Australia is tipped to become a potential leader in the booming global market for medicinal cannabis, due to the country’s high therapeutic goods standards and ideal climate.

Although Australia’s medicinal cannabis industry is currently valued at just under US$200 million, researchers suggest this will grow at 40% per annum for the next five years.

That’s higher than the global rate of growth, which has seen the medicinal cannabis market expand at 25% per annum, with analysts predicting it will reach a size of US$67 billion by 2028.

Much of the growth in the domestic industry is expected to come from the export market, according to The Green Fund editor in chief Hugo Gray.

Speaking to investment news outlet Stockhead, Mr Gray said Australia’s wealth of experience in the agro-pharmaceutical sector, strict regulatory environment, and suitable climate position Australia well to capture a portion of this significant market.

Mr Gray added that Australian producers’ adherence to the Good Manufacturing Practices (GMP), outlayed by the Therapeutic Goods Administration (TGA) will help differentiate products produced locally from overseas rivals’.

The GMP regulations are designed to preserve the high quality of Australian products, and work on the premise that quality “cannot be tested into a batch of product.” 

“Quality must be built into each batch of product during all stages of the manufacturing process,” the TGA’s website notes.

Intense competition in 2021

Australian medicinal cannabis research house, FreshLeaf Analytics’s latest industry report found the first half of the 2021 fiscal year was “defined by intense medicinal cannabis product competition”.

Revenues have doubled (up from AUD$100 million last year) and the number of patients using medicinal cannabis has grown by a factor of 15 times.

FreshLeaf expects as many as 75,000 patients could be using these products by the end of 2021 in Australia alone, up from only 3000 two years ago.

Australian business set to launch over-the-counter products

Soon to be relisted Wellnex Life is one of the growing pool of Australian businesses looking to tap into the burgeoning medicinal cannabis market.

The company, which already manages a portfolio of over 15 health and wellness brands, has signalled plans to introduce cannabidiol (CBD) products following changes to TGA regulation allowing these products to be sold over the counter.

Those changes were enacted in December 2020, and saw low-dose CBD products down-scheduled from Schedule 4 (meaning customers need a prescription) to Schedule 3 (pharmacist-only medications).

Wellnex Life, via its recently acquired business Brand Solutions Australia, is in advanced discussions with domestic and overseas partners to commercialise its own brand of CBD products for distribution into the domestic market in late 2022/early, 2023 subject to all regulatory approvals being granted. 

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Wellnex Life is the proposed new name change for Wattle Health Australia Limited

Sources:

• Stockhead: As medicinal cannabis rockets globally, here’s how Australia can become a production powerhouse
• Stockhead: Why Wattle Health is primed for growth in the wake of its BSA acquisition, with CEO George Karafotias
• Australian Department of Health: Good manufacturing practice – an overview
• Australian Department of Health: Over-the-counter access to low dose cannabidiol
• FreshLeaf Analytics: FreshLeaf reveals medicinal cannabis report
• Hospital Health: FreshLeaf reveals medicinal cannabis report