Australian medical cannabis producers worry about a market flooded by imports

The Producers Australians who use medical cannabis warn of an existential threat to the domestic industry: the increase in imports of products that undercut domestic prices and jeopardize the industry’s long-term viability.

The Australian Cannabis Growers Guild, a newly established company representing more than 80% of licensed domestic production, issued a stern warning to the federal government: without regulatory reform, the country risks losing its entire local supply chain.

«Unless something changes, we expect catastrophic bankruptcies among local growers, which will have a long-term impact on Australia’s food supply,» the Guild said in a letter to the federal health minister, as reported by ABC Rural.

An Uneven Playing Field

In 2023, 61% Medical Cannabis consumed in Australia was imported, according to the Therapeutic Goods Administration (TGA), the Australian regulatory agency that oversees the medical cannabis industry.

The agency emphasizes that all imported and domestic products must meet the same quality standards. However, Australian growers claim that the regulatory burden they face is significantly heavier, making competition nearly impossible.

Cade Turland, a Tasmanian farmer and member of the Guild, described the current market as unsustainable: «We’re the world’s trash can,» he told StratCann. «We have products here from countries where wages are one-tenth as high.»

Mr. Turland cited as an example the advantage enjoyed by countries such as the Thailand, theSouth Africa and the Colombia, where labor and compliance costs are significantly lower. These countries can flood the Australian market with cheaper products, leaving domestic producers unable to compete in terms of price or production speed.

The Producers Thai, in particular, are considered a growing threat because of how quickly and inexpensively companies can obtain licenses and begin exporting.

Mathew Dent, director of Wangara Cultivation Co., pointed out that while imports from Canada once filled a need, the new wave of low-cost cannabis from countries such as Thailand is now overwhelming the system.

Regulatory bottlenecks and cost pressures

The installation of a Cannabis cultivation in Australia is both time-consuming and costly. Mr. Turland estimates that it takes between two and four years for a site to become operational, with annual license maintenance costs that can reach 50,000 dollars.

However, importing cannabis into Australia does not require no license fees, according to the TGA.

«The current trajectory will lead to the disappearance or near-disappearance of Australian producers and to a market entirely supplied by imports from countries that do not allow reciprocal imports,» the Guild warned.

This lack of reciprocity is particularly glaring in the case of Canada. While Australia imports significant quantities of cannabis from Canadian producers, Canadian regulations do not allow imports of cannabis grown in Australia.

A Call for an «Australian-First» Policy»

To level the playing field, domestic producers are urging the government to implement a «a procurement model that prioritizes Australia». Under this system, local producers would be given priority in meeting the authorized supply volume, with imports filling only the remaining shortfall, similar to the policies implemented in other sectors.

«We believe that participants with a lower risk profile should have easier access,» said Mr. Turland. «This will be a key factor in serving the market here.»

Industry advocates argue that supporting local culture would not only help secure the domestic market but also create thousands of potential jobs that are currently being lost to offshoring.

Ironically, the Demand for medical cannabis in Australia is booming, with sales in 2024 expected to double compared to those of 2023. But local producers fear they will be left behind if current policies remain unchanged.

While the TGA claims to uphold high standards for all products, the Green Party senator Peter Whish-Wilson, who uses medical cannabis to relieve chronic pain, expressed concern.

«They say they have their backs against the wall,» he said, pledging to raise the issue in Parliament.

Without urgent action, domestic producers say the industry could soon reach a breaking point. As Mr. Turland puts it: «This flood of imports will eventually overwhelm domestic producers» ability to meet domestic demand.”