CBD in Australia is regulated in the same way as cannabis; it requires a medical prescription that must be obtained from a physician. While the government has been slow to make changes, it is currently considering rescheduling CBD to allow for over-the-counter sales (with some restrictions).
| Population | GDP per Capita | Healthcare Spend per Capita | Cannabis Use | Average Price per 500 mg Tincture | 2020 Market Potential |
|
25 million |
$56,352 |
$5,002 |
10.4% |
$60 |
US $17.4 million |
The primary pieces of regulation that govern Australia’s medical cannabis market are The Narcotic Drugs Amendment Bill (February 2016) and the Narcotic Drugs Regulation (October 2016). At a high level, these two laws detail the structure of the domestic cannabis market, patient access, licensing procedures, licensed business’ obligations, and criminal penalties. The country considers hemp products for human consumption – all parts of the plant other than hemp seeds – to be a drug. This means that if a consumer wants CBD oil they must obtain a prescription, see a certified doctor, and/or obtain an import license – the same requirements for obtaining THC products.
Australia’s cannabis market includes the entire supply chain – from cultivation to distribution – though pharmacies replace the role of dispensaries. Patients are not required to obtain a permit to consume medical cannabis, only a doctor’s prescription. The law broadly defines the types of medical conditions that qualify for medical cannabis usage, though patients must have exhausted other medications prior to requesting access to cannabis.
An important caveat in Australia’s system is the states’ secondary role in cannabis licensing and regulation. Although licensing does take place at the Federal level, many states have adopted additional licensing schemes of their own. Furthermore, states differ in many important ways when it comes to which patients qualify for cannabis, how cannabis products are classified, and how licensed businesses in the state end up operating. As such, the rules and regulations concerning cannabis differ meaningfully depending on the state in question.
In addition to the government, two other bodies are directly involved in cannabis oversight: the Therapeutic Goods Administration (TGA) and the Federal Office of Drug Control (ODC). The former is akin to the Food and Drug Administration in the United States, and the latter is the body largely responsible for implementing and overseeing cannabis regulations, licensing, permitting, etc.
Finally, while exports of cannabis are not currently allowed, both Parliament and the Office of Drug Control have been transparent about eventually allowing exports in the “second stage” of its cannabis scheme. The ultimate decision to move forward or not with exports will be made after the government has determined that the domestic supply of cannabis is adequate to satisfy domestic demand.
Regulations in Australia are strict – hemp seed oil products must contain less than 0.0075% CBD content and The Single Convention and Australian law are agnostic on the 'acceptable' levels of THC in cannabis extracts; today, all extracts of cannabis are drugs, regardless of specific cannabinoid levels.
However, Australian health agencies are currently reviewing low-dose CBD products to consider removing them from the prescription medicines category and allowing for regulated over-the-counter access. Following the Australian Senate's recommendation that the "Therapeutic Goods Administration, as a matter of priority, conduct broad public consultation on the future scheduling of cannabidiol and other non-psychoactive cannabinoids", the Department of Health has proposed a new framework for CBD, which is open for public comment. The proposal will be discussed at the Joint Advisory Committee on Medicines and Chemicals Scheduling meeting in June 2020, and an interim decision is expected by September.
As written, the proposal would permit pharmacists to sell CBD products to adults age 18+ after counseling them on safe use and any potential drug interactions, with the aim of providing appropriate health professional advice prior to use by the public. The full framework proposal, seen here, also places restrictions on dosage and cannabinoid content.
Though these discussions look promising, until CBD is considered separately from cannabis, Australia's market will remain limited to medical patients.
In April 2017, the country became one of the last in the world, and certainly the last of those currently operating in the cannabis production industry, to legalize hemp at all in food. While regulations seem slow, they are not representative of popular attitudes or perceptions.
