Cannabis industry revenue is also expected to triple during 2020—growing to approximately $95 million—while active patient numbers are on schedule to reach 30,000 before the year's end.
Earlier today FreshLeaf Analytics—which operates as a division of Southern Cannabis Holdings (SCH)—released the latest edition of its Q3 Patient, Product and Pricing Analysis, sending shockwaves through the local cannabis industry.
One of the most notable findings revealed that medicinal cannabis has undergone its greatest price drop since the drug was legalised in early 2016, while the number of available products has climbed to 150.
Longer term we are speculating that the legalization of cannabis as a consumer product may be accelerated by a need to find new tax revenues. Filling state coffers was a significant driver in the US behind legalization of cannabis for consumer use, and COVID-19 will certainly have state and federal governments here looking for years at how to generate new revenues. FreshLeaf Analytics Managing Director, Cassandra Hunt
The report marks the fifth major publication from FreshLeaf Analytics and has become known as the "most comprehensive" investigation of the Australian cannabis market due to its highly granular breakdown of consumer, healthcare and industry data.
Additionally, cannabis industry revenue is expected to triple during 2020—growing to approximately $95 million—while active patient numbers are on schedule to reach 30,000 before the year's end.
According to the Managing Director of FreshLeaf Analytics, Cassandra Hunt, the main factor that has driven down products prices over the last twelve months is "competition".
"There are now 150 products in the market fighting for share. Scale is a second factor. Some of the products being supplied now in Australia are derived from raw materials that are increasingly being cultivated and produced on a large scale bringing down cost per unit," Hunt said.
"Most companies had an impact on sales, but it was relatively small and short term, mostly around the time for the first national lockdowns in May / June."
"Unsurprisingly Melbourne based companies have been affected more. On the services side most clinics and doctors have moved to a tele-health based model and are seeing a lot more patients with COVID-19 related anxiety."
The report also found that COVID-19 had failed to significantly impact cannabis sales in the Australian market, although it may push the need for greater taxation and further discussion of legalizing adult use.
The market is also expected to undergo additional growth during 2020 thanks to the Australian government's recent decision to legalize over-the-counter low dose CBD, as these drugs already make up approximately 20% of cannabis products currently available to consumers.
"We expect the market to continue to grow, hitting generating in excess of 150 million in sales next year. We also expect significant consolidation as the number of players and product companies in the sector is excessive for the size of the market. Some Australian players will start to report meaningful revenues from overseas sales, mostly to Europe," Hunt said.
"The main change in the next 12 months will be the down scheduling of CBD S3. A final decision is expected on November 25, and we expect that if companies are able to successfully register their products, there may be products available late 2021 or early 2022."
The report has already attracted praise from other leading figures in the Australian cannabis industry, such as the Managing Director of PharmOut, Trevor Schoerie, who explained that "as the industry expands in Australia unbiased data and insight becomes increasingly important to companies and consumers alike."
"FreshLeaf Analytics stands out as a leading commentator on the state of the market and the opportunities and challenges our regulatory environment presents," Schoerie said.
This sentiment was also echoed by the Chairman of industry body Medicinal Cannabis Industry Australia (MCIA), Peter Crock, who praised FreshLeaf Analytics for its ongoing support of the cannabis industry.
"FreshLeaf Analytics has been tracking the Australian medicinal cannabis industry since its inception and we are very pleased to see the latest data and FreshLeaf's insights supporting ongoing rapid growth of the market," Crock said.
This pot stock could reach new heights in 2020 due to Coronavirus
The COVID-19 pandemic is showing no signs of slowing down, and as global markets enter meltdown many cannabis companies are feeling the effects of capital crunch.
While the market crash will continue for some time, it represents a golden opportunity for investors who are capable of riding out the volatility until share prices rally.
Luckily, one pot stock has developed antimicrobial drug that can already treat two superbugs while limiting their ability to develop antibiotic resistance.
Investors can also start picking up shares at rock bottom prices, as global investor sentiment continues to dampen thanks to COVID-19.
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