This article was published on October 26th 2018. The estimates and projections contained within this article were accurate as of this date.
For a 2020 update on the cannabis industry across Australia, New Zealand and surrounding islands, download The Oceania Cannabis Report: Second Edition, which was published April 2020. Click to download.
As of 2018, Oceania’s total estimated cannabis market value is worth US$5.6 billion. An estimated 1 in 13 people aged 15 to 64 already use cannabis across its more than 30 countries and territories. However, there remains plenty of room for growth, in large part due to the region’s progressive politics and efforts to improve access to medical cannabis in Australia via a newly formed special access scheme and a register of authorised prescribers.
The region is undergoing a crucial and exciting period of development over the next few years that could shape its future in the global cannabis industry. While nothing is certain, we expect that full legalisation of medical cannabis and regulation of recreational cannabis will materialise in Oceania by 2023.
More specifically, the region will be looking at a US$2.5 billion medical cannabis market in just 10 years, assuming a fully legal and regulated market is in place. Additionally, the recreational cannabis market is expected to be worth a potential US$6.2 billion by 2028, while the industrial market may be valued at US$18.6 million by the same year. Both figures are also estimated under the assumption that a fully regulated and legalised market is established by 2023.
Canada, which recently became the first G7 country to fully legalise cannabis, is already capitalising on the region’s high consumption, as Oceanian nations remain highly dependent on Canadian imports, as detailed in The Oceania Cannabis Report™. In 2017, Australia was the world’s second biggest destination for cannabis products, importing 145 kilograms of cannabis oil from Canada.
Export Australia medical cannabis market key for growth
Oceania also has the potential to export and supply cannabis to other parts of the world. The region boasts an ideal climate for growing certain cannabis strains that would be expensive to cultivate elsewhere. In addition, the region’s geopolitical stability serves as a positive sign for cultivators and investors. Australia’s healthy trade relationship with Asia is a testament to this, as an estimated 72% of the country’s exports (mostly mining and agricultural) are bound for the continent. Australia’s reputation as a trusted source of medicines and pharmaceuticals further adds credibility the domestic cannabis industry.
Currently, most of the medical cannabis produced regionally remains within Oceania. However, The Oceania Cannabis Report™ finds evidence that local companies are already positioning themselves as potential exporters. In September 2018 the Australian Natural Therapeutics Group (ANTG) announced a partnership with Cannamedical Pharma, one of Europe’s leading independent cannabis wholesalers, for export and distribution of ANTG’s cannabis across German pharmacies (starting in 2019).
Australia medical cannabis / recreational dominate the cannabis market
Australia and New Zealand, being the largest and most populous countries in Oceania, are understandably the heavyweights of the regional cannabis industry.
Medical cannabis was legalised in Australia in 2016, and since then 1,059 patients have so far been prescribed medical cannabis, according to data from the Ministry of Health obtained for the report.
Access to medical cannabis remains complicated and varies from state to state. It’s a lengthy process where doctors either become an authorised prescriber, or make an application for their patients through the Therapeutic Goods Administration (TGA) Special Access Scheme. Patients cannot directly apply for access.
In March 2018, the New South Wales government took a step in the right direction when it announced a single application to improve patient access to unregistered cannabis medicines. The change has so far contributed to an increase in patient numbers across some Australian states.
Should Australia manage to improve patient access across all its states, the country could see a significant rise in the number of medical cannabis patients. As many as 400,000 medical cannabis patients are expected by 2028.
New Zealand faces similar challenges when it comes to access to medical cannabis. The possession of any amount of cannabis is illegal under the Misuse of Drugs Act 1975. While Sativex and CBD products have been approved in recent years, they can be costly and difficult to procure.
This will change if the bill to regulate New Zealand’s medical cannabis is approved (as expected) in November 2018. The new regulations proposed by the bill will likely be implemented in 2019.
Beyond medical cannabis, New Zealand has also already committed to a referendum on recreational cannabis legalisation come 2020.
Potential cannabis growth in smaller island nations
Beyond the big players, Oceania’s smaller countries and territories are also making some significant strides that should contribute to the region’s advancement in the cannabis industry.
Based on available data, Prohibition Partners forecasts that the cannabis industry for the rest of Oceania will be worth US$179.3 million by 2028. It is possible that the number could be significantly higher, but data is not yet available for all of Oceania’s countries and territories.
Guam became the first US territory to legalise medical cannabis in 2014, while the Commonwealth of the Northern Mariana Islands was the first to go from total prohibition to full legalisation of cannabis. It was a swift process that saw no opposition from lawmakers. This is in contrast with US states, which have traditionally first established a medical cannabis programme before legalising recreational cannabis.
It’s not as smooth-sailing for others in the region, however, as Palau failed to move forward with legalising cannabis for medical use in 2015. American Samoa also still operates a zero-tolerance policy on cannabis use or possession.
Despite Oceania’s overall potential, the research from Prohibition Partners suggests the region still needs to put emphasis on access to information on cannabis in its recreational, medical and industrial capacities. Education is needed for all stakeholders, from governments and medical professionals to individuals, particularly patients who might benefit from medical cannabis but are hesitant due to the stigma surrounding it.
For further in-depth analysis, insights and forecasts on Oceania’s cannabis industry, download The Oceania Cannabis Report™ now.