Cannabis research firm FreshLeaf Analytics thinks 2020 will be a year in which Australia’s pot sector will catch a rocket.

Even though Biotech Daily’s data shows the collective market capitalisation of ASX-listed medical cannabis stocks tumbled 28.8 per cent to $763m in February — its lowest point since October 2017 — despite welcoming two new ASX debutantes to the fold, FreshLeaf reckons the industry is nearing a breakout.

According to Biotech Daily, “cannabis is cactus”.

But FreshLeaf disagrees. It labelled 2019 a “cracker year” because it was the year the market became a reality. And looking forward it anticipates an even bigger year in 2020.

The research firm predicts the number of people taking medicinal cannabis will triple in 2020 and that sales will also triple, to $150m.

FreshLeaf is also of the view that Cannabidiol (CBD) will become an over-the-counter medication.

But with sector growth will come fierce competition. There are 100 products already on the market, with still more to come.

According to FreshLeaf, generic products will have to compete on a margin-thin price per milligram, but technologically innovative producers with differentiated products could charge a premium.

“By [differentiated] we don’t mean just another oil with a slightly different CBD:THC ratio, or a special plaint ‘strain’ with an organic certification,” FreshLeaf said.

“Truly differentiated products require innovative and useful improvements to bioavailability and therapeutic outcomes, backed by published peer-reviewed studies and actual data.

“We are also excited about the possibilities for new cannabinoids not previously commercially available to enter the market, and the potential for combination therapies with both drug and non-drug interventions.”


2020 will bring commercially meaningful patient levels

Cannabis analysts from other firms welcomed the report and agreed 2020 would be a solid year for the sector.

A key metric for the sector is the number of active patients — FreshLeaf predicts 30,000 active patients  in 2o20.

The CEO of Southern Cannabis Holdings, Tim Drury, said 2020 would be a key year. He said the number of active patients reached a commercially meaningful level.

“The Australian market has already been a leader of best-practice in product standards, patient monitoring, clinical services and research, and is now showing signs of maturity to ‘Cannabis 2.0’, the next phase of industry growth defined by companies with real revenues, cash-flows and profits,” he said.

Mark Bernerg, from cannabis investment consultancy The Green Fund, agrees.

“The latest FreshLeaf Analytics report confirmed what many of us in the industry already thought – that the Australian medicinal cannabis industry is one of the fastest growing on the planet,” he said.