Australian medicinal cannabis sales could hit $423 million this year — an 84% increase on the previous corresponding period, according to industry experts.
And that’s just a small portion of the global market, which is estimated to be worth in excess of $70 billion by the end of this decade.
Dedicated medicinal cannabis researchers FreshLeaf Analytics forecast that more than 100,000 Aussie patients would be accessing medicinal cannabis in this quarter; two years ago, that number was yet to hit 25,000.
And patient numbers are just one of the factors driving the sector’s growth. FreshLeaf also points to product revenue, lower prices, increased Special Access Scheme approvals and more investment dollars.
Booming market
“The number of clinicians registering as authorised prescribers has continued to rise dramatically,” FreshLeaf’s latest report says.
“This is a promising sign for the industry and there is clearly a growing subset of clinicians who are committed to utilising medical cannabis as a regular treatment option for their patients.”
Australia's Therapeutic Goods Administration regulates medicinal cannabis supply; doctors can prescribe it to patients through the authorised prescriber and special access schemes.
More than 225 medicinal cannabis products are now available, with oil and flower remaining the most dominant forms in the market, accounting for more than 80% of products sold.
There has also been a large increase in locally-cultivated and manufactured products, with FreshLeaf observing Australia is stealing product share from Canada, a traditional powerhouse in the medicinal cannabis industry.
The average retail price has continued to drop, while wholesale prices have decreased significantly; this has led to a slight drop in consumer outlay as well.
Looking ahead
FreshLeaf says the remainder of 2022 will see continued transformation of the industry, characterised by wider acceptance of medicinal cannabis, improved access for patients, an increase in R&D investment and industry players looking to new markets in which to expand.
“There are plenty of signs that the stigma surrounding cannabis is beginning to dissipate,” FreshLeaf says.
“The down-scheduling of low dose CBD and the promise of access through pharmacies has given some legitimacy to cannabis as a ‘medicine for the masses’.
“The subsequent jump in SAS-B approvals is no coincidence and the significant jump in Authorised Prescribers (despite their overall numbers still being relatively small) signals that a growing number of doctors are embracing cannabis prescribing.
“We anticipate that patient access will continue to improve as the government implements the accepted recommendations made as a result of the Senate inquiry into barriers to patient access to medicinal cannabis.
“Companies will continue to look to new pathways for expansion, psychedelics are a big part of a new future growth narrative, and the down-scheduling of CBD will help drive investment.”
The Aussie players
There is no shortage of medicinal cannabis players on the ASX, from drug developers to hemp-derived products.
Hygrovest Ltd (ASX:HGV) takes an overarching view of the sector, as a specialist investor in medicinal cannabis projects.
The company continues to focus its new investment efforts on themes like disease testing, biotech, cryptocurrencies and decarbonisation.
At the same time, the company is also focused on its existing cannabis portfolio companies that outperform the industry.
Hygrovest recorded a loss of 20% for the financial year to February 28, 2022, compared to the 63% loss in the listed Canadian cannabis index.
Elixinol Wellness Ltd (ASX:EXL, OTCQB:ELLXF) recently struck a distribution deal with British Cannabis, which will see the company manufacture, market and sell CBD products across the UK.
Elixinol's decision is driven by continued regulatory uncertainty in these markets and the company’s strategic focus on profitability.
Creso Pharma Ltd (ASX:CPH, OTCQB:COPHF) is focusing on the other side of the Atlantic Ocean, with the company set to unlock US product sales and manufacturing with Sierra Sage Herbs (SSH).
The company will shortly send 35,000 CannaQIX 50 lozenge products from Creso Pharma Switzerland to SSH in the US, which will be made available for eCommerce sales through its leading Good Goo brand.
In addition, both companies have completed sample contract manufacturing of a suite of sport CBD-based products through SSH’s existing contract manufacturer in the US.
Looking ahead, these developments have the potential to increase Creso’s sales footprint in the US, as well as expedite new product launches.
Both Emyria Ltd (ASX:EMD) and Incannex Healthcare Ltd (ASX:IHL, NASDAQ:IXHL) are focused on drug development, from mental health conditions to lung inflammation, bowel disease, arthritis and beyond.
- Daniel Paproth