Australia's Cannabis Industry
Cannabis comes in many different forms and has over 1,200 different slang terms, and more than 2,300 names for individual strains.
50 years ago, Cannabis was looked at a drug that will give you “reefer madness”. In 2019 everyday Australians are looking at this Green Gold as their path to financial success.
As of 2019, Australia’s almost $2b Cannabis industry is made up of entrepreneurs, doctors, big-pharma, retail, agriculture, import/export trading and more.
We’re going to summarise different areas of Cannabis and the industry in Australia and its potential future growth.
A Brief Australian Cannabis History
Cannabis plants are used in Australia for recreational and medicinal treatments. National surveys report that one in three Australians over the age of 22 has tried Cannabis, and over 1 million has used it in the past year.
In 1914, Cannabis was defined as a drug in the US, under the Harrison Act. Then defined as a drug in Australia after signing the 1925 Geneva Convention on Opium and Other Drugs.
Even though Europe and North America pushed for medicinal use of Cannabis since the 80s and 90s, Australia is a late adopter that is playing catch with its western nation counterparts.
Australia’s 2019 Cannabis Situation
Now fast forward to the 24th of February 2016, and we have Medicinal Cannabis legalised at a national level. Then on the 25th of September 2019, the Australian Capital Territory passed a bill to make the ACT the first to legalise Marijuana.
The regulations, distribution and legal framework always takes time after these bills are passed. Below we run through of Australia’s first Cannabis milestones:
- The first federal license to cultivate Cannabis in Australia was awarded to Cann Group in 2017
- The Special Access Scheme guidelines for Health Practitioners was released in September of 2017
- The first Cannabis Clinic was opened in Sydney, Australia in July of 2018
- The first large-scale medicinal Cannabis farm opened by Medifarm in South East Queensland in August of 2019
- The first region to legalise (decriminalise) the recreational use of Cannabis is in Canberra, The ACT, Australia in early 2020
There are three main categories of patients being approved for medicinal Cannabis by the TGA Special Access Scheme:
- SAS Category A: patients defined as seriously ill (No TGA Approval Required)
- SAS Category B: patients recommended by their health practitioner that do not fit into Category A (TGA Approval Required)
- SAS Category C: therapeutic goods that health practitioners can supply where there is a history of established use (treatment of allergies, diabetes, nausea etc.)
As of the 30th of June 2019, the total number of medicinal Cannabis prescriptions in Australia has exceeded 10,000.
In the greater scheme of things, 10,000 isn’t a large number, but it has a snowball effect. Within the next 2-4 years, patients prescribed Medicinal Cannabis is supposed to rise to 150,000.
For an industry that supports medicinal Cannabis with only 10,000 prescribed patients hitting $2b is raising some eyebrows. The Greens party are pushing for full legalisation of Cannabis and turning Australia into an international leader for import and export of this medicine.
South Korea, Japan and Vietnam have or are proposing legalisation of medicinal Cannabis. Australia is in a perfect position to export to nations without the knowledge or land to cultivate medicinal Cannabis products.
Australia may be too late to cash in on the Silicon Valley “tech gold rush”. But we are at the start of an international emerging Cannabis industry that is ripe for disruption. Becoming a global leader of Cannabis products and medical research that is still limited “primitive smoking” and vaping.
How To Get Rich With Cannabis In Australia?
This may be a bold statement, but it’s one of the trending search topics on Google in Australia and Canada. With billions being invested in this industry, Cannabis entrepreneurs are looking to educate themselves on where they can strike it rich.
We’re going to break this down into a few sections to make it more digestible. This will explain how an industry with an estimated 10,000 medical Cannabis patients can be valued so high.
Where Is The Money Coming From?
Canada is leading the world with Cannabis cultivation, trade, pharmaceuticals and recreational products. As soon as medicinal legalisation went through in 2016 in Australia, Canadian companies have started to invest in the farming and distribution of Cannabis in Australia.
Cannatrek was one of the first Canadian companies to invest in Victorian startups in 2016. Bringing an estimated $30 million to expand Cannabis production and manufacturing in Victoria, Australia.
