Australians spent a record A$402 million (US$261 million) on cannabis in the first half of 2024 as the medicinal cannabis market continues to boom, amid calls for the government to review regulatory frameworks for both medicinal and adult-use cannabis.
Figures in the Penington Institute report released Wednesday (Tuesday GMT) show Australians are forecast to spend a billion dollars on prescribed medicinal cannabis in 2024, more than double the estimated $448 million spent in 2023 and a sharp increase from $235 million in 2022.
Despite the current regulatory framework, Australia’s medical cannabis and hemp markets are growing, with many companies manufacturing, researching and exporting the plant-based product, including various cannabis players listed on the ASX.
In 2016, the government legalised medical cannabis and later legalised the export of cannabis from Australia in 2018, with a number of listed cannabis companies producing recreational cannabis in other countries.
Penington Institute chief executive John Ryan said: “Australia’s policy approach to cannabis is well past its expiry date. The current criminalised model when it comes to personal use by Australian adults means that we leave ‘quality control’ for the production and distribution of cannabis largely to criminal gangs, whilst punishing people who use cannabis with criminal sanctions,” Ryan said in a statement.
Botanix Pharmaceuticals is the country’s largest cannabis company, specialising in cannabinoid-based dermatological therapies, with its main product Sofdra receiving approval in Japan in 2020 and US Food and Drug Administration (FDA) approval in June 2024.
Ryan explained that it is not only the medicinal cannabis industry that requires action after estimations of Australia’s illegal cannabis market came in at around $5 billion a year, with a substantial share of the revenue accruing to serious organised crime networks. “A regulated adult-use market would also provide opportunities to offer support, health guidance and advice to consumers.’’
In 2020 the Australian Capital Territory legalised recreational use, but it must be grown by the user and is not available for purchase in the state. Meanwhile, the cost of cannabis law enforcement is estimated at $2.1 billion per year with 90% of arrests involving cannabis consumers, rather than suppliers.
In 2022-23 around 700,000 Australians used cannabis for medicinal purposes with only 200,000 obtaining their cannabis via prescription, despite more than 2.87 million medicinal cannabis products sold in the first half of the year, a significant uptick from the 1.68 million sold in the second half of 2023.
Penington Institute is an independent, evidence-based not-for-profit organisation that supports cost-effective approaches of maximising community health and safety in relation to drugs, including pharmaceuticals and alcohol.
Botanix Pharmaceuticals (ASX: BOT) has a market cap of $591.85 million and last closed at $0.35 (on Wednesday 27 November 2024).