Proposed AIM Flotation and Placing

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May 15, 2001

GW Pharmaceuticals ("GW" or "the Company"), a pharmaceutical company developing an innovative range of prescription medicines that harness the medicinal benefits of cannabis, announces that it is planning to seek admission to the Alternative Investment Market of the London Stock Exchange.

GW is a pharmaceutical group developing a portfolio of prescription medicines derived from cannabis to meet patient needs in a wide range of therapeutic conditions, including Multiple Sclerosis, Cancer Pain and Rheumatoid Arthritis.

The Company's lead product (for Multiple Sclerosis) entered large scale Phase III clinical trials in May 2001. The Phase III trials programme is the final pivotal stage in preparing for an application to be made to the Medicines Control Agency ("MCA") for a Product Licence Approval. Products for several other markets are in Phase II clinical trials. The market opportunity for GW's products is substantial.

GW is developing non-smoked prescription medicines that will be delivered by pharmaceutical drug delivery technologies, including a sub-lingual (under the tongue) spray, a rapidly dissolving sub-lingual tablet and an inhaler.

GW is seeking to raise approximately £16 million (gross) by way of a placing to institutional investors to: fund the expansion of its late stage clinical trials; expand its cultivation and production facilities in anticipation of the initial commercial launch of its products; and, accelerate the Company's international research activities in Europe and North America. The Company is expected to have a market capitalisation of approximately £140-£170 million, including the £16 million gross proceeds, and it is anticipated that admission to AIM will take place in late June 2001. No existing shares are being sold as part of the flotation. To date, GW has raised approximately £12 million from private investors to fund its research activities.

Cannabis has a long history of safe and effective medicinal use. GW's medicines are derived from standardised whole extracts of proprietary cannabis plant varieties bred by the GW group to provide a pre-determined content of selected cannabinoids, the molecules unique to the cannabis plant. Cannabinoids have been shown to have analgesic, anti-spasmodic, anti-convulsant, anti-tremor, anti-psychotic, anti-inflammatory, anti-emetic and appetite-stimulant properties.

To date, patients suffering from Multiple Sclerosis, Spinal Cord Injury and Rheumatoid Arthritis have entered GW's clinical trials. Experiences of such patients have been positive and benefits recorded include relief of pain, spasms, spasticity and bladder-related symptoms.

GW's development programme has the support of the UK Government and governments in North America and Europe. The UK Government has stated repeatedly that it will permit, subject to approval from the MCA, cannabis-based medicines to be made available on prescription.

The Directors of GW believe the Company has a strong competitive position worldwide in relation to cannabis-based medicines. They believe it is currently the sole producer of pharmaceutical grade cannabis plant materials under licence in the world.

The GW group was founded in early 1998 by Dr Geoffrey Guy. Shortly thereafter, Dr Guy was joined by Dr Brian Whittle, thereby reuniting the team that previously co-founded the company which became Phytopharm plc, the plant medicines company that floated on the Official List in April 1996. The GW group operates under licences granted by the Home Office to cultivate, produce, possess and supply cannabis for medical research purposes. The Company maintains control over all aspects of the product development process from botanical research, cultivation, extraction and formulation into drug delivery technologies, through to clinical trials, regulatory affairs and manufacture.

Dr Geoffrey Guy, Executive Chairman, commented: "Cannabis has a long history of safe and effective medicinal use. Prescription cannabis-based medicines offer hope to many thousands of patients for whom existing treatments have proved ineffective. Patients in GW's clinical trials have reported a range of significant benefits and we now aim to expand our research and development activities with a view to providing medicines for sufferers of Multiple Sclerosis, Cancer Pain, Rheumatoid Arthritis, Spinal Cord Injury and other neurological disorders.

"Flotation will enable GW to take the next step in developing what began as a patient driven proposition with considerable government support into a full service pharmaceutical company capable of establishing a position in several large markets. The flotation proceeds will allow GW to fund the first pivotal Phase III trials programmes and to establish production facilities in anticipation of the first market launch of its products. The proceeds will also enable the Company to continue expanding product development activities both in the UK and abroad."

- Ends -

Enquiries:

GW Pharmaceuticals  (15/05/01) 020 7601 1000
Geoffrey Guy, Executive Chairman  (thereafter) 01980 619 000
Justin Gover, Managing Director  

Square Mile BSMG Worldwide  020 7601 1000
Susan Ellis/Kevin Smith

This press release constitutes an investment advertisement for the purposes of Section 57 of the Financial Services Act 1986. It is issued by the Company and its contents have been approved for the purposes of that Section by Collins Stewart Limited, which is regulated in the conduct of investment business by The Securities and Futures Authority Limited.

For the purposes of this press release Collins Stewart Limited is acting as financial adviser to the Company and no one else. In approving this advertisement Collins Stewart Limited has relied on information supplied by the directors of the Company. If you require advice in relation to this press release you should contact your solicitor, accountant or other professional adviser under the Financial Services Act 1986.

The offer for securities in the Company will not be made, directly or indirectly, in or into the United States, Canada, Australia, the Republic of Ireland or Japan. Accordingly, copies of this press release are not being and must not be mailed or otherwise distributed or sent in or into or from the United States, Canada, Australia, the Republic of Ireland or Japan and persons receiving this press release (including custodians, nominees and trustees) must not distribute or send it into or from the United States, Canada, Australia, the Republic of Ireland or Japan.

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