It has now been over one year since medical cannabis was made legally available in Australia, and since then we have seen over 60 companies emerge to cultivate, manufacture, conduct research and provide ancillary services.
However, based on the current landscape, without export, the industry is likely to stumble and fall.
The media can be misleading (whether intentionally or not) on how the industry is progressing. Often enough, we hear of companies being granted a ‘licence’ to cultivate or manufacture, but only a small handful of these companies have actually been granted approval to start cultivating or manufacturing. This is because in order to receive a ‘permit’, they have to demonstrate supply chain - they have to show where, and to whom, they are selling their products.
This is exceptionally difficult, considering the Australian market is currently very small, and will remain small until products are approved by the Therapeutic Goods Administration (which we anticipate will take a few more years). Only so much cannabis can be grown for research purposes…
We have already seen one ASX company withdraw from their medical cannabis ambitions, and more will fall if the current system does not change.
The TGA is unlikely to change its stance on requiring rigorous randomised, double-blind, placebo-controlled clinical trials on products before approving them, and these trials are needed. While we are all certain that medical cannabis has fantastic therapeutic benefits, this comes mainly from anecdotal evidence, which isn’t substantial enough for the TGA.
Of course, if the state government loosened up their prescription approval process, then more patients could gain access through the various pathways for unapproved medicines, but that’s for another time.
Therefore, the only way to allow the industry to grow and prosper is to allow for the exportation of products to the ever-growing global market.
Due to increasing research on medical cannabis, as well as shifting public opinion, countries around the world are legalising for medical. So far, over 25 countries have done so, 15 within the last 2 years. A recent report from Brightfield Group estimated the medical cannabis industry is expected to hit over USD 31.4 billion by 2021.
Meanwhile, the regulations established by the Federal Government could position Australia as a world leader in the cultivation and manufacturing of medical cannabis.
As the rest of the world begins to catch up to these standards, there is a limited window of opportunity for Australia to establish this position. Allowing for export would facilitate the commercial success of the industry, allowing Australian based organisations to expand their operations and take advantage of the growing international market.
Not doing so will divert foreign investment and capital to other low cost international jurisdictions, eroding opportunities for Australian SME’s to develop globally scalable cannabis related intellectual property, ancillary business and service functions.
Permitting export will allow the 60+ companies already operating in Australia to grow, and provide a market for new companies to develop. This has the potential to generate thousands of jobs - particularly in regional areas.
And then there’s the impact on product price. The current cost of medical cannabis products in Australia is very high, with the higher end of dosage on the most expensive products reaching upwards $50,000 per year.
This is contrasted to Canada, where the same products are sold well under one fifth the price.
It is therefore not surprising that many patients have turned to the black market to access products due to these unaffordable costs. There are multiple issues and risks with this path - quality is not tested, patients are not monitored, and carers may be charged for accessing and supplying an illegal substance.
By allowing domestic production to meet international demand the product price for Australian patients will be drastically reduced.
Allowing for export is an easy way for our government to facilitate the growth of this industry, positioning Australia as a world leader in the supply of medical cannabis, while creating thousands of jobs and boosting the economy.