GW said regulators, who had asked for more data on its experimental drug Sativex in December, had turned down its appeal against this decision and that results of a new clinical trial would not be available until the spring of 2006.
Julie Simmonds, an analyst at Nomura, said the delay could mean GW will have to raise money over the next year, as it would now no longer get a 14 million pound payment from partner Bayer AG, due on UK regulatory approval.
At 0751 GMT, the shares were down 14.7 percent at 81-1/2 pence, after touching a near 3-year low of 81p.
The stock, which floated at 182 pence in 2001, had already fallen heavily this week on a report from online medical agency Agence de Presse Medical that GW would lose its UK appeal.
Although Sativex is approved in Canada for the relief of neuropathic pain in multiple sclerosis, UK officials said in December they wanted more evidence about its efficacy when used to relieve spasticity.
Sativex was initially expected to be approved in Britain by the end of 2003, but has suffered numerous delays. The under-the-tongue spray is GW's most advanced product.