The Status of Cannabis in Australia
Cannabis is legal for medicinal purposes in Australia, but only under specific conditions. The decriminalisation of marijuana for medical purposes became effective under the Therapeutic Goods Administration in 2016, and recreational consumption of cannabis is still a criminal act in most parts of Australia. However, in territories such as the Australian Capital Territory (ACT) and the Northern Territory, the possession and personal use of marijuana has been decriminalised.
Latest News in Finance on Cannabis
Cannabis is legal for recreational purposes in a number of countries including Uruguay, Canada and parts of the United States of America. The market for legal cannabis has been on a steady path of growth since then. In a study carried out by Grand View Research, the market for legal marijuana is expected to reach $146.6 billion by the end of 2025, growing at a compound rate of 34.6 %.
As one of the highest consumers of marijuana worldwide, Australia has a lot of market potential. A study conducted by New Frontier Data showed that if cannabis were legalised for recreational use, the Australian market would be worth an estimated USD$5 billion per annum.
Investigative strategist Mark Bernberg suggests that Australia is losing billions of dollars in tax revenue by keeping cannabis illegal. Reporting to nine.com.au, Bernberg states “It’s a product, very much like alcohol and gambling, that’s recession proof because it’s a product for recreational consumption by adults.” In addition to this, Bernberg remarks that the legalisation of cannabis for recreational use will cost the Australian government far less than their current expenditure on its war on drugs.
Aside from saving the government billions in expenditure, legalisation is set to create more jobs. Bernberg gave some insight into the potential economic effects of legalisation, “It’s not just people working in cultivation and bud tenders – people that work in dispensaries – who benefit from legal weed. A cannabis company is like any other business. There would be management positions, cultivators, biochemists, research teams, accounting teams and legal teams.”
In the stock market, the situation seems dire as many cannabis shareholders have been underperforming in 2019. This can be attributed to the lack of progress in generating revenue experienced by many cannabis companies. AusCann Group Holdings Limited (ASX: AC8) witnessed a 44% decrease since the beginning of the year. Creso Pharma (ASX:CPH) has also witnessed a crash in share price by 35%. THC Global Group Limited and Cann Group Limited have witnessed a rise in share price to date by 15% and 2.5% respectively. MMJ Group has experienced a trading flat in the year to date. In reports released last month, it was revealed that the company had recorded a half year revenue of $152,000 and a loss of $13.3 million.
Latest News in Cannabis Politics
Cannabis legalisation has swept the globe. It is no surprise that many politicians and political parties are beginning to shed their conservative views and embrace the idea of cannabis in society.
Within months of their election in New South Wales (NSW), the Green Party is set to announce a plan which will make cannabis available to adults for use within the region. As reported in an exclusive on news.com.au, “the Greens are set to announce a plan to legalise, regulate and licence cannabis for recreational use in NSW – which will allow you own up to six plants and the ability to light up anywhere it’s legal to smoke tobacco.”
According to Greens MP (Member of Parliament) and spokesman for Justice and Policing, David Shoebridge, “It makes no sense to treat the consumption of cannabis as a crime,”
“We are wasting millions each year and missing out on licencing revenues that the state desperately needs. It’s time we stopped taking such a backward approach to a drug that over one third of Australians have used.”
The full legalisation of cannabis is at the forefront of the Green party’s political agenda for 2019. As reported to SmartCompany, Greens Party leader Richard Di Natale outlined the party’s stance on cannabis in Australia.
“We want to see the abolition of criminal penalties for the personal consumption of marijuana and indeed other drugs. We think that we shouldn’t be targeting people who use these substances,” said Di Natale.
Labor backbencher Michael Petterson had proposed a bill to legalise marijuana in the ACT in 2018. This bill was met with overwhelming support by the Labor party and the Green Party. Despite receiving overwhelming support on the bill, the move to implement the legislation may experience delays due to the changes in parliamentary procedures.
According to Chief Minister Andrew Barr, the legislation may be delayed up until mid 2019. As reported to the Canberra Times, “The new standing orders of the Assembly require all amendments to go through a scrutiny process, so if there’s any contention around a piece of legislation in the Assembly it will take three sitting periods effectively for it to be resolved. So we intend to have a measured and detailed debate both on the principle of the legislation and any subsequent amendments,”
What Can We Learn?
Cannabis legalisation has taken the globe by storm. The topic of legalisation and the benefits it could bring to Australian citizens and the economy are constantly in conversation, from households to parliament. In contrast to former years, there is now extensive support for legalisation. A survey conducted by the Australian National University showed that 43% of Australians fully supported legalisation, while only 32% supported the government’s current stance on cannabis use. This is a record growth from statistics from 2013 where 44% of the populace maintained the government’s stance on marijuana laws.
Common sense is beginning to triumph from the bad press cannabis originally received, and the laws are slowly changing to match public perception. In Australia, the move to legalisation may be slow, but it does appear to be on the horizon.