Australia's medical cannabis market set to overtake Europe's biggest players

Outside North America, investors and business leaders in the cannabis industry tend to focus on Germany, Poland and United Kingdom, which are the main drivers of the industry's growth medical cannabis.

However, one market has the potential to surpass them all and appears to be on track to do so in the near future.

According to the new Global Cannabis Report: 5th Edition, according to a report released today, revenue from medical cannabis in Australia is expected to grow from approximately $600 million in 2024 to more than $1.2 billion in 2028.

By way of comparison, this represents more than half of the projected value of all sales of medical cannabis in Europe by 2028 (2.2 billion U.S. dollars by 2028), with sales in Germany alone accounting for 1.2 billion U.S. dollars.

Beyond an Emerging Market

Australia has experienced a rapid growth in recent years, with units sold rising from 1.7 million in 2022 to approximately 3.2 million in 2023.

This growth trend appears to have continued throughout 2024, with the latest available data showing that 2.9 million units were sold during the first half of the year.

According to the report, this increase is due to the rapid rise in the number of patients, the number of prescriptions, and imports.

As in other EU markets, one of the main drivers of this growth has also been the boom in telehealth clinics, which have effectively reduced the main bottlenecks in patient access.

Once again, like their European counterparts, these telehealth companies are now coming under increasingly close scrutiny due to concerns that they may sometimes be targeting consumers for recreational purposes.

After medical professional organizations raised concerns about underregulation in the sector, an investigation revealed that some practitioners were issuing 90 prescriptions a day to patients. A task force was launched in July 2024, leading to an update of the telehealth guidelines and the revocation of licenses for a number of clinics and health centers.

National Culture

Unlike Germany and the United Kingdom, Australia also has a rapidly evolving domestic cultural market. In 2023, domestic production increased by 6.7 %, reaching 26.6 metric tons.

However, like these markets, Australia currently relies on Canadian imports to supply its market. That same year, imports increased by 69 % to reach 42.1 metric tons, of which 80 % came from Canada.

As in the Israeli market, which is considering imposing tariffs on Canadian imports, local producers expressed frustration with low-priced Canadian cannabis, accusing it of flooding the market and driving wholesale prices down from 6 AU$ per gram in 2023 to 4–4.50 AU$ in 2024.

Exports also increased, with 2023 figures showing a rise of 36.8 % to more than 2 metric tons. The main destinations are Germany (839 kg), the United Kingdom (640 kg), and New Zealand (587 kg). Emerging markets such as Thailand and Uruguay have also been added to Australia’s export portfolio for the first time.

Although the Australian cannabis market faces regulatory hurdles and close industry scrutiny, the rapid growth of medical cannabis and the expansion of global trade make Australia a key player in the international cannabis landscape. With sustained public support for reform and ongoing legislative efforts, the future of legalization for adult use and broader market opportunities remains a key focus for stakeholders.

Reform of adult use?

The The Australian Greens spearheaded the effort efforts to legalize cannabis for adults by introducing the « Legalising Cannabis Bill 2023 » (bill to legalize cannabis) in August 2023. The bill proposed allowing adults to grow up to six plants, regulating cannabis cafes, and creating a national agency to oversee cannabis-related activities, including manufacturing and export.

Despite early public support—reflected in a December 2023 YouGov poll showing 50 % approval for personal cannabis cultivation and 54 % in favor of decriminalization —the Senate Committee on Legal and Constitutional Affairs rejected the bill in May 2024, citing the health risks highlighted by organizations such as the’Australian Medical Association (AMA).

The Global Cannabis Report by Prohibition Partners: The 5th Edition launches today and can be downloaded here.