Australia's Medical Cannabis Market Set to Out Grow Europe's Biggest Players (Markets)
January 25, 2025
Outside of North America, cannabis investors and business owners tend to focus on Germany, Poland and the UK as the major medical cannabis industry growth drivers.
However, one market has the potential to outgrow them all and looks to be on track to do so in the near future.
According to Prohibition Partners’ new Global Cannabis Report: 5th Edition, launching today, Australia’s medical cannabis revenues are expected to grow from around US$600m in 2024 to more than US$1.2bn by 2028.
For comparison, this is over half of the projected value of all medical cannabis sales in Europe by 2028 (US$2.2 billion by 2028), with Germany’s sales accounting for US$1.2bn alone.
Beyond an emerging market Australia has experienced rapid growth over the last few years, seeing units sold skyrocket from 1.7m in 2022 to around 3.2m in 2023.
This growth trajectory looks set to have continued throughout 2024, with the latest available data showing that 2.9m units were sold in the first half of the year.
According to the report, this surge was driven by rapidly increasing patient numbers, prescription numbers and imports.
As seen in numerous EU markets, a key driver of this growth has also been the explosion of telehealth clinics, which have effectively reduced major bottlenecks in patient access.
Again, like its European counterparts, these telehealth businesses are now coming under increasing scrutiny amid concerns they are targeting recreational users.
After concerns were raised by professional medical bodies regarding the under-regulation of the industry, an investigation found that some practitioners were issuing 90 prescriptions to patients a day. A response unit was subsequently launched in July 2024, leading telehealth guidelines to be updated and seeing a number of clinics and dispensaries lose their licenses.
Domestic cultivation
Unlike Germany and the UK, Australia also has a rapidly evolving domestic cultivation market. In 2023, domestic production increased 6.7%, reaching 26.6 tonnes.
However, like these markets, Australia is also currently reliant on Canadian imports to supply its market, seeing imports surge 69% to 42.1 tonnes the same year, 80% of which were Canadian.
As seen in the Israeli market, which is looking at imposing tariffs on Canadian imports, local producers voiced frustrations over low-cost Canadian cannabis, accusing them of flooding the market and driving wholesale prices down from AU$6 per gram in 2023 to AU$4-4.50 in 2024.
Exports also expanded, with 2023 figures showing a 36.8% increase to over 2 tonnes. Key destinations included Germany (839kg), the UK (640kg), and New Zealand (587kg). Emerging markets like Thailand and Uruguay also joined Australia’s export portfolio for the first time.
While Australia’s cannabis market faces regulatory hurdles and industry scrutiny, its rapid growth in medical cannabis and expanding global trade position it as a critical player in the international cannabis landscape. With sustained public support for reform and ongoing legislative efforts, the future of adult-use legalization and broader market opportunities remains a focal point for stakeholders.
Adult-use reform?
The Australian Greens spearheaded efforts for adult-use cannabis legalisation, introducing the ‘Legalising Cannabis Bill 2023’ in August 2023. The bill proposed allowing adults to cultivate up to six plants, regulate cannabis cafes, and establish a national agency to oversee cannabis activities, including manufacturing and exporting.
Despite early public support—reflected in a December 2023 YouGov poll showing 50% approval for personal cannabis cultivation and 54% favouring decriminalisation—the Senate on Legal and Constitutional Affairs Committee rejected the bill in May 2024, citing health risks highlighted by organisations like the Australian Medical Association (AMA).