Legalization of Cannabis in Australia – A Disruptive Force

Cannabis can cause a significant disruption in the alcohol, pharmaceutical and beverages industries.

Legalisation of cannabis could disrupt everything

Legalization of cannabis will have a widespread effect on several industries

There is a growing interest amongst investors in the cannabis market, stemming from the change of mindset apparent in the public in regards to cannabis legalisation. This revolutionary change has the potential to create a massive market for the product, generating revenue which is unparalleled by any other industry and even dwarfing giants like Amazon. Legalisation of cannabis has the potential to add billions in revenue and to lend a helping hand to the Australian GDP – meaning that once legalised, the drug is here to stay. The market for cannabis could disrupt everything from carbonated drinks, beverages, beer, tourism and beauty, and particularly types of medication and treatment options.


What’s the Australian Cannabis Market Worth?
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Here are a few industries that could have cannabis as the next big thing.

1.    Tourism

Cannabis tourism opens an array of opportunities for businesses to fulfill the requirements of growing customer demand. Music concerts, film festivals, rock concerts, comedy shows, and outdoor adventures can become a part of cannabis tourism. According to a report by Colorado’s Department of Revenue, cannabis tourism has seen growth of 51% since 2014. The legalisation of marijuana is likely to cause a commotion in the tourism sector, with a large potential for revenue generation.

2.    Beauty

Considering the exponential demand for green beauty products in the last decade, cannabis is the rising star of the beauty and self-care industry. While products from the plant are widely used in creams, lubes and lip balms, 2018 saw its entry into cosmetic lines as well. With the legalization of cannabis, the properties of marijuana can be further explored and utilised. For example, cannabis possesses excellent anti-inflammatory and analgesic properties, as well as being a rich source of Vitamin A, D, E and omega fatty acid. By using CBD, brands are trying hard to bring a higher level of hydration to their products. Only time will tell how the beauty industry might benefit from the legalisation of cannabis in Australia.

3.    Retail

The upcoming legalisation of marijuana is creating a unique demand in the retail space. People are interested in leasing 1400-1500 square feet of space at a prime location or suburban mall. In the very first year, more than 100 shops are expected to open their doors to sell cannabis products. It will also indirectly bring a radical change in the real estate industry due to an increased number of companies looking for retail spaces to sell their marijuana products.

4.    Pharmaceutical

Due to the legalisation of cannabis, the pharmaceutical industry is threatened because of the potential marijuana has to jeopardise their business. Areas where cannabis outclasses traditional medicines, include providing treatment for chronic pain, chemotherapy-induced vomiting, epilepsy, sleep disorders, and many other conditions. According to research if cannabis is prescribed in small amounts, the pharmaceutical sector is likely to witness a loss of more than $4 billion. For the pharmaceutical industry, legalisation of cannabis is the next big thing, but it’s not good news for them.


What does the future hold for cannabis in Australia?

The legalisation of cannabis is turning out to be a lucrative direction for Australia. The Green’s plan is likely to collect $3.6 billion by the end of 2019. The Green’s plan not only decriminalises cannabis but makes it legal for adult use. The economy will earn an extra $2 billion after the revolutionary change.

Interestingly, according to a report by Australian Institute of Health and Welfare, 35% percent Australians have already used cannabis in some form or the other, and this is likely to spur the demand for marijuana in the coming years. With legalisation comes both practical and financial benefits to the country, and future generations will benefit from access to the benefits of cannabis.


Proportion of Australians Who Have Used Cannabis by Age 17
Source: Australian Institute of Health and Welfare (AIHW)


Why is cannabis a disruptive force?

According to CEO of Canopy Growth, cannabis legalisation will cause an approximate disruption of more than $500 billion. Cannabis can cause a significant disruption in the alcohol, pharmaceutical and beverages industries. The market potential of the sector is enormous, and one industry which is likely to be impacted is the alcohol sector – a trillion dollar industry. Another market likely to witness a downfall with the surge of cannabis is the wellness market – selling naturally made products providing numerous health benefits. Furthermore, as cannabis is going mainstream, it is slowly creeping into everything from beauty products to banking, and from tourism to real estate. And, with reports suggesting that the legal cannabis industry is likely to reach $20 billion by 2025, the sky is the limit for the marijuana industry.


Market Cap of Companies Developing Medical Cannabis in Australia
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Only time will tell how investors and companies grab the opportunity when it is provided by the government of Australia.