MOCA views the potential market in two segments, the Australian market and the international opportunity. These two markets are quite distinct from each other and are handled in our marketing and development strategy accordingly.
The Australian Market Environment
The Victorian law reform report estimates that 750,000 Australians use cannabis every week, and that 35% of Australians over the age of 14 have used it within their life time. It is difficult to accurately estimate the total user base of medicinal cannabis within this estimate, but the Medicinal Cannabis Users Association of Australia (MCUA), an online advocacy and educational group, recently claimed that their membership was increasing by 150 people a week. SourceIncreasing discussion of the therapeutic properties of medicinal cannabis has created a surge of interest in Australia for its use as an alternative to conventional treatments for a range of health conditions. On top of this, recent surveys have shown that cannabis use by Australians over 50 has increased dramatically, even exceeding the use of cannabis by young Australians, and this could be due to the fact that older people tend to suffer more from conditions such as cancer and chronic pain.
More and more Australians are now seeking both knowledge and access to medicinal cannabis, driven by ineffectiveness of or adverse effects from conventional treatments, financial difficulties relating to existing pharmaceutical treatments and diminished quality of life for patients.
The table below summarises the conditions which cannabis medication (THC and CBD) are known to be able to treat. This list is neither exhaustive nor definitive. It is here only to provide a snapshot of the current state of cannabis research.
While the anticipated market size for medicinal cannabis Australia is presently estimated at 8000 kg per year, MOCA is keenly focused on the great potential based on international trends.
How the Australian Market has responded to Medical Cannabis
Shares of companies involved in the cultivation, production and research of medicinal marijuana have on average soared more than 130 percent in Sydney this year (2017). That’s six times higher than their peers in the U.S. and Canada. The surge was sparked by Australia easing restrictions on imports of cannabis to treat illnesses from epilepsy to cancer. Source
Initial demand for medicinal marijuana in Australia could top AUD$100 million a year, a University of Sydney report estimated. If cannabis-derived pharmaceuticals become more mainstream within the decade, demand could grow to AUD$300 million, the report’s author Michael Katz said.
Australia’s nascent cannabis sector is a sliver compared to the U.S., where more than half of states have legalized medical uses of the plant. Source
Forbes Magazine writes that a new report from New Frontier Data projects that by 2020 the legal cannabis market will create more than a quarter of a million jobs. This is more than the expected jobs from manufacturing, utilities or even government jobs, according to the Bureau of Labor Statistics.
In America, the legal cannabis market was worth an estimated $7.2 billion in 2016 and is projected to grow at a compound annual rate of 17%. Medical marijuana sales are projected to grow from $4.7 billion in 2016 to $13.3 billion in 2020. Adult recreational sales are estimated to jump from $2.6 billion in 2016 to $11.2 billion by 2020. Source
The International Context and Market
With the change in legislation, Australia (2016) is set to join the marijuana revolution which is taking place all over the world and which includes; Argentina (2017, Austria (2008), Canada (2001), Chile (2005), Columbia (2016), Croatia (2015), Czech Republic (2013), Finland (2008), Germany(2016), Israel, Italy (2013), Jamaica (2015), Macedonia (2016), Netherlands (2000), Portugal (2001), Romania (2013), Spain, United States and Uruguay (2013).
As a first mover nation, Canada has been the greatest beneficiary of this revolution. Some of the country's licensed marijuana producers can export medical marijuana (flower or oil) to licensed companies in countries like Australia, Chile, Cayman Islands, and Germany.
The 2016 World Drug Report reported that about 182.5 million people, or about 3.8% of the world’s population, used cannabis regularly with 22.2 million of those being Americans.
As medical and recreational use is legalized in the United State