2018 was a trailblazing year for the cannabis industry. The Australian government gave the legislative green light to marijuana exports, which many experts saw as a move to dominate the international market.
A study conducted by New Frontier Data also estimated that the potential size of Australia's nascent local cannabis market may exceed $5 billion annually. According to the report, black market sales are worth at least $4.5 billion per year, and when combined with the medicinal use the total value could go as high as $6.3 billion.
Last year also saw the continued rise of the medical marijuana movement worldwide, with South Korea, Thailand, New Zealand, and the UK all voting in favour of legalisation. Meanwhile, Canada became the second country in the world to completely legalise the drug.
However, despite these promising signs, it may still be some time before cannabis is fully legalised in Australia, as local politicians continue to lag behind their more progressive overseas counterparts.
The Medicinal Market Continues to Grow
While medical marijuana is legal in Australia, successfully accessing it is often a challenging task, which sees patients facing prohibitively high costs, uninformed doctors and long waiting periods for approval.
As of September, there were just over 1000 medical cannabis patients registered in Australia, which is a significantly lower uptake when compared to other countries. While this may seem discouraging, there are signs that medical marijuana is beginning to gain traction.
The Therapeutic Goods Administration (TGA) has already approved cannabis as a treatment for any medical condition—within prescription guidelines—significantly increasing Australia's potential market size.
According to the CEO of MedReleaf Australia, Russell Harding, Australian doctors are also becoming more aware of medical marijuana, and are "more prepared to assist patients to gain access to this new therapy."
Most significantly, new data published by the TGA demonstrated that the country's recently streamlined application process has also finally started to produce positive results. November alone saw 568 approvals for medicinal marijuana—representing a 42% increase on the preceding month—which pushed patient numbers to 2,000, more than double the previously recorded amount.
The managing director of the Little Green Pharma, Fleta Solomon, believes that Australia's medical cannabis industry will turn a corner in 2019.
"The No. 1 factor, in addition to more and more patients requesting cannabinoid treatment from their doctor, is that general practitioners can now prescribe much more easily and don't need a specialist to support patient applications," Fleta said.
Legalisation to Become Mainstream in 2019
At the same time, a number of politicians have begun to push for the legalisation of recreational cannabis, with the Greens leader Richard Di Natale arguing that the government's current prohibition-based approach has failed disastrously.
"Quite simply, the war on drugs is really a war on people. We need to get real about cannabis use in Australia."
– Green Leader, Richard Di Natale
The issue was later raised by Senator David Leyonhjelm, who introduced a bill to Parliament that was intended to amend multiple Commonwealth acts which categorise cannabis as a controlled substance.
Labor backbencher Michael Pettersson also attempted to pass legislation in September that would have legalised marijuana for personal use in the ACT.
"Thirty-five percent of Australians have tried cannabis and 10 percent of Australians have tried it in the past 12 months," Pettersson said.
"This is not a rare substance, this is incredibly commonplace across Australia and I think it's time we change our drug laws."
Unfortunately, the majority of government officials have still proven to be largely apathetic when it comes to discussing the legalisation recreational cannabis. The issue is also rarely a part of the broader public policy discussion, leaving few avenues for legislative advancement.
Although the campaign to legalise recreational cannabis in Australia failed to gain significant momentum last year, things may be about to change in 2019. A groundbreaking 2016 study conducted by the Australian National University (ANU) found that there was a rapid shift in the public perception of cannabis legalisation between 2013 and 2016.
The ANU study found that by 2016 the number of Australians who supported legalisation had already skyrocketed to 43%. Only 32% of the population were found to be in opposition, while 22% remained undecided.
The study's authors predicted that Australia may see a majority shift in favour of legalisation as early as 2019. As public sentiment continues to swing in favour of legalising recreational cannabis, Australian politicians may be forced to consider the question in earnest.
Cannabis stocks appear to be ramping up for 2019, with the ASX now listing over 20 companies, several of which are already generating significant buzz in the Canadian and US markets. Similarly, the high cost of medical marijuana is also expected to decline this year, thanks to the growing number of cannabis producers setting up shop in Australia.
Until now, patients have been forced to rely entirely on overseas imports, which has left many Australians unable to afford the prohibitively high price-tag.
However, the CEO of PUF Ventures Australia, Michael Horsfall, believes this will change in 2019, as local supplies continue to increase.
"The key now is to apply further pressure on global pricing—achieved by driving the right economies of scale with producers, suppliers, and manufacturers. This will get the product to a price where it is affordable as a real option to the people who need it most—the patients."
"What is more exciting to the Australian market is that two-thirds of the global population sits just offshore in Asia."
– Michael Horsfall, PUF Ventures
"Momentum is building through Asia, and Australian companies have the right conditions, governance, reputation, and relationships to take advantage," he said.
Although Australia's cannabis industry may still be in an embryonic stage of development, investors can expect the market to continue expanding in 2019.
Increased access to medical marijuana will only serve to drive further demand, while broader international trends will lead to rapid industry growth. An expected change in government may also provide new opportunities to lobby for recreational legalisation.
Better buckle up, it's going to be an extremely green year.
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