According to a nationally representative survey by Australian Institute of Health and Welfare in 2016, cultural acceptance of cannabis is relatively high in Australia compared to other countries in the region, with nearly 35% of the country reporting cannabis use at some point in their lifetime. Unfortunately, the statistics do not specify the difference between 'cannabis' and 'CBD' products, which are regulated and defined by the government in the same way, but there is at least a smaller anti-cannabis stigma working against the CBD industry in Australia, than there exists in other APAC countries, like Japan.
Cannabis use by Australians over the age of 50 has increased dramatically in the past two decades: in 2001 only 3.8% of 50+ reported recent use, while 9.1% said the same in 2016. This is a significant change for the CBD industry as well, as consumers of CBD, especially for medical purposes, almost always trend towards retirement age.
Hemp Foods Australia – a large purveyor of hemp-base foods and creams in Australia – merged with Elixinol in 2018. Before the Australian regulations on cannabis were fully laid out, many international companies invested in Australian partners in hopes that it would give them a leg up when the market opened. Now that the CBD market appears to be closed for the foreseeable future, Elixinol and other large American and Canadian companies are selling their Australian subsidiaries in the wake of a disappointing winter. In February 2020, the company announced its sale of Hemp Foods Australia to Chinese company Shanghai Shunho New Materials.
The Australian company Botanix Pharmaceuticals manufactures synthetic cannabidiols in a lab and manufactures products that treat skin conditions with the anti-inflammatory properties of cannabidiol. Their 'product pipeline' currently lists five products in development for treating skin conditions: acne, rosacea, staph, and plaque psoriasis. The company has a proprietary delivery system called "PermetrexTM" which allows the skin to more readily absorb the active ingredients in their topicals.
MGC Pharma was founded by players in Israel's medical cannabis industry and has locations across Europe. They maintain pharmaceutical and financial headquarters in Australia and work with important advocacy groups like the Medical Cannabis Council, Epilepsy Action Australia, and wholesaler and distributor HL Pharmaceuticals. In early 2020, the company made a deal with Health House International, a wholesaler distributor, to sell in to their pharmacies across the country, and Cannvalate, which agreed too supply MGC products to patients prescribed within their clinic network. The company has so far brought to market a CBD-only product, and product of 1:1 ratio THC to CBD, both in oral oil format.
Medlab is a medical research and development facility in New South Wales that is working on several cannabinoid-based medicines that are available via prescription in Australia. They also sell a CBD only product, NanoCBD, in the US, but because of regulations it is not yet available in Australia.
If/when CBD is rescheduled it will likely be available to all consumers 18+, which will make it more attractive to producers and likely bring in additional outside investment
Cannabis use is more accepted in Australia than other countries
Australia's regulations are unnecessarily and somewhat arbitrarily harsh – they do yet not differentiate between the psychoactive component THC and the non-psychoactive CBD.
This will greatly hinder the country's suppliers from competing in international CBD markets, as the American hemp industry has taken off in the past twelve months. These American hemp growers will have a generous leg up on farmers in other countries like Australia, whose governments are unduly hindering growth in the industry. Many farmers in the United States will also not be required to grow under Good Manufacturing Processes requirements, as all Australian cultivators are, and while it is yet to be seen if this will result in better products from Australian manufacturers, it will certainly be another obstacle standing in the way of rapid production.
Because CBD products are treated in the same way cannabis products are treated – as a medical drug – consumers in Australia must first obtain a prescription and then fill it at one of the nation's pharmacies. Though legislation is likely to become more favorable toward CBD and allow for over-the-counter sales, changes are not expected until 2021.
There is recent news of a potential change in policy coming from Australia, indicating regulations around CBD products may be relaxed. The country's health agencies are considering defining and codifying the difference between THC and CBD products, and CBD products may be listed in the near future as simply over-the-counter drugs.
This would represent a small change for the regulators, and would likely ease the load they have been forced to take on since the beginning of the medical cannabis program
This would also represent huge potential for both consumers, who would no longer require a doctor's prescription to access CBD, and for producers, who would be able to market directly to consumers, as opposed to advertising only to medical professionals.