GWP FLOTATION RAISES POUNDS 25M FOR CANNABIS DRUG RESEARCH

GW PHARMACEUTICALS, the worlda TMs only licenced producer of cannabis for
production of medicines, yesterday raised Pounds 25 million in a stock
market flotation, Pounds 9 million more than expected.

The flotation on the Alternative Investment Market values the business,
formed only in 1998, at Pounds 175 million and the 27 per cent stake held
by founder and executive chairman Dr Geoffrey Guy at Pounds 47 million.

The Salisbury-based group has placed 14.3 per cent of its equity with
institutions, up from the 10.5 per cent originally planned, after the offer
was six times oversubscribed.

This is raising a net Pounds 23.5 million after costs, which will be used
to help fund the expansion of clinical trials for its growing portfolio of
medicines.

It will also pay for an increase in production of cannabis, up from 15
tonnes annually at present to 100 tonnes.

Justin Gover, the managing director, said production of the cannabis plants
was carried out in rented greenhouses at secret locations in southern
England. GW said it was currently in crucial phase three trials of its
cannabis-based treatment for multiple sclerosis, and the drug was due to be
submitted for approval by regulators in 2003.

The drug eases the primary symptoms of the disease, including pain from
nerve damage, rather than cures it.

The drug is taken using a spray under the tongue.

Around 2.5 million people suffer from MS worldwide, of whom around four per
cent in the UK at least are believed to use cannabis illegally.

Use of the drug became illegal in the UK in 1925.

Other applications which GW is currently actively researching include
cancer pain and rheumatoid arthritis.

The group believes its medicines could go on sale in Britain early in 2004.

The expansion will eventually mean a doubling of staff numbers from 60 to
around 120.

Trading in the shares, which were priced at 182p per share, start on AIM on
28 June.

Around 47 per cent of the shares are held by directors, with Gover holding
about four per cent. The rest is held by roughly 140 individuals who have
helped fund the company.