Will Australians Turn to the Black Market Amid the Cannabis Shortage?

Australians are running out of medical marijuana, and many will have nowhere to turn but the black market.

The number of medical cannabis products being approved via the Special Access Scheme B-portal (SAS-B) continues to rise, with February's numbers hitting an all-time high of over 8,000 prescriptions.

Ordinarily, increased demand for medical cannabis prescriptions would be great for the fledgling Australian cannabis industry, however, many are unable to have their prescriptions filled due to a cannabis shortage throughout the country.

Moreover, the legal medicinal cannabis market is just the tip of the iceberg when it comes to cannabis users in the country, as the Australian Institute of Health and Welfare has reported that over 11.6% of the population have recently used illicit cannabis – making it the most used illicit substance in Australia.

As such, many medical cannabis patients may have to turn to the illicit market to have their needs met.

Over 90% of prescriptions and approvals are being supplied by imported products, and, according to CannaBiz, it can take "three months or more from the time an Australian company requests an import permit from the Office of Drug Control (ODC) to when Health Canada (where most flower is from) issues a corresponding export permit."

Put simply, Australia's dependence upon imported cannabis, combined with the bureaucratic mess that is both Australia and Canada's respective cannabis policies, all combine to prevent Australians from having easy access to medicinal cannabis.

Cassandra Hunt, MD at Freshleaf Analytics said that "in Q1 we saw a lot of disruption to the patient population due to product companies running out of stock. This was largely related to supply chain distributions – covid delays and import permit approval lag. The problems were compounded by the stock-out domino effect –  one company has a stock out and their patients migrate to another company creating a stock out at that company, and so on.

Until industry supply chains mature we expect this type of risk to persist.Cassandra Hunt, MD at Freshleaf Analytics

The Risk of Australia's Cannabis Shortage

There are many risks involved with Australians being unable to legally secure their medicinal cannabis products, which is why it's important to ensure supply shortages are improved.

The primary issue is that no medical patient should be without medicine, be that medical cannabis or otherwise. In the case of those taking medical cannabis, patients may be suffering from chronic pain, insomnia, PTSD, or epilepsy to name just a few qualifying conditions.

Moreover, as we discussed in a recent article, many of these patients have specifically chosen cannabinoid medications to avoid having to take more addictive medicines such as opioids, and could be left without their preferred medicine.

Without medication, these people may be left in pain or untreated, unable to work, and in more dire cases, unable to carry out their daily tasks entirely.

Finally, if patients maintain their refusal to take more addictive medicines, they will have nowhere left to turn except for the black market. Given that Australia's cannabis black market remains very prevalent, a lack of access to legal cannabis may not only cost patients, but will also harm the legal cannabis market as patients return to illegal vendors. This would erode trust in the legal market and its reliability, and severely reduce the momentum of Australia's medical cannabis industry.

Why can't we simply use Australian-grown medicinal cannabis?

Since 2017, the vast majority of Australia's cannabis has come from Canada. This means that if any delays or regulatory quagmires slow the importation process from Canada, Australia's cannabis supply goes significantly down.

And it's not as if cannabis cultivators can just snap their fingers and cannabis appears, it can take up to 18 months for crops to be ready for harvest, and that's after years are spent to acquire the necessary permits to cultivate.

However, as we've discussed previously here at The Green Fund, Australia is a prime location for cannabis cultivation, and without importation, the price of cannabinoid medicines would plummet.

In the 2019 senate inquiry into the barriers between medical marijuana patients and accessing their medicine, pricing was the third barrier identified, with patients spending up to $15 per day on their medicines.

As doctors become more conscious of cannabis and more likely to prescribe it, and as more Australian companies begin to supply their products to the market, prices will drop and access will climb, helping to propel the Australian medical cannabis industry to new heights.

There are only a handful of companies currently equipped to service Australia's needs when it comes to homegrown cannabis currently, with one being Cannatrek, which is supplying several dry flower products including its T18 Jasmin range.

Cannatrek Jasmin
Cannatrek's T18 Jasmin Flower range

The founder and CEO of Cannatrek, Tommy Huppert stated that "Cannatrek has been preparing for the maturing of this newly regulated industry in Australia for many years now and has secured multiple global suppliers to manage demand spikes from an import and distribution perspective."

"It now aims to continue as a trusted domestic supplier, that puts patients first with quality, service and affordable medicinal cannabis. We are delighted to release our first domestic cannabis flower products, T18 Jasmin and T17 Kakadu,  to alleviate the current lack of supply facing Australian patients."

Additionally, ECS Botanics (ASX:ECS) has today announced that its subsidiary Murray Meds has signed an agreement with Releaf Dispensaries to supply the company with dried flower products.

Alex Keach, the founder of ECS Botanics said in the Press Release that "THC flower is in high demand and we are pleased to be partnering with Australia's leading medicinal cannabis clinics and dispensary groups. The accelerating rollout of Releaf's medicinal cannabis clinics and dispensaries across Australia is also making access easier for patients and driving demand, Releaf has an aggressive rollout strategy and we look forward to supporting their growth.

The CEO of Releaf Dispensaries, Gary Mackenzie said of the partnership:

"Today's agreement with ECS marks another exciting milestone for Releaf as the group of companies expands its franchise operations in Australia, New Zealand and the United Kingdom to supply affordable high-quality Australian flowers back into dispensaries."

'The partnership with ECS provides Releaf patients in need of access to a sustained supply of GMP-certified, high-quality medical cannabis. This is an important step in improving patient access of local Australian products, as well as opening up opportunities for the company to export Australian product into international markets," Mackenzie concluded.

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Louis O'Neill
Louis O'Neill

Louis is a writer based in Sydney with a focus on social and political issues. Having interviewed local politicians and entrepreneurs, Louis now focuses on cannabis culture, legislation & reform.