The recent legalization of recreational cannabis use in Canada poses a unique opportunity for the Australian Government and Australian market to witness the effect that legalization has on the industry and the prohibited substance landscape.
With the legalization of recreational and medicinal cannabis in Canada, sales are expected generate up to $7.17 Billion CAD by 2019. The impact of this legalization is not merely of economic importance however, with 35% of cannabis users surveyed suggesting they would be switching to legal forms of cannabis in the next 12 months.
The impact this legislative change has on the social and economic landscape of Canada provides Australia with a unique case study on the potential affect similar legislative changes may have in Australia.
A forecast of the Australian cannabis extract market alone projects an increase in sales from $52 million AUD in 2018 to $1.2 billion AUD by 2027. It is no secret by now that the legislative pathways for production, cultivation and supply of medicinal cannabis in Australia is hindered by the lack of resources available to the Office of Drug Control who have been inundated with application since the passing of legislation and are currently processing up to 171 new applications.
Whilst the legalization of recreational cannabis in Australia may not be in Australia’s immediate future, the opportunity for the cultivation and extraction of Cannabis materials in Australia is an intriguing opportunity for investments. In January 2018, Australia became one of the few countries in the world, including Canada and Uruguay to allow the exporting of Australian extracted medicinal cannabis products internationally. The Australian product is considered to be of an incredibly high standard with quality control conducted by the Therapeutic Goods Administration. For those companies that are already established in Australia, and are continuing to grow with new and larger manufacturing and extraction plants being established all around the country, the slow development of legalization in Australia is off-set economically by the opportunity to export their product internationally.
Whilst the movement towards easier access to medicinal cannabis in Australia, and in turn recreational legalization may seem slow, a recent survey of Australians showed that 85% of Australian’s now support medical cannabis. A further survey on the recreational use of legal cannabis has seen a 9% increase in support from 2013 to 2016 up to 35%.
With the continued advocacy and proposed amendments furthered by the Australian Green’s party, combined with new developments in Cannabis access, such as the recent opening of a Queenslands first medicinal cannabis clinic in Brisbane, corresponding with clinics in Sydney and Melbourne, a considered attempt to streamline the access to medicinal Cannabis for patients in Australia appears to be prevalent.
The move towards more accessible medicinal cannabis now seems to be supported by both Doctors and the general public, with a recent survey conducted by the University of Sydney stating that 61.%% of GP’s reported that one or more patients had inquired about the possibility of medicinal cannabis in the months leading up to the survey and further that 58% of the GP’s were in favour of prescribing medicinal cannabis.
Whilst the medicinal cannabis market in Australia still finds it’s footing, an opportunity has presented itself to policy makers as well as the Australian market and public to be challenged by the developments in the Canadian market and learn valuable lessons in the interim. The slowly developing conservative market is gaining support from all levels of consumer and supplier and the excellent quality of the Australian product has enabled Australian Cannabis companies with an export license the opportunity to continue to grow whilst the market waits for the government to catch up with changing social and economic trends.
In the past financial year, the first evidence of the growing Australian domestic market became apparent to investors with the Canngroup becoming the first Australian company listen on the ASX to post a profit from the sales of medicinal cannabis alone. As the market continues to grow, it is likely CannGroup will be joined by many others in the next financial year. The opportunity for the Australian export market seems limitless with the exponential growth of cannabis use worldwide. It is expected that this opportunity will support many companies whilst the Australian legal and political landscape catches up to the rest of the world.
By Joplin Higgins -Country Manager for TheraCann Australia.
For more information on the Cannabis Industry in Australia and our services, please contact Joplin Higgins, Country Manager for TheraCann Australia.