Aussie cannabis could be a billion-dollar market, says analyst
Health & Biotech
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Medical marijuana could grow into a $1 billion industry in Australia, a new analyst report suggests.
If the local market mimics North America, the wholesale value of cannabis could be $400 million a year, Cannacord analyst Matthijs Smith wrote in an October research note.
In the US and Canada about 1.2 per cent of people use cannabis for medical purposes, which would equate to 300,000 people in Australia.
“However, the cannabis used for medical purposes typically undergoes additional processing (quality testing, packaging, extraction, and/or formulation), resulting in more highly-valued products,” Mr Smith said.
“Thus, the market for medical cannabis products in Australia may be worth up to $1 billion pa.”
That doesn’t include the potential for clinics, distributors and suppliers that could add to that market value.
Stockhead reported this month that exports are also an untapped potential market because it’s still illegal.
Mr Smith says the Australian Office of Drug Control is reviewing whether to maintain a ban on cannabis exports.
It’s a move that would open the North American market to Australian cultivators which — once Canada comes through on a promise to legalise recreational use — would begin to see big shortages according to Deloitte.
Mr Smith told Stockhead that the “word on the street” is that the Office of Drug Control may lift the export ban by the end of this year, after it received “overwhelming support” from a discussion session in July.