map of Australia with cannabis plants

What Investors Should Know About CBD in Australia

Interest in CBD in Australia is rising as the country's cannabis industry develops. What should investors know about this growing market?

Over the past five years, awareness about the medicinal properties of CBD has been growing. Although Australia's cannabis industry is still young, CBD hasn't escaped market watchers' attention.

CBD is a cannabidiol, meaning it is a compound found in the actual cannabis plant. It has steadily become a favourite in the development of novel products with various health uses. Part of its attraction stems from the fact that CBD lacks a heavy psychoactive nature, unlike its fellow molecule THC.

Although still in its infancy, research has shown CBD has anti-inflammatory properties, while offering the promise of more developed uses. It is gaining traction as a treatment for illnesses and conditions such as anxiety, post-traumatic stress disorder, depression, eating disorders, attention deficit hyperactivity disorder, migraines and some chronic pain disorders — to name just a few.


With so much potential, it's clear why CBD has entered the spotlight. Read on to learn more about the CBD landscape in Australia, including whether it's legal, how it can be accessed and how big the market is.

Is CBD legal in Australia?

CBD has been legal in Australia since 2015 providing it is at least 98 percent cannabidiol.

The country's CBD rules have developed over the years, indicating Australia's changing understanding surrounding the cannabis compound as it relates to common uses.

Previously, anyone wishing to use CBD in the country had to first find a doctor to make an application to the Therapeutic Goods Administration (TGA). A general practitioner could do this, or patients could visit specialised cannabis access clinics to receive help.

However, on February 1, 2021, low-dose CBD products became legal to purchase over the counter. This development came after the TGA approved a scheduling change for the drug, moving it from Schedule 4 (prescription only) to Schedule 3 (available over the counter at any pharmacy).

Even with this switch, Australia still has significant control measures in place for CBD.

First off, CBD products sold over the counter must be included on the Australian Register of Therapeutic Goods. Another restriction comes in the way of the dosage. CBD products sold over the counter in Australia can't go over 150 milligrams for use per day.

There is also the issue of timing. Despite the change in CBD regulations, Iain McGregor, psychopharmacologist and academic director of the Lambert Initiative for Cannabinoid Therapeutics, told the Guardian he doesn't expect to see any CBD products available in Australia until "six to 12 months" after the February rule change.

Australian cannabis research firm FreshLeaf Analytics has concurred with McGregor, indicating that the TGA's standards will be a significant challenge for CBD companies to clear. Various domestic cannabis producers have told investors they are working on meeting the requirements to begin the sale of CBD products.

Ordering CBD oil from another country to be delivered in Australia remains illegal.

How can CBD be accessed in Australia?

As mentioned, methods of accessing CBD in Australia are currently in flux. While over-the-counter purchases will soon be allowed, they're not possible quite yet.

For now, those who want to purchase CBD in the country must go through the process outlined above — they have to find a doctor to make an application to the TGA, or visit a specialised cannabis access clinic.

There are more than 100 unregistered products (oils, capsules, cannabis flower and buccal sprays) with varying CBD and THC content currently available for prescription through the TGA. Nabiximols (trading and sold as Sativex) is the only registered cannabis-based medicine in Australia.

New analysis published in the International Journal of Drug Policy shows that CBD-containing products in Australia under the original TGA maximum dose of 60 milligrams per day may not be high enough to benefit patients. Research from the Lambert Initiative from the University of Sydney indicates that a CBD dose of 300 to 1,500 milligrams per day is required to see health benefits.

In November 2020, the TGA increased the maximum daily dosage to 150 milligrams, which is set to benefit CBD importers and distributors.

How big is Australia's CBD market?

Australia's CBD market is dominated by a mix of local and international companies. Local players are pushing to increase their consumer base, exports and geographic presence in Australia.

A recent Grand View Research Report puts the size of the country's legal cannabis market at US$235.7 million in 2020, and it is forecast to boom to US$1.9 billion by 2026.

It's expected that the changes in CBD access rules mentioned above will have positive impacts for Australian cannabis companies like Cann Global (ASX:CGB), which has an import permit for two CBD pill products with partner Canntab Therapeutics (CSE:PILL,OTCQB:CTABF).

