Australias cannabis industry could be worth billions in a few years

Australia’s Cannabis Industry Projected at $1.5 Billion by 2024

in National

Key points

  • Cannabis industry set to reach $1.5 billion in Australia by 2024
  • Coming from 38% medical sales and 62% recreational (if legalised)

The UK-based cannabis consultancy firm, Prohibition Partners, recently released their second report on the cannabis industry for Australia, and the greater Oceania region. Their estimates predict a 2,974% increase in the value of the cannabis market over the next 5 years.

Prohibition Partners is one of the largest European-based cannabis consultancy firms, with offices in England, Spain, and Ireland. Their team focuses on providing market analysis, bespoke research, consumer insights and forecasting, and consultancy services to those already operating in the cannabis industry.

Their cannabis reports Europe, Asia, North America, Oceania, Latin America, and Africa. Pretty much the whole world. On top of their recurring reports, they also present reports on individual countries, and miscellaneous topics such as The Impact Series: Disrupting Beauty and PSYCH: The Psychedelics as Medicine Report – both released in early 2020.

Prohibition Partners Logo

In early April, they released their second report on Oceania. Countries in the analysis included Australia, New Zealand, and 29 other countries, islands and territories scattered around the Pacific Ocean. Island nations included Guam (US), Papua New Guinea, Cook Islands (NZ), Tonga, Samoa, and more.

The report is created for their 150,000 strong readership – cannabis investors, entrepreneurs, and others interested in where cannabis is heading around the globe.

Pondering Pot is focused on cannabis news in Australia, so we’ll be skipping the other countries in the report. If you’d like to read the full report, you can download it here.

Where Australia’s Heading with Cannabis

They were quick to start off the report showing the attitudes of Australian’s, across all age groups, is dramatically shifting towards legalisation. Research from Roy Morgan in 2019 showed that across Australia, the total number of those wanting to legalise marijuana increased to 42%, growing by 9% in the four years to 2019.

The shifting attitudes of Australian towards cannabis legalisation
The shifting attitudes of Australian towards cannabis legalisation

The medicinal side of marijuana has also seen major inroads in the past four years. Since it’s federal legalisation in 2016, a total of 92 organisations were approved for medicinal cannabis – 31 for commercial growing, 20 for research, and 41 for producing medicinal cannabis products.

On a similar side note, Fresh Leaf Analytics, an Australian-focused cannabis consultancy firm, reported that 2019 saw a 658% increase in the number of active cannabis-using patients in the country, totalling 10,595 by the end of the year.

Unfortunately, a major barrier for potential patients is still the cost of cannabis treatment. Varying wildly, a week’s worth of cannabis medicine could cost between $57.70 all the way up to $269.30 – depending on the condition and medicine prescribed.

Costs are so high as the industry is still relatively new, and the medicines are not yet subsidised by the PBS. Today, there is only a single cannabis product (Sativex) on the list of therapeutic goods, known as the ARTG, which the TGA can then subsidise through the PBS. If medicinal marijuana products were added to the PBS, it could cap the cost per prescription $41, or $6.60 for concession card holders.

Conditions that cannabis based products for medicinal use CBPMs are being used for
Conditions that cannabis -based products for medicinal use (CBPMs) are being used for

Those accessing the high priced medicinal marijuana in Australia are overwhelmingly using is to treat pain related conditions – similar percentages are seen across other countries.

The Future Size of Australia’s Cannabis Industry

One of the main findings of the report, was just how quickly the cannabis industry would grow in Australia *if recreational cannabis was to be legalised.

From a measly $64 million in 2020, Prohibition Partners project by 2024, the cannabis industry would be worth $1.95 billion. Growing 2,974% in five short years. Keep in mind, that’s only if cannabis is legalised for recreational use in the very near future.

Growth of Australian cannabis industry to 2024
Growth of Australian cannabis industry to 2024

Many are passionate about bringing cannabis legalisation to life and Rhys Cohen, the Principal Consultant at FreshLeaf Analytics, believes Victoria will be one of the first states to do so.

The place that will be the first to make meaningful moves on recreational cannabis will be Victoria. They are currently running a wide-ranging review of drug policy, and the issue of recreational cannabis is in their scope. Victoria was the first state to pursue medical legalisation and, after the ACT, is the most socially progressive jurisdiction in Australia.

It seems inevitable that cannabis reform will eventually hit Australia with our friends across the Tasman in New Zealand already making the first moves.

For the 2020 general election, the Labour Party promised citizens they’d be able to vote whether they want to legalise cannabis or not. Voting will take place on September 19, 2020, and will be accompanied by another referendum on the End of Life Choice Act 2019.

Whether we see a similar referendum help in Australia, only time will tell. For now, we can be pleased at pace (albeit slightly slow) of which medicinal cannabis is progressing.

Feel free to browse the full report here.

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Stay informed with the latest cannabis news in Australia.

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