The Australian medicinal cannabis market has seen strong growth in 2021, with revenue from product sales estimated at $230 million.

And medical cannabis prescriptions are at an all-time high.

The TGA said 13,666 Australian patients were approved in September alone – up from 6,126 in January this year.

FreshLeaf Analytics principal consultant Juno Wilson said active patient numbers have skyrocketed – reaching almost 90,000.

“The uptick of prescriber metrics – like Authorised Prescriber numbers – is a key indicator that there is a growing subset of clinicians who are committed to utilising medical cannabis as a regular treatment option for their patients,” he said.

“As both patients and prescribers get more comfortable with medicinal cannabis, and as more data is generated with the increasing number of clinical trials underway, we’d expect this trend to continue into the future.”


So which ASX pot stocks had a good year?

Here’s a list of cannabis stocks and their performance in 2021.

Code Company Price % Year Market Cap
EMD Emyria Limited 0.37 335 $ 63,811,694.04
IHL Incannex Healthcare 0.485 185 $ 610,306,641.52
IDT IDT Australia Ltd 0.48 134 $ 115,132,881.60
LV1 Live Verdure Ltd 0.4 74 $ 16,820,730.00
DTZ Dotz Nano Ltd 0.41 71 $ 167,047,806.40
RNO Rhinomed Ltd 0.26 41 $ 65,990,374.32
CAU Cronos Australia 0.2 29 $ 25,750,000.00
MXC Mgc Pharmaceuticals 0.0385 20 $ 105,244,191.31
LGP Little Green Pharma 0.655 7 $ 118,414,733.45
NTI Neurotech Intl 0.058 2 $ 41,832,907.56
YPB YPB Group Ltd 0.0025 0 $ 14,827,278.58
ALA Arovella Therapeutic 0.04 0 $ 17,794,072.56
IRX Inhalerx Limited 0.075 0 $ 14,319,691.35
WOA Wide Open Agricultur 0.74 -21 $ 94,074,113.94
AVE Avecho Biotech Ltd 0.015 -32 $ 23,869,514.84
TSN The Sust Nutri Grp 0.245 -36 $ 23,791,064.33
SCU Stemcell United Ltd 0.014 -39 $ 14,606,489.21
WFL Wellfully Limited 0.079 -39 $ 20,111,085.41
MDC Medlab Clinical Ltd 0.1525 -42 $ 47,904,593.94
ECS ECS Botanics Holding 0.029 -45 $ 32,051,249.94
MRG Murray River Grp 0.245 -51 $ 10,808,210.04
AGH Althea Group 0.23 -53 $ 73,421,290.41
CAN Cann Group Ltd 0.2875 -55 $ 99,423,533.36
BOT Botanix Pharma Ltd 0.0545 -58 $ 52,549,672.00
AC8 Auscann Grp Hlgs Ltd 0.085 -60 $ 37,887,051.46
EN1 Engage:Bdr Limited 0.002 -60 $ 6,205,271.90
BOD BOD Australia 0.225 -61 $ 25,397,740.80
PAL Palla Pharma Ltd 0.295 -61 $ 47,764,383.09
MMJ MMJ Group Hlds Ltd 0.064 -63 $ 14,947,009.03
EVE EVE Health Group Ltd 0.004 -64 $ 15,372,567.56
CPH Creso Pharma Ltd 0.084 -66 $ 109,146,066.43
EXL Elixinol Wellness 0.078 -68 $ 24,956,982.90
ZLD Zelira Therapeutics 0.033 -69 $ 42,115,644.19
EPN Epsilon Healthcare 0.083 -71 $ 16,958,211.51
RGI Roto-Gro Intl Ltd 0.022 -71 $ 7,194,448.74
CGB Cann Global Limited 0.0025 -72 $ 15,838,716.96
EOF Ecofibre Limited 0.56 -73 $ 191,939,306.90
ROO Roots Sustainable 0.006 -76 $ 3,536,257.66
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Only three players topped the 100% mark, with Emyria (ASX:EMD) up a whopping 335%

The company was originally working with Cann Group (ASX:CAN) to develop a CBD product, but parted ways in August to pursue registration independently.