Last September, Business News Australia reported that shares of medicinal cannabis companies jumped after the news of over-the-counter CBD sales. As well as Cann Global, BOD Australia (ASX:BDA), Elixinol Wellness (ASX:EXL,OTCQB:ELLXF), Althea Group Holdings (ASX:AGH), Medlab Clinical (ASX:MDC), Zelira Therapeutics (ASX:ZLD,OTCQB:ZLDAF), IDT Australia (ASX:IDT) and Little Green Pharma (ASX:LGP) made moves.

As Australia's CBD market continues to develop, investors will be monitoring it closely, especially as the country comes closer to selling CBD products over the counter.

Don't forget to follow @INN_Australia for real-time updates!

Securities Disclosure: I, Ronelle Richards, hold no direct investment interest in any company mentioned in this article.

Australia's Cannabis Export Market: Facts to Know

The legalisation of medicinal cannabis in Australia, along with the decriminalisation of cannabis in the Australian Capital Territory, is creating opportunities for the export market.

But what types of cannabis products are being exported from Australia and where are they going?

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10 ASX Cannabis Stocks

The Australian cannabis market has been maturing since medical marijuana was federally legalised in 2016.

The next year, Food Standards Australia New Zealand legalised low-THC hemp food for human consumption in Australia. The country went on to legalise medical marijuana exports in 2018, allowing medicinal marijuana products developed in Australia to be exported to licenced recipients in countries where the drug is legal.

Recreational cannabis remains federally illegal in the country, but recent legislation shows the door may be opening. In 2019, the Australian Capital Territory passed a bill allowing for the possession and growth of small amounts of cannabis for personal use. The law went into effect on January 31, 2020.

More recently, in late 2020, the Therapeutic Goods Administration greenlit the sale of low-dose cannabidiol (CBD) through over-the-counter methods without a prescription. The ruling from the Australian regulatory agency is expected to officially come into effect in February 2021.

With these and other changes in the works, Australia’s cannabis industry is projected to have long-term potential. The legal cannabis market in Oceania is expected to be worth US$1.55 billion by 2024, with Australia accounting for 79 percent of the region’s market, Prohibition Partners forecasts.

According to a study from FreshLeaf Analytics, the value of the medical market in Australia reached AU$95 million in 2020, and the firm expects revenue to jump again to over AU$150 million in 2021. In short, Australia’s role in the global cannabis industry will certainly continue to grow.

Here the Investing News Network profiles 10 ASX cannabis stocks with market caps between AU$30 million and AU$225 million. All ASX cannabis stocks below are listed in order of market capitalization from largest to smallest, with data compiled using TradingView’s stock screener on January 12, 2021.

1. Creso Pharma (ASX:CPH)

Market cap: AU$209.83 million

Creso Pharma was the first company to import medical cannabis into Australia and the first to launch these products in Switzerland for people, as well as animals. The cannabis company’s anibidiol product was the first hemp CBD complementary feed in animal health thanks to a partnership with Virbac Switzerland. Creso Pharma has also launched cannaQIX in Switzerland; it was the first CBD nutraceutical in human health.

The company’s medicinal cannabis product lines cover therapeutics, nutraceuticals, animal health, lifestyle and topicals.

2. Cann Group (ASX:CAN)

Market cap: AU$176.84 million

Cann Group provides a range of medicinal cannabis products for patients in Australia and globally. In 2017, the company was granted Australia’s first cannabis research licence, as well as the first medicinal marijuana cultivation licence. Cann Group partners with leading medical scientists in Australia to research and harness the therapeutic potential of cannabinoids, terpenes and other bioactive constituents of cannabis.

The company has secured supply agreements in global cannabis markets, including the UK, Germany and other European segments.

3. Incannex Healthcare (ASX:IHL)

Market cap: AU$166.42 million

Incannex Healthcare is a clinical-stage cannabinoid medicine company with global export capacity. It has four clinical programs underway for the development of a variety of cannabis medicinal products aimed at major unmet medical needs, including obstructive sleep apnea, traumatic brain injury/concussion, sepsis-associated acute respiratory distress syndrome and temporomandibular joint disorder.

In 2020, the company worked to advance its clinical trials. By the second half of the year, cannabinoid products accounted for Incannex’s entire revenue stream.

4. Botanix Pharmaceuticals (ASX:BOT)

Market cap: AU$131.37 million

Botanix Pharmaceuticals has a product pipeline that includes three advanced clinical programs using synthetic cannabidiol for the topical treatment of serious skin diseases and for antimicrobial applications. The company also has an exclusive licence to use a proprietary drug-delivery system called Permetrex for direct skin delivery of pharmaceuticals.

