Flying High – Medicinal Marijuana In Australia

This story introduces BOTANIX PHARMACEUTICALS LIMITED and other companies. For more information, SHARE ANALYSIS: BOT

Australia has the potential to become the international gold standard for medical marijuana production, and several ASX-listed companies are trying to capitalize on it.

-The manufacture of medical cannabis products has been legal in Australia since 2016
– Australian medical cannabis sales are set to double to $ 200 million in 2021
-Australia has the potential to become the international gold standard of production

By Nikhil Gangaram

Forget about renewable energies, there is a new concept of “going green” that is getting Australian investors going.

Medical (or medical) marijuana is becoming increasingly accepted by the public both at home and abroad.

Proponents advocate that medical marijuana is a safe and inexpensive therapy for conditions such as chronic pain, multiple sclerosis, and glaucoma. On the contrary, opponents argue that the formalization of marijuana lacks formalized clinical testing and could lead to a whole host of perverse ethical puzzles.

Regardless of the ethical attitude, legalizing all forms of cannabis has enormous economic potential, both domestically and abroad.

Emerging industry

Five years ago, landmark law changes paved the way for regulatory approval for medical cannabis products in Australia.

Changes to the Narcotics Act in 2016 allowed the legal production and manufacture of medical cannabis products in Australia. Although Australia is still making relatively recent advances in this regard, the local sector is growing.

According to the Australian Institute of Health and Welfare, around 600,000 Australians used marijuana for medicinal purposes in 2019. Another 1.9 million reportedly used the substance for non-medical purposes. In addition, medical prescriptions for medical cannabis have tripled in the past year.

Medical cannabis industry researcher FreshLeaf Analytics has forecast that Australian medical cannabis sales could double to $ 200 million in 2021. Fresh Leaf Analytics also found that the number of products has more or less doubled each year since 2018, with 190 prescription products now available.

In addition, a report by research consultancy Prohibition Partners estimates that as various phases of legislation come into effect, the Australian cannabis market has the prospect of a future opening of the recreational market by 2025.

Most recently, the Australian sector reached a milestone after the country’s medical gatekeeper the Therapeutic Goods Administration (TGA) downgraded cannabinoids (CBD) from Schedule 4 to Schedule 3.

As a result, consumers no longer need a prescription and can purchase CBD oils and pills over the counter. FreshLeaf estimates that the pharmacist-only CBD market in Australia will grow to $ 250 million in product sales and reach around 2 million consumers, even when it is ready for the market.

In addition to a thriving local industry, Australian medical marijuana companies are also chasing lucrative overseas markets.

High expectations

Australian law requires that all companies adhere to Good Manufacturing Practice (GMP). As a result, the silver lining of Australia’s sluggish regulatory changes could turn the local industry into a powerhouse in the cultivation and manufacture of medical marijuana.

Medical cannabis products are regulated in Australia by the TGA and the Office of Drug Control (ODC). These strict regulatory standards and the ideal climate could make Australian industry the gold standard of production.

Although many countries are ahead of the curve in building a medical and recreational market, their production standards for pharmaceutical quality have fallen. In the US, for example, marijuana producers must meet the recommended guidelines of the US Food and Drug Administration (FDA), but they do not adhere to the same GMP standards as Australian producers.

Earlier this year, two medical marijuana companies announced they would accelerate development of a $ 400 million greenhouse facility in southeast Queensland. The locally based Australian Natural Therapeutic Group (ANTG) announced a merger with the Canadian Asterion Cannabis.

The merged company aims to build a three greenhouse facility in Darling Downs on 40 acres of land and create hundreds of jobs. According to ANTG, the project will be able to produce more than 500,000 kg of medical cannabis per year.

Much of this production is exported, with ANTG signing a nine-year contract for the supply of cannabis flowers to the German company Cannamedical Pharma.

The development of Australia into a manufacturing powerhouse could enable companies to tap into the lucrative and emerging global industry. Recent research shows that the global medical cannabis market is growing at around 25% per year and will reach $ 67 billion by 2028.

Manufacturing isn’t the only avenue Australian companies want to use.

The new dealers

There are already a large number of companies listed on the ASX that have direct or indirect exposure to this sector. The value chain in the medical cannabis sector is broad, ranging from research and development, production, acquisition and patient access.

Botanix Pharmaceuticals ((BOT)) is currently focused on research and development. The company’s research is aimed at the development of pharmaceutical products in dermatology and antimicrobial applications. Research is focused on harnessing the unique anti-inflammatory and antimicrobial properties of cannabinoids.

As mentioned earlier, Australia is uniquely positioned to become a medical marijuana manufacturing powerhouse.

One of the publicly traded companies that is focused on this is Little Green Pharma ((LGP)). The company was recently assisted by iron ore magnate Gina Rinehart in the purchase of a cultivation and production facility in Denmark. In addition to its European location, the company also has an existing facility in Western Australia that produces 23 tons of medicinal cannabis.

Another part of the medical marijuana value chain is patient access and distribution.

Creso Pharma ((CPH)) develops a range of therapy and lifestyle products for humans and animals that are developed and manufactured according to GMP standards.

Emyria ((EMD)) is another company focused on patient access and drug development. Emyria currently has a network of independent clinical services (Emerald Clinics) and also runs a drug development program.

The grass cover

In Australia, the holy grail for medical cannabis companies is enrollment in the Pharmaceutical Benefits Scheme (PBS).

However, Australia’s strict and deliberate processing means the country could be far from an approved and regulated supply chain.

Meanwhile, Australian medical marijuana companies are trying to pave a way overseas. Regardless of its place in the value chain, there is no doubt that the medical cannabis industry is poised to grow.

Find out why FNArena subscribers like the service: “Your Feedback (Thank You)” – Warning, this story contains outrageously positive feedback on the service offered.

FNArena is proud of its track record and its successes to date: Ten years later

Click here to view our glossary of financial terms