Medical Cannabis Barriers Too High For Australian Businesses To Climb

Although the production of medical cannabis has been legal Australia-wide since 2016, expensive fees and permit costs are preventing small businesses from entering the rapidly growing industry. 

Last week, the Office of Drug Control (ODC) released a full list of fees applicable to medical cannabis companies. Annually, medical cannabis businesses must pay the following fees. 

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Businesses incur further charges if found to be non-compliant to the Narcotic Drugs Regulation 2016 act. Currently, less than 100 Australia companies have manufacturing licenses for medical cannabis, as the application alone costs a non-refundable $7.960 plus $3,410 for processing the application. 

Unfortunately, the high barriers to enter the market are also preventing Aussie-owned businesses from competing in their home market. While companies like Perth’s Little Green Pharma have secured some market share, Australian businesses are being overrun by foreign competitors with deep pockets. Unless a startup has $184 million to spend on a production facility, the odds aren’t in their favour. 

According to Legalise Cannabis Queensland’s Deb Lynch, large pharmaceutical companies are dominating Australia’s medical cannabis industry. 

The big corporations have a monopoly on providing medical cannabis as one by one they swallow up our producers.

While this excludes small businesses and producers from the medical cannabis industry, it also prevents patients from using products like edibles and balms for treatments. As cannabis products are strictly controlled, medications do not suit the wide need of Australia’s patients. Medical cannabis companies are also unable to advertise their products, so patients and doctors are only made aware of a handful of products. Long term, this could stifle the industries growth. 

Cannabis advocates like Legalise Cannabis Queensland are advocating for government grants for small businesses, but until startups can afford to produce cannabis, the industry will remain monopolized. 
By 2025, Australia’s medical cannabis industry could be worth $1.5 billion, but unfortunately, that industry will exclude likely small businesses.