Cann Group is Australia’s second-largest Cannabis company with a Market Cap of over $260m. Manufacturing and distributing medicinal Cannabis products to Australia and the world. The largest shareholder is Canada’s Aurora Cannabis.
Althea is another Australian Cannabis company that educates and distributes medicinal Cannabis to Australians. They are also focusing on the local Australian production of therapeutic Cannabis goods. Althea has partnered with Aphria, a Canadian company with a market cap of AUD$2.5b.
If you take a look behind the scenes of every scaling up Cannabis startup in Australia, you will find shareholders, partners and founders from Canada. Bringing a wealth of knowledge, experience and investment to fast track Australia’s Cannabis industry.
Farming Medicinal Cannabis
To cultivate and produce medicinal Cannabis in Australia, companies require a federal license. These licenses are given out sparingly and are under heavy regulation. The barriers to entry are high and extremely expensive for any entrepreneurs looking to acquire one of these licenses.
Medifarm has opened up a Cannabis farm in South East Queensland in 2019 that employs 40 people. Producing 1.2 tonnes of Cannabis so far (est. capacity to cover 3000 patients). Medifarm is looking to become Australia’s leading local producer for medicinal Cannabis products.
Cannatrek is the leader of Cannabis cultivation in Victoria, Australia. Cannatrek has the green light to develop a $160 million Cannabis farm in regional Victoria. The Cannabis farm is estimated to produce 160 tonnes of medicinal Cannabis each year (est. capacity to cover 400,000 patients).
Local Government Areas are putting their hands up to co-invest and collaborate in these Cannabis farms. These dramatically speeds up the processing time for licenses and gets local communities more involved in growing local economies.
Distribution Through Retail
Cannabis Clinics are currently Australia’s standard for the retail distribution of medicinal Cannabis products. The first of these opened up in 2018 and most aim to streamline the patients prescription of medicinal Cannabis.
These clinics are found in every state in Australia. They work closely with Australia’s Special Access Scheme and the TGA to provide patients with safe and legal prescriptions of medicinal Cannabis.
The clinics combine health practitioners and retail Cannabis dispensaries into one location. The basic process is: Patients are referred by their local GP to these clinics The first consultation determines a patients eligibility If applicable, the clinic will submit the TGA approval request form Then the clinic will prescribe and supply the medical Cannabis
CA Clinics is the most popular and professional clinics in Australia. Located in Sydney, Perth, Gold Coast and more, it aims to become the standard for Cannabis Clinics in Australia.
Cannabis Doctors Australia, based in QLD, have clinics across Australia. They offer in-person consultations and “telehealth” remote consultations for patients in regional areas.
Emerald Clinics are also available across Australia, focusing on supplying Cannabis as a Therapeutic medicine. They focus on bringing the best and brightest health practitioners that specialise in cannabinoid treatments into one clinic.
Medicinal Cannabis Products
There’s an old saying “when there’s a gold rush, sell shovels”. Rather than opening up clinics, Australians are looking for ways to make money off all the other people that are jumping on the bandwagon for the “green gold rush”.
Compared to North America, the variety of medicinal Cannabis products in Australia is limited. Patients are currently being prescribed Cannabis oils and tinctures.
In North America, you will find medicinal Cannabis in the forms of edibles, oils, buds, pills, sprays and more. Industry is also booming selling accessories from vaporisers, cooking kits, storage kits and growing kits.
Online stores are making a killing selling prescription and recreational Cannabis goods in North America. The Mega Marijuana Store is a legal North American online retailer that supplies products to over 1 million customers.
Even though medicinal products are the key focus now, the future potential is endless. Innovation is farming, pharmaceuticals, retail, and Cannabis products and accessories are what businesses are focusing on.
The current industry is built on the future legalisation of Cannabis. Australia and New Zealand are gearing up for a referendum on recreation Cannabis in 2020.
This Legalisation of Cannabis in Australia will create a much-needed economic boost. The hype is real. People are looking away from Tech and Crypto and towards Australia’s new Green Economy.
James King
James is an experienced writer and legal cannabis advocate in Australia. He answers all the questions about business, legalisation and medicinal cannabis.
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