Why a cannabis company invests in a group of MPs - and the unusual way it works

If an organisation wants to see changes to the law or government policy, how do they go about trying to make that happen?

The answer for a growing number of businesses, trade groups and charities is by providing funding to an all-party parliamentary group (APPG).

One company, Tenacious Labs – which hopes to amend legislation and regulations around the sale of cannabis products – told Sky News it has seen “enormous value” from its investment in an APPG.

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What are APPGs?

Many voters will never have heard of these informal cross-party groups of MPs and peers who come together to discuss shared topics of interest, hold inquiries and publish reports.

But analysis as part of the Westminster Accounts project by Sky News and Tortoise Media has shown they are a growing part of the UK political ecosystem.

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The number of APPGs has almost doubled since 2015, and they have received more than £20m in support from external sources since the last election.

APPGs do not receive any funding from parliament but are allowed to accept donations from outside – in many cases this comes in the form of a benefit in kind, where a public affairs firm or lobbying agency provides a secretariat to assist MPs with the administration of the group.

Usually, the organisations providing the secretariat are themselves funded by other sources, which are duly declared in the APPG register.

But in the case of the APPG on CBD (cannabidiol) products, the secretariat for the APPG is provided directly by a single company.

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Changing the law on cannabis

In November 2021, the APPG for CBD products was founded, chaired by Tory MP Crispin Blunt, with the aim of “encouraging the development of UK regulation on CBD products”.

On its website, the APPG says its goal is create a “certain basis for investors and entrepreneurs to safely serve the public and wider national interests” when it comes to commercial opportunities around non-medicinal cannabis.

The APPG is funded entirely by Tenacious Labs, a company that moved its headquarters to Jersey due to its concerns that UK law currently means companies investing in cannabis products risk falling foul of proceeds of crime legislation.

The company has provided £25,500 in secretariat services to the APPG since its creation and is a rare example of a private company running the secretariat of an APPG itself, rather than through a public affairs or lobbying agency.

Tenacious Labs chief executive, Nicholas Morland, told Sky News that his company believes changes to the law around the sale of cannabis and CBD products – from face creams and packaging to drinks and legal adult recreational use – would open up a new sector in the economy and create up to half a million jobs in rural areas of the UK.

He said: “We operate in the US, in Colorado and Florida, and over here. As a commercial business, access to funding is almost the most important thing of all.

“To achieve proper access to funding, we’d like to be able to list in London and talk to banks and lawyers and the rest of it without them being concerned about things like proceeds of crime in what is one of the fastest and most exciting growing industries worldwide. It is being legalised country by country, and we’re a UK-based business, and we’d like to be able to operate in the UK.”

Explaining why the company chose to invest in an APPG, Mr Morland said: “We did our research. The political decision about whether or not you can buy CBD face cream in Tesco is not up to the Home Office, or the FSA or DEFRA.

“It’s up to politicians to decide whether or not they think it’s appropriate for the country to have an industry like that … it became clear that it was something that required political change.”

Mr Morland told Sky News he believed there were three routes available to a business hoping to change political policy.

The first, he said, was by trying to build “popular acclaim” for the cause, perhaps by using an expensive advertising or communications agency to help generate media coverage and positive public sentiment resulting in politicians adopting a position, putting it in a manifesto and winning an election.

The second he identified was “lobbying, where you shared a flat with people 25 years before” and were able to influence decision-makers through personal networks.

“I’m not suggesting that there aren’t good people in both those areas – mostly they are,” Mr Morland said.

“But of the three routes, the all-party parliamentary groups are the one with the most well-developed, mature checks and balances.

“You’ve got multiple party involvement. You’ve got people who are experienced backbenchers. You’ve got to have that engagement.”

He added: “They have a very clear, transparent process around them. And they allow people like us to engage formally with government without knowing who’s who and where and what to say and where to go. They are an open forum. Anyone can go.”

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How are APPGs formed?

APPGs must be formed by MPs and peers, with at least one officer from the governing party and one from the official opposition. At least one of the chairs must be an MP. The chair is also responsible for the APPG’s compliance with parliamentary rules.

Describing his experience as being involved in the process of forming an APPG, Mr Morland said: “What you have to do is you have to persuade some MPs or officers, five of them, that it’s of sufficient interest to them, that if you do a bunch of grunt work to supply them with the heavy lifting, that they’re prepared to spend some time on it.

“So we then went in and saw a bunch of people and said, look, it’s a bunch of jobs. It’s a whole new industry.”

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He added: “It’s a massive benefit to the economy and it’s something that politicians we think should be interested in. And what we found when we spoke to people is they were.”

Describing the reaction of MPs when the prospect of the APPG was discussed, he said: “So first, [they were] sceptical, then some really quite sharp questions, followed by, ‘okay, sounds like 500,000 jobs – what do you think we should do?’ Which basically boiled down to us as the secretariat working for them, as it’s their APPG not ours, and they make that very clear as we go along.

“[Our role is] providing them with sensible first drafts for a discussion to happen around. And that’s our job. We work for the APPG. We’re not the tail wagging the dog.”

Mr Morland said the company was getting “enormous value” from its investment.

He told Sky News: “Almost from the beginning, what we found was that the cabinet and places like that and the parliamentarians, once they found they had people who could come back with suggestions, started feeding in, in effect, our requirements.

“So [the politicians] turn around and say, look, we need a business plan. Have you thought about carbon credits? We’ve got an issue with DEFRA. We’ve got money that was previously going to the EU. Where’s our post-Brexit dividend from it? So what we found is we got our instructions sometimes fully explained and sometimes explained only as far as they could because it’s still party political. But at our end, it didn’t matter because our argument is economic.”

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Buying influence?

Asked why Tenacious Labs’ role as sole backer of the APPG did not represent a commercial interest buying influence with parliamentarians, as the Standards Committee warned about in a report last year, Mr Morland suggested it would be a mistake to over-police an area where there was some transparency, rather than focus on the more opaque areas of lobbying:

“I appreciate it’s very topical, and I also appreciate that it’s tempting to double down on checks and balances where they’re working best rather than when they’re not working at all,” he said.

“The all-party parliamentary groups, where they are run properly and taken seriously, are extremely effective. And the existing checks and balances from what we’ve seen, work.”

But some involved in the lobbying industry have told Sky News they have concerns over APPGs where the support comes from a single backer.

Liam Herbert, who chairs the public affairs group at the Public Relations and Communications Association (PRCA), said: “The potential problem is where you have an organisation that might be promoting one single issue from their point of view alone. That’s not the purpose of an APPG.

“The purpose of an APPG is to inform parliamentarians about a wider issue. So if you take one, your sole area of interest, and promote that through an APPG, that’s not very democratic, it’s not very clear and it’s not very transparent.”

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