- After changes to the law that made access to cannabis legal in some circumstances, experts and businesses in the sector say the path to access remains complicated at best.
- But they were also divided on how Australia’s regulatory approach should change, in light of the rocky path taken by almost every emerging cannabis market.
- “We’re now moving to a point where there are less barriers for people to access cannabis products and CBD products in Australia,” Dr Ben Jansen, founder of CDA Clinics told Business Insider Australia.
- Visit Business Insider Australia’s homepage for more stories.
Five years after landmark legal changes, Australian companies say the market is finally reaching a point where providing people safe and easy access to cannabis is actually possible.
Globally, newly-emergent cannabis markets, including the US, Canada and the UK represent enormous potential profit.
In the US, where the legal frameworks around production and sale differ by state, the projected market value for medical cannabis is estimated to exceed US$13 billion by 2025.
While Australia has progressed — albeit slowly — since medical cannabis products became legal, experts believe there’s a fine line between a well-regulated market and one that’s keeping a now-legal product from those for whom it could benefit.
While there are 600,000 Australians using marijuana for medical purposes, according to the Australian Institute of Health and Welfare, it’s a fraction of the 1.9 million who use it for other reasons.
Of those 600,000, only 3.9% actually had a doctor’s prescription.
In 2016, medical cannabis was legalised in Australia as a way to “regulate cannabis as similarly as possible to other medicinal products with a whole bunch of caveats,” said Rhys Cohen, a cannabis consultant and editor of industry publication Cannabiz.
Amendments to the Narcotic Drugs Act permitted both legally-grown cannabis, as well as the manufacture of medicinal cannabis products in Australia.
However, Cohen said it has been a slow process to get to the point where people whose quality of life could be vastly improved by having easier access to cannabis products are able to navigate the medical framework required to get it.
Cohen said the approaches of other markets which have similarly been making moves towards legalisation offer lessons in how the Australian market can develop the correct level of regulation to create a safe supply chain to access cannabis for medical reasons – as well as recreationally – in the future.
Earlier this year, low doses of cannabidiol (CBD) oil were downgraded from Schedule 4 to Schedule 3 by the Therapeutic Goods Administration, a change that means Australians can now buy CBD products over-the-counter with a prescription.
Dr Ben Jansen, clinical director and founder of cannabis provider and consultancy CDA Clinics, told Business Insider Australia that now, five years after the first changes to the law, we are seeing the market actually emerge.
Jansen’s company owns and runs an online portal, CDA Express, that enables consumers to complete a free consultation, which is reviewed before they are cleared to buy CBD oil online.
The significance of this development, Jansen said, is that “we’re now moving to a point where there are less barriers for people to access cannabis products and CBD products in Australia.”
We can now better understand “how that compares to what you’ve seen done well or not done well in other markets around the world,” he said.
Comparing the markets
Jo Patterson, CEO of Bod Australia, an ASX-listed CBD healthcare company, told Business Insider Australia her company, which contributes research for international organisations in the space, as well as access to production based in Europe, blamed regulation for holding back the expansion of the Australian market.
In the UK and a number of US jurisdictions, some CBD products can be purchased over the counter without the need to get approval from a doctor. From the perspective of a company looking to supply the sector there is no need to go through a clinical trial pathway, she explained, which is a significant investment of both time and money.
“Whereas in Australia they are restricting the opportunity here by… mandating that the product has to fit a certain profile,” Patterson said.
“There’s limited opportunities here in Australia, because of the regulatory restrictions and mandates,” she said, despite the “undeniable, growing body of scientific literature that supports the use of CBD for healthcare purposes.”
Patterson said particularly for her company, which has access to an international supply chain for cannabis products, she wants a perspective shift in how it’s viewed in the US, Canada or the UK.
Cohen said the question of regulation is complicated in almost all countries with an emerging market, making it difficult to fault or praise Australia’s approach.
For example, the US’s state-based approach has made it exceedingly hard for companies to access basic financial services from federal financial institutions, which isn’t a significant issue in Australia
In late 2020, the Australian Financial Review reported that before it had even been granted licences to cultivate and research cannabis from the Office of Drug Control, early stage cannabinoid pharmaceutical company CannaPacific secured a $3.5 million debt facility from Westpac.
Similarly, in November, National Australia Bank provided a $50 million credit facility to ASX-listed Cann Group, the first company to be issued with a cannabis research licence by the Office of Drug Control (ODC) in 2017, as well as a cultivation licence.
“I don’t think anyone’s done recreational cannabis very well…yet” Cohen said.
“Canada is great because they legalised it at the federal level, and they commercially legalised it at the federal level.”
On the other end of the spectrum, according to Cohen, are countries that haven’t legalised recreational cannabis like Spain and Belgium, but have allowed a not-for-profit cannabis sector to emerge.
“In Spain you have this non-for-profit community of entities that cultivate and supply cannabis, on behalf of their members to their members,” he said. “Which I think is terrific.”
Cohen said that having a well-regulated commercial cannabis sector working in tandem with a medical or non-for-profit would be the ideal, but this isn’t happening in any country.
Jansen said in the US market, FDA testing has failed to ensure the illicit CBD market was kept to the minimum. He said around 90% of the CBD available on the online market in the US is illicit and untested.
He said while the process to get this product into market has been laborious — when the company first applied to be able to sell through an online marketplace, the regulator rejected the application, requested a new application, then a month later said they’d made a mistake and approved it — he said the regulatory framework is working and will improve over time.
The Australian market “has to have its own organic growth and learning with Australian industry and the regulators as well,” Jansen said.
The future for Australian cannabis
Patterson, whose company has the capacity to supply CBD products for a commercial Australian market, says she wants to see an expansion of the types of products that can be legally sold.
“Currently in the market, there is no product that has a type of registration that fits below the profile that the TGA specified,” she said, that would allow the sale of CBD without the need for a prescription.
With the prescription market in Australia growing and more “doctors getting involved”, Patterson wants to see the regulatory landscape simplified to allow more kinds of low-dose cannabis products into the market.
“In the US, the medical cannabis market today is valued at about $8.6 billion,”she said.
“So I’m really excited about the opening up of this market opportunity, both from a healthcare perspective, and a medical perspective. And for the regulatory landscape to be simplified only means, you know, the market’s going to accelerate, and therefore the opportunities for us obviously accelerate with that.”