the Island’s economy’, opportunities that Peel ‘were keen to seize’.
A key part of attracting large corporations to the island, according to Mr Oliver, is ensuring the production is underpinned by a ‘solid regulatory framework’.
Though the Isle of Man is providing an ‘easier route to market than the UK Home Office’, all exports from the island will still ‘go through the UK framework’, meaning that the same stringent quality assurances are put in place.
“It’s great that companies like that are getting involved… I think it’s becoming more acceptable primarily from a corporate reputation and a PR perspective, and I also believe there is some very, very positive PR to be gained.
“I think there’s stability on the Island and I think the risk has reduced now and that we are seeing more harmonised laws. This allows companies to flourish in a very structured environment, what no one likes is uncertainty.
“And what we’re seeing now is more certainty. You’ve got developing markets and you’ve got the demand. We know what the quality requirements are that has been a major issue for the medicinal industry, and still is. Now we’ve got these safe havens where competent market entrants can develop responsibly.
“What we’ve got now is a true medicinal market emerging, which is built on a very solid regulatory foundation and I think that makes it attractive for big corporations.”
The plans have been proposed by Peel NRE, a subsidiary of the larger multi-billion pound group focused on clean energy and environmental projects.
Following the public consultation, which will last between Monday 14th February and Monday 7th March 2022, Peel NRE aims to submit a planning application for the first phase of a ‘science innovation and research centre, sustainable energy park and medicinal cannabis facility’ in Spring this year.
The first phase of the project will include two units for the cultivation facility alongside an access road and preliminary landscaping on the site, situated at Cooil Road in Braddan.
The rest of the project, including further cultivation facility units, the science innovation and research centre and solar farm generating 11-14MW to help power the site will also be submitted as part of the ‘hybrid application, but a further planning application will be required on the next phase before building can commence.
The newcomer’s design will reportedly be based on ‘innovative technologies found in cannabis facilities across the world’, and focus on being as sustainable as possible from the outset.
Peel NRE’s Planning and Development Manager Stephen Snowdon told BusinessCann: “We are in discussions with several of the top North American mechanical & electrical (“M&E”) and process optimisations consultants serving this industry.
“We are focusing on building atmospherics, security provision and plant growth & nutrient systems. We hope that by developing these facilities the related technology, knowledge and skills can make a rapid contribution to the Island’s economy.”
While no solid estimates on the cost of the facility have been given, Peel says it expects it to contribute between £90m and £180m to the local economy, while creating dozens of new jobs on the Island.