Australia's Cannabis Export Market: Facts to Know

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 — previously were not able to exported.

The products originally approved for exporting are cannabis oils, sprays, patches, lozenges and tablets to assist with alleviating pain. In 2020, an amendment to the bill opened the door to the export of cannabis plant products.

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 the country would not be detrimental to Australia. That means companies wanting to export must be able to supply local residents first.

What are 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 couple 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 Little Green Pharma (ASX:LGP), which in 2019 was the first Australian producer to successfully export medicinal cannabis to Germany. In 2021, Australia was Germany’s fifth largest source of cannabis imports.

• 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. In 2022, ECS Botanics (ASX:ECS) accomplished another first by exporting its first shipment of dried cannabis flower to the UK.

What is 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, then-minister of industry, science and technology, said at the time that the market's size could reach AU$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."

Globally, the cannabis market is predicted to expand greatly in the coming years, reaching an estimated US$128.92 billion by 2028 at a compound annual growth rate of 26.19 percent.

Looking at Australia specifically, a study from Grand View Research found that Australia’s legal cannabis market was valued at US$51.8 million in 2021 and is expected to grow at a CAGR of 30.1 percent from 2022 to 2030.

While expectations vary in terms of predicted growth, it’s clear that the market offers opportunities for investors. There are 44 companies with Australian manufacturing licenses for medicinal cannabis, according to the Office of Drug Control.

With government support and companies continuing to develop their overseas strategies, Australia's cannabis export market will be one to watch in the future.