The marijuana business in Australia is booming, with farms in the country expanding to capitalize on growing demand. Estimates show that global legal marijuana spending may hit $153 billion by 2027. This is quite an increase, especially when compared to the $56 billion spent in 2022.
While most of the growth has been driven by consumers of recreational marijuana in the United States, companies in Australia are focusing on the medical marijuana side of this market. Numbers of medical marijuana patients in Europe are expected to increase by more than 230% during the next four years. This may significantly bolster the European market, with projections from Prohibition Partners expecting that by 2027, spending in Europe may reach $3.3 billion.
While this isn’t a huge fraction for the Canadian and U.S. markets, it’s a significant opportunity for companies such as Australian Natural Therapeutic Group. CEO Matt Cantelo stated that Germany was the primary focus with its fairly progressive stance on medical marijuana.
The company, which has facilities in Queensland and New South Wales, has been exporting its products to Germany since 2020. This is mainly because of UN treaties and the lack of a domestic commercial market, which limits the import and export of recreational cannabis.
With new laws making it easier for Germans to access medical marijuana with a prescription and the nation itself legalizing recreational marijuana, Cantelo expects demand to increase significantly.
Australian Natural Therapeutic Group (ANTG) recently entered into a decade-long supply deal with a company in Cologne, a move that will see the Aussie company increase its total annual production to 4.5 tons from a mere 2.5 tons. Cantelo expects that the new contract will also help create new jobs across the company’s Brisbane and Armidale sites.
Little Green Pharma, a manufacturer and grower, is also working to meet forecasted demand. CEO Paul Long revealed that the company’s focus was on France, which could have a legal medical marijuana market by 2025. He explained that he expected the many French people currently using marijuana illegally to shift to legal medical use. Data from the U.N. estimates that 6.8 million French people use marijuana illegally.
Long expected a similar shift in Australia’s market, which had recorded considerable increases in prescriptions since 2016, when it legalized the use of medicinal marijuana. The cannabis industry as a whole hopes that the relaxation of regulations in Europe will increase the total cannabis produced for domestic and overseas use.
As more jurisdictions in Europe consider enacting cannabis law reforms, more established companies, such as Canopy Growth Corp. (NASDAQ: CGC) (TSX: WEED), from more mature markets could significantly expand their reach on the continent.
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