Australia okays cannabis exports but unlikely to allow locals to supply Canadian smokers
Health & Biotech
Health & Biotech
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Australia is to allow the exports of cannabis products but in a way that will likely prevent local growers from supplying the Canadian recreational market.
“This decision will help both the domestic supply and Australian producers by strengthening the opportunities for domestic manufacturers,” Health Minister Greg Hunt said in a statement.
“We are making these changes because the expanding domestic medicinal cannabis products industry is facing increasing competition from imports.”
It’s expected that a bill will be presented to Parliament in February.
The Minister’s office has been contacted for comment.
Medicinal Cannabis Council general manager Blaise Bratter told Stockhead that only allowing specifically Australian manufactured medicinal cannabis products — rather than the raw material as well — meant no Australian growers will be allowed to supply the Canadian recreational market, which is due to open up on July 1.
It also means the processes for making products remains in Australia, a boon to local businesses.
The news created quite the turn around for Australia’s 20 listed cannabis stocks from Tuesday, when almost all closed lower.
By midday the biggest movers — those with share movements up over 20 per cent — were Auscann (ASX:AC8) and Cann Group (ASX:CAN), the two biggest growers in the country, and nutraceuticals maker BOD Australia (ASX:BDA) and app maker Lifespot Health (ASX:LSH) which has a tangential relationship with cannabis via a German company.
Auscann says its the only company in the country to all of the licences to grow and manufacture cannabinoid medicines in Australia, thanks to a partnership with Tasmanian Alkaloids.
“We are perfectly positioned to create high value export products from AusCann and have the international relationships in place including Canopy, the largest producer in North America and also our largest shareholder in AusCann,” said AusCann managing director Elaine Darby.
Originally sales of cannabis products and raw materials were banned in order to maintain supply for local use. But patient access is still problematic.
In October the Senate passed the Medicinal Cannabis Legislation Amendment (Securing Patient Access) Bill, allowing doctors of terminally ill patients to prescribe cannabinoid medicines without waiting for prior approval.
But other prescription requests have to be approved by the Therapeutic Goods Association (TGA), and State regulators.
Mr Bratter says he’s heard multiple anecdotes of patients receiving approval from the TGA only to have their claim rejected by the State authority.
Last year the Office of Drug Control held consultations which found wide industry support for exports.
The move has been widely expected.
Grower Cann Group raised $60 million in a matter of hours in December in order to prepare for cannabis exports.
A broker, who wished to remain anonymous, told Stockhead on Wednesday that the medical cannabis opportunity was a global one, as the German market opens further and and Canada faces the daunting task of suppling the recreational market.
“While the Canadian industry is investing heavily in capacity expansion, it is unlikely that it will be sufficient to meet this demand for several years,” wrote analyst Matthijs Smith in a recent Canncord Gennuity research report.
Mr Smith estimates that by 2018 Canadian recreational users of marijuana will be consuming 650,000kg of cannabis a year.