New data from Health Canada has revealed that Australia and Israel were the top buyers of Canada’s medical marijuana exports in 2022. Figures shared through MJBizDaily show that the two nations were the largest markets for Canadian medical cannabis importers amid a surge in cannabis exports from Canada.
Medical cannabis flower exports from the North American nation totaled around 132,200 pounds for fiscal year April 2022 through March 2023 and went up by 48% from the previous fiscal year’s roughly 90,000 pounds. Close to 80% of medical marijuana flower exports from Canada (104,000 pounds) went to Australia and Israel and 16% (21,000 pounds) went to Germany.
Canada has exported 277,000 pounds (126,025 kilograms) of medical marijuana flower for commercial and scientific use since 2017, MJBizDaily reports. The value of Canada’s medical marijuana exports in 2022 also increased by 50% from the fiscal year 2021–2022 to around $118 million. However, while players in the cannabis industry are likely pleased with the increased international demand for their cannabis flower, relying on three nations for the majority of exports puts the Canadian medical marijuana export segment at significant risk.
According to Miguel Martin, the CEO of Edmonton, Canada, cannabis producer Aurora Cannabis, investing in medical marijuana flower exports is a “long-term play.” He noted that export margins are 2.5 times higher than margins in the local recreational marijuana market and are “not declining.”
Although Australia and Israel were both major importers of Canadian medical cannabis flower, Australia imported most of Canada’s cannabis extracts in 2022. Of the 2,388 gallons of medical cannabis extract Canada exported last year, 2,217 gallons went to Australia followed by the Cayman Islands at 845 gallons, and Brazil, Barbados and South Africa at 35 gallons, 27 gallons and 23 gallons respectively.
Cannabis producers in Canada have become increasingly focused on the international market due to higher margins compared to the Canadian market, which is plagued with issues such as oversaturation and oversupply. Additionally, excise taxes levied by Canadian authorities on cannabis products reduce margins for cannabis producers in local markets and incentivize them to seek business partnerships with buyers in other nations.
Thanks to significantly reduced competition in foreign markets such as Israel and Australia, Canadian medical cannabis exporters don’t have to worry about sharing their market with an increasing number of sellers. However, nations such as Denmark and Columbia are becoming increasingly relevant in the global cannabis trade and may soon begin eating into Canada’s market share. Companies such as SNDL Inc. (NASDAQ: SNDL) therefore have to step up their innovativeness even more in order to stay ahead of the competition.
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