Emyria contracted leading North American drug manufacturer, Altasciences, to deliver a range of novel, synthetic cannabinoid-based medicines for its Australian and US drug registration program.

The company reckons synthetic CBD would be more affordable for patients than the organic stuff – and flagged that its clinical trial material was due to arrive in Q4 2021.

And the share price jumped in November after it announced the Tattarang private investment group would be investing $5 million via a share placement at $0.25 per share – and holding around a 7.3% interest in the company on completion.

If you’re not familiar with the name – it’s the investment arm of billionaire Andrew Forrest’s family, and comes just months after Gina Rinehart invested $15 million into Little Green Pharma (ASX:LGP).

The funding is slated for acceleration synthetic cannabinoid registration programs with the TGA and FDA, and to advance Emyria’s novel MDMA-analogue development program with the University of Western Australia.

But the company’s MDMA dreams took a hit last week when Australian medicines regulator the TGA ruled that psychedelic drugs cannot be used to treat mental health conditions.


Incannex Healthcare (ASX:IHL)

The company was up a respectable 185% in the last 12 months.

It took a hit from the TGA ruling, but its IHL-42X cannabinoid drug for the treatment of obstructive sleep apnoea is still on the cards.

In October IHL engaged Colombian-based manufacturer Procaps S.A. to develop a soft gel capsule which will be used for the Phase 2, Phase 3 and open label clinical trials of IHL-42X.

Patient dosing for the Phase 2 trials is expected to be finalised before year end and results will be used to support an investigational new drug application with the US Food and Drug Administration (FDA).

The company has also lodged a registration form with US SEC for a potential dual listing on the Nadsaq, which it said would provide greater access to larger pools of capital with investors who are experienced in psychedelics and medicinal cannabis.


IDT Australia (ASX:IDT)

IDT rose 134% for the year, pursuing its expansion into medical cannabis via a tie-up with the Nasdaq-listed grower Clever Leaves.

Announced in mid-June, the deal involves Clever Leaves shipping flower from its Portugal facility. IDT will package the flower and, pending positive stability testing will provide flower-in-a-bottle product to its distributors.

The company is aiming to provide low-potency product that can be sold across the counter at chemists when laws are relaxed, and says its audit status with the TGA means its facilities are also certified in Europe, Canada and New Zealand.

But the company hasn’t been immune from the fickle winds of the drug industry, with its plans to help in Australia’s COVID-19 vaccine production effort rejected by the Federal Government.

The Gov plans to build and have a new facility to produce mRNA vaccines – specifically Moderna – which would be up and running by 2024.

But unfortunately, not with IDT.

However, the company says that its MMI Collaboration Stream Grant Application remains live and is unaffected by the outcome of the mRNA application.


Aussie market forecast to reach $423m next year

“With greater mainstream acceptance both domestically and internationally, we expect this trend to continue with a forecast of $423 million in 2022,” Wilson said.

“The international markets are opening up, too, with speculation that Germany will legalise cannabis for recreational use, while a number of countries including France are beginning their journey into the medicinal cannabis space.

“There are a number of Australian companies who are well positioned to capitalise on this growth so it will be interesting to see how the market plays out in the new year.”

Graph: Freshleaf Analytics


Expect to see more M&A activities next year

Wilson said he expects to see another strong year of growth in 2022.

“We’ll probably see some more M&A activity as well, with companies consolidating activities and vertically integrating operations.”

FreshLeaf noted the M&A trend earlier this year, with Cannpal (ASX:CP1) snapped up by Auscann (ASX:AC8)and more recently  Cronos (ASX:CAU) merging with unlisted CDA Health.

Cronos CEO Rodney Cocks said the merger will leverage the synergies from the business, with Cronos’ existing medical products, clinical services (via Cannadoc Health) and consumer export operations in Asia – combined with CDA’s retail-ready food and nutraceutical products and doctor-led medical cannabis clinics.

