Australia might have become an even more desirable destination with the impending legalization of cannabis. Anticipation of the change in law has opened doors for various Australian companies to get ahead of the competition, in the race to become the leading supplier of top grade medical cannabis. All of a sudden the potential market for cannabis has exploded, and potential investors are scrambling to buy shares in cannabis companies – pushing several companies and the sector as a whole to a new high. Forecasts estimate that Australian cannabis products will earn a whopping $1 billion by 2020.
Why does Australia want to become the world’s leading exporter?
With the recent legalization of cannabis, the budding industry in Australia is set for a significant windfall after approval to begin exporting products. The primary aim is to assist the developing domestic market to grow. Its final recognition from the Australian government is being received favourably because it will give an opportunity for farmers to produce cannabis for the entire world. Being able to export the product will helps the farmers increase their production and profits, and support the domestic market. However, the farmers will have to first provide cannabis for domestic use before increasing their operations in order to export the product to different countries.
Here are a few potential reasons why Australia is planning to become the largest exporter of legalized cannabis.
1. Increasing domestic supply:
By developing the cannabis market, the government is favoring the local producers who now will have to expand their operations. The expansion will mean an increase in production, and increased production will fulfill the shortfall in the domestic market. While the local patient base is small, exports will exponentially enhance the production and use of this drug. Also, profitable operations will empower the domestic market to develop quality products which will help Australia leave its footprint in the global arena.
2. Increase in taxes and investments:
The Australian government is keen to increase the inflow of investment, and legalized cannabis will help with the structure of a healthy economy. It will increase the revenue created by international taxes and investments, which will contribute to the GDP of the country. Furthermore, the implications of legalisation on the economy are deemed positive because of the rapid growth of the sector. The global market is likely to hit $55 billion by 2025, and Australia naturally wants to enjoy a maximum share in it. Given the vast amount of agriculture land available and stringent standards for exports, the cannabis industry could become Australia’s modern gold rush. Fuelled by growing acceptance and the increasing emergence of research into the benefits of cannabis to manage life-threatening diseases such as cancer and AIDS, the Australia is set to supply the global market by providing high-quality cannabis to the world.
The Australian market outlook
Cannabis has become a hot topic in the Australian market and is appearing with increasing frequency in the media. With more and more countries favoring legalisation for medicinal purposes, public sentiments are in favor of the revolutionary step that looks certain to be taken by the government. Australians have a more progressive stance on cannabis reform than any other country. According to research by NDSH, close to 84% of Australians support the legalisation of cannabis for medicinal purposes, with support in every state.
According to another report, around a third of Australians are likely to try cannabis at some point in their life. Millennials and Generation Z are likely to support the use of the drugs whereas Baby Boomers are more likely to revolt against the medicinal use of the drug.
Surprisingly, the shares of companies involved in the production and export of cannabis have grown by more than 130 percent in Sydney since 2017, which is almost six times higher than their competitors in U.K, Canada and the U.S.
Can Australia become the export leader?
There are however some caveats to this legalisation. The government is bound to impose stringent rules and regulations for export, which might adversely affect the distribution and use – given that there is a thin line of difference between the medical and recreational use of the drug. Also, to stay on par with the United Nations guidelines, the country is likely to take a tough road. Keeping track of whether the drug is supplied first to the domestic market and then to the international market could become a headache for the current Australian government.
There is no denying the fact that legalisation in Australia is a revolutionary move, not just for cannabis culture, but also for the people and economy of the country. The legalisation of cannabis is likely to become a game changer for many Australians who will benefit from high-quality marijuana products. With a vast export market waiting, it’s foreseeable that legalisation will have a positive impact on the entire country in the coming years.