But what types of cannabis products are being exported from Australia and where are they going?
Read on for a look at Australia's cannabis export market, including how it started up, where the country sends its cannabis products and what could be next as the nation's marijuana space develops.
When did Australia legalise cannabis exports?
Australia legalised the export of medicinal cannabis products in February 2018, about two years after cannabis was legalised in the country for medicinal and research purposes.
However, while medicinal cannabis products can now be exported from Australia, the cannabis plant — the flowers and leaves, as well as cannabis resin — cannot be exported. Some of the products approved for exporting are cannabis oils, sprays, patches, lozenges and tablets to assist with alleviating pain.
All exports must conform with the Narcotic Drugs Act 1967; among other requirements, companies must have both a licence and permit to export from the Office of Drug Control, and must be listed on the Australian Register of Therapeutic Goods.
Furthermore, exports are only allowed when sending the material out of country would not be detrimental to Australia. That means companies wanting to export must be able to supply local residents first.
Australia's top cannabis export markets
Cannabis exports from Australia have been legal for around three years now. So where have companies in the country been sending shipments of the drug? A few standout markets are:
- Germany — The nation is one of the largest cannabis markets in Europe, and relies heavily on imports to satiate growing demand. It receives products from companies such as Australia's Little Green Pharma (ASX:LGP), which in 2019 was the first Australian producer to successfully export medicinal cannabis to Germany.
- UK — Little Green Pharma also began exporting medicinal cannabis oil to the UK in 2020. The company said at the time that it was the first Australian company to do so. Distribution is through the UK's Astral Health.
Recent developments in Australian cannabis exports
Looking at Australia's more recent cannabis export activities, privately owned Australian Natural Therapies Group (ANTG) sent its first batch of medicinal cannabis to Germany in January of this year.
The shipment was part of a $92 million export agreement that Australian Minister for Health Greg Hunt has said has the potential to boost economic growth in Australia.
"Australia's gold-standard regulation of medicinal cannabis products, coupled with a premium agricultural and manufacturing industry, means we are well positioned to become a preferred supplier," he noted.
The German cannabis market is reportedly the third largest in the world, and the decade-long agreement will see about 2 tonnes of locally grown and dried cannabis flower exported by mid-2022.
In April, ANTG announced a merger with Canada's Asterion Cannabis. Together, the two companies aim to build a large $400 million cannabis farm in Queensland, near Toowoomba's Wellcamp Airport. The close location will allow for large-scale exports of commercially grown medical cannabis to Europe.
Asterion also previously revealed plans to list on the Toronto Stock Exchange in the fall of 2021.
The future of cannabis exports in Australia
Since cannabis exports were first legalised, Australia has made an effort to keep moving forward.
In December 2019, the federal government granted major project status for the development of new medicinal cannabis facilities in Queensland and Victoria.
Karen Andrews, minister of industry, science and technology, said at the time that the market's size could reach $1.2 billion industry over the next decade.
"Australia's trusted reputation for medical products combined with our top quality agriculture sector will propel this new domestic industry into the global market," she said.
"By acting now and fast-tracking medicinal cannabis facilities, we have an opportunity to create an entirely new industry with tremendous export potential."
Since then, the country has amended laws in a bid to position its cannabis and hemp exporters to thrive after COVID-19. Speaking when the changes were made in mid-2020, Minister of Agriculture David Littleproud said they would broaden legislation to allow for certification of medical marijuana and hemp exports.
"This bill will enable the growth of export markets for hemp and medicinal cannabis industries. The bill will support the initiatives of the government to reduce red tape, bust congestion in regulation and enable agricultural industries to come out firing, after the threat of COVID-19 has passed," he explained.
With government support and companies continuing to develop their overseas strategies, Australia's cannabis export market will be one to watch in the future.
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Securities Disclosure: I, Ronelle Richards, hold no direct investment interest in any company mentioned in this article.