“We plan to expand scope and scale of current operations of both businesses and look at new markets – but also look at strategic opportunities in terms of acquisitions as well,” he said.

In terms of consolidation, Cocks said companies are selecting a segment of the value chain and then pursuing that, but also growing within that segment.

“That sort of speaks to what we’ve done and are doing with CDA, I think it positions us really well, in terms of revenue, in terms of a route to profitability, and a very clear plan for the future,” he said.

“As a downstream player, we’re close to the patient, close to the doctor, and then with our products – both our in-house products as well as distributing other companies’ products – that puts us in the right place in the value chain.”



CBD on shelves still some time away

In the Australian market, the race to have S3 registered low-dose CBD (<150mg daily) available over the counter at pharmacies is well and truly on.

“These things take quite a bit of time to make sure that products undergo the necessary processes to ensure quality, safety and efficacy,” Wilson cautioned.

“There are a number of companies currently in the product registration process and we don’t expect to see the first products available over the counter at pharmacies until late 2022/early 2023.”

Cocks said that CBD on shelves isn’t a pipedream – it’s just a longer road than lots of patients, companies and the industry in general thought it was going to be initially.

“We had the down scheduling announcement, but then there’s a registration process that follows, which is backed up – and rightly so – by a requirement for body of evidence and clinical trials to support the use of a product at schedule three,” he said.

“And the reality is that takes time and takes money.

“I think a lot of industry players thought it was going to be an overnight thing and it just isn’t.

“It’s a multi-year journey to have that product on the shelves, over the counter, and behind the counter.”


Export markets could be the way to grow

Currently, Canadian imports represent the largest percentage of medicinal cannabis products, both in manufacturing and cultivation.

But there’s several large-scale cultivation and manufacturing facilities coming online and/or ramping up volumes in Australia in the short to medium term – and Wilson expects to see a trend towards increasing domestic cultivation and manufacturing.

But while Australia is a lucrative market, it’s also a small one that’s highly regulated.

“With the intense competition that exists in our domestic market you either need to be operating in a niche with no competitors in the area or be looking toward export markets to survive and grow,” he said.

But he did flag that each market has unique local regulatory conditions and dynamics, so exporting isn’t a guaranteed winning strategy.

“Australia has gone down a purely medical route, meaning that the scope is relatively narrow in our domestic market,” Wilson said.

“Other markets such as the UK allow CBD products to be sold as a food/wellness supplement, while countries such as Canada allow cannabis for recreational use.

“Operating in these jurisdictions, as well as identifying those that are opening up to the idea of cannabis use (in any form: medicinal, wellness, recreational etc.) can give companies more flexibility for commercialisation, as well as capitalise on early-mover advantages.

“This is not to say it guarantees success as everything is down to execution – but it does provide an outlet for growth that may be difficult to achieve if operating purely in our domestic Australian market.”

And tbh Berlin looks like the place to be.

Their public transport authority has released edible hemp tickets as Germany moves to legalise marijuana.

Little Green Pharma has a head start in Europe

Earlier in the year FreshLeaf flagged Little Green Pharma (ASX:LGP) as one company capitalising on the export market, having recently acquired a 20 tonnes per annum facility in Denmark.

Managing director Fleta Solomon said the Danish market is just starting to take off.

“It’s a similar pattern to what happened in Australia where we were at the forefront and when the Australian market opened, we had the first product,” she said.

“We thought it’s really important to capture market share in our own territory and because we own the Denmark facility now, we wanted to do the same there, and have a real presence in Denmark, and to have the first locally grown product registered.”

The company acquired the facility because they were selling out of flower – and needed to quickly add additional biomass as their WA facility is currently capped at three tonnes of flower per annum.

And the Denmark facility is only operating at 25% capacity right now, with LGP planning to scale up to 50%.

“We’ve got a long way to go to fill out before we’re producing at our maximum capability, and that’s the benefit of the Danish facility, we can ramp up and ramp it down based on demand,” Solomon added.

Solomon said that the aim in the long run is for the Australian operations will eventually service the APAC or Oceanic region and the Danish facility will service the international and European market.