Botanix Pharmaceuticals’ programs are focused on treating acne, rosacea, atopic dermatitis and microbial infection. The company secured a clear development path for its BTX 1801 synthetic cannabidiol antimicrobial product after the successful completion of a pre-investigational new drug meeting with the US Food and Drug Administration.

5. Althea Group Holdings (ASX:AGH)

Market cap: AU$114.2 million

Althea Group Holdings takes the concept of medical cannabis a step further with its work as a pharmaceutical-grade cannabis supplier. In addition to offering relief through accessible medical cannabis, the company is implementing components of the plant in its research on advanced drugs.

Althea has successfully expanded into the global cannabis market with a wholesale supply agreement to import a range of Althea-branded finished products for sale and distribution in South Africa beginning in Q2 2021. This agreement came on the heels of the news that the company is slated to become the first commercial supplier of Australian medicinal cannabis extract products to the German market, with all necessary licences for sale and distribution granted by the German government.

6. Zelira Therapeutics (ASX:ZLD)

Market cap: AU$113.79 million

Zelira Therapeutics’ efforts are on unmet clinical needs and on using medicinal cannabis to treat a range of diseases and disorders. Its most common target areas include pain, anxiety and sleep.

Zelira is largely focused on developing treatment options using plant-based medicinal marijuana, and currently has three clinical-stage programs with a focus on insomnia, autism and opioid reduction. The company is also conducting a pre-clinical research program to test cannabinoids in breast, brain and pancreatic cancer.

7. Medlab Clinical (ASX:MDC)

Market cap: AU$75.51 million

Medlab Clinical is a medical research and development company focused on novel biotherapeutics such as nutraceuticals and pharmaceuticals. The company is also developing pharmaceutical cannabis products.

In early 2020, Medlab Clinical launched the NanaBis Observation Study in Australia. NanaBis is a cannabis-based pain treatment drug that may prove useful as an alternative to opioid medication. It is also being used to investigate cancer pain management.

8. BOD Australia (ASX:BDA)

Market cap: AU$49.25 million

BOD Australia is focused on cannabis and hemp-related products. It develops, distributes and markets health and skincare products created using plant-based extracts in Australia. The company secured a foothold in the European cannabis market in 2020 with a AU$200,000 purchase order for four Swiss-branded hemp seed oil products to be sold in France, the Netherlands and the UK.

BOD Australia’s reach in Australia ranges from selling prescription and over-the-counter products to more than 1,000 outlets, such as pharmacies, retail stores and healthcare chains. It also has distribution agreements with two pharmacy wholesalers in Australia.

9. IDT Australia (ASX:IDT)

Market cap: AU$42.47 million

One of Australia’s oldest listed life science companies, IDT Australia is a pharmaceutical manufacturing company with extensive experience in the development and production of pharmaceutical products. Through its GMP-compliant facilities, the company provides full-scale services for new drug development, plus scale-up and commercial active drug manufacturing for local and international clients.

IDT Australia’s clients include Cann Group; IDT Australia is the manufacturer of the medical cannabis products that are a part of two of Cann Group’s export supply agreements with European and UK partners.

10. MMJ Group Holdings (ASX:MMJ)

Market cap: AU$31.04 million

MMJ Group Holdings has a wide range of cannabis investments, including healthcare products, technology, infrastructure, logistics, processing, cultivation, equipment, retail and research and development.

Among other companies, it has invested in Harvest One Cannabis (TSXV:HVT,OTCQB:HRVOF), which develops health and wellness products; Fire & Flower Holdings (TSXV:FAF,OTCQX:FFLWF), a recreational cannabis retailer that’s developed a variety of cannabis products and accessories; and MediPharm Labs (TSXV:LABS,OTQQX:MEDIF), a cannabis extraction company that received its cannabis oil production licence from Health Canada in 2018. MediPharm Labs has launched cannabis extraction services in Australia.

Investor takeaway

The presence of these ASX-listed cannabis companies shows that the cannabis industry in Australia is undoubtedly growing, as are investment opportunities in Australia’s cannabis industry. While recreational marijuana remains illegal in the land down under, the medical cannabis industry is thriving, making that side of the sector worth considering.

So far, Australia has no timeline attached to the legality of recreational use of marijuana, but it will be a story to watch over the coming years for those interested in the space.

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