FreshLeaf Analytics Publishes "Most Comprehensive" Study of Australian Cannabis Market

FreshLeaf Analytics has released an in-depth analysis of the patients, products and pricing of the Australian cannabis industry.

The Southern Cannabis Holding Company's global research house, FreshLeaf Analytics, has just released its third report monitoring the products, patients and pricing of the Australian market.

One of the biggest findings uncovered by FreshLeaf's Q3 2019 report—which is the most comprehensive analysis of the cannabis industry to date—is that the number of new products available to Australian consumers has skyrocketed, growing by more than 40% in just 6 months.

This means that Australian healthcare professionals now have up to 76 different products to choose from when prescribing cannabis to patients, which will lead to greater availability, lowered monthly costs, and increased pricing stability.

Prescription numbers have also started to spike rapidly, with July alone seeing a 40% month on month increase in new patient approvals.

Australian Cannabis Industry
Source: Freshleaf Analytics

Based on these trends, FreshLeaf is now predicting that the number of SAS-B approvals will reach a total of 28,301 by the end of 2019, representing more than 1,000% growth on the previous year.

However, while patient numbers have continued to accelerate at break-neck speed, there are several factors holding the industry back, chief among them being the lack of governmental subsidization via the Pharmaceutical Benefits Scheme.

Australia's tough driving regulations—which take a strict no-tolerance stance on THC—were also singled out by the report as another key issue that is impeding further growth.  

According to the report, if current patient approval trends continue then the Australia medicinal cannabis industry can be expected to grow to approximately $50 million of annualized revenue by the end of the year.

While cannabis oils continued to dominate the market as the primary delivery mechanism for patients—comprising two-thirds of all products on the market—several other categories showed significant diversification during this period.

Australian Cannabis Industry
Source: Freshleaf Analytics

Dried flower now has 12 different product types, giving doctors a wide range of prescribing options, while capsules have increased from 3 to 8 products.

Additionally, FreshLeaf observed that no new delivery methods have been commercialised within the last 6 months, which means that there is a gap in the market for further product innovations such as sublingual strips, topicals, nasal sprays, patches and suppositories.

Patient costs were also found to have declined substantially, with the most common spending range—accounting for nearly one-third of all patients—being around $5-10 per day.

During this period the average dose per day for patients also rose slightly, increasing from 47mg to 54mg. However, the report states that this trend is in line with the titrate-up prescription model employed by most healthcare professionals, which typically records higher average daily doses as the number of long-term patients continues to rise.

Interestingly, while dosage levels may have nominally risen over the last 6 months—increasing by approximately 15%—patient spending has actually decreased by an average of 13%.

FreshLeaf have attributed this shift to a growing number of doctors who are moving their patients from high-cost products to more affordable low-cost options, as pharmacy pricing profiles have remained relatively steady during this period. 

Australian Cannabis Industry
Source: Freshleaf Analytics

Now that the Australian market has overcome several early-stage obstacles and increased patient access, FreshLeaf predicts there will be an enormous runway for growth.

And it's easy to see why, as the market is still being highly underserved. The report estimates that Australia has an estimated addressable market of up to 500,000 medicinal cannabis patients, however currently only 5,000 Active Patients are being served.

This means that up to 99% of the market has yet to be tapped into, representing a massive opportunity for future growth. But, before this can be achieved the market will need to address several key issues, including driving regulations, access to CBD products and a lack of support from the Pharmaceutical Benefit Scheme.

However, if these issues can be resolved in the coming years then FreshLeaf Analytics predicts that companies "operating in the right parts of the value chain stand to win big".

Southern Cannabis Holdings have also used the report's publication to announce the receipt of ethical approval for the company's Applied Cannabis Research division to conduct a world-first clinical trial in collaboration with MGC Pharma (ASX:MXC) and Epilepsy Action Australia.

The trial will compare MGC Pharma's flagship epilepsy drug CannEpil with a CBD only formulation in a world-first comparative clinical study.

The study will be conducted on approximately 100 patients from SCH division Cannabis Access Clinics, with half being treated with MXP100 and the other half treated with CannEpil, in an attempt to assess the efficacy of 100% CBD formulations when compared to low-THC products for the treatment of severe intractable epilepsy.

The trial is a huge moment for medicinal cannabis research, as it will be one of the first clinical opportunities to assess and collect data on the long-term safety of THC, the efficacy of cannabinoid treatments, and the impact on the quality of treatment and quality of life.

"Cannabis based medicines have shown efficacy for some patients suffering from epilepsy but there are still a lot of unanswered questions about which formulations are best for which patient groups."

– Medical Director Cannabis Access Clinics, Dr Sanjay Nijahawan

According to the lead researcher for the Applied Cannabis Research division of Southern Cannabis Holdings, Dr John Barlow, Australia will be an ideal location to undertake this type of research, as it offers a "world class framework, pharmaceutical quality standards around product, access to large numbers of patients, rigorous patient monitoring and data collection procedures and strong research incentives."

The company also recently announced that it has officially commenced operations in Australia and the UK.

Southern Cannabis Holding's initial launch in these markets will include Cannabis Access Clinics—Australia's first and largest network of medicinal cannabis clinics—Applied Cannabis Research,  a specialist contract research organization dedicated to assisting medicinal cannabis companies, and FreshLeaf Analytics, Australia's leading source of data and information about the medicinal cannabis industry.

The Director of Southern Cannabis Holdings, Tim Drury, commented that "Australia was an early adopter of the pharmaceutical style approach to cannabis".

"We believe that more national markets around the world will follow this framework and our experience in research, data and clinical services puts us in a unique position to unlock value from these markets," Drury said.

The company's initial UK launch will feature the opening of a Cannabis Access Clinics location in Hartley Street, London. Global expansion is also expected to continue in markets where the regulatory environment supports the introduction of a medicinal cannabis sector.

The Director of Southern Cannabis Holdings Europe, Dr Samuel Murray, was similarly bullish about the company's UK launch, saying that "we are proud to be a key part of Southern Cannabis Holdings' global strategy".

"We look forward to being able to fill a gap in the newly-opened UK market and provide UK-based doctors and patients with access to research, data and medical treatment based on cannabinoid-based therapies," Murray said.

You can read the full FreshLeaf Analytics report here.

Hugo Gray
Hugo Gray

Hugo Gray is a Melbourne-based journalist with a body of work that covers a diverse range of topics, including immigration law, sex technology, and now the rapidly expanding cannabis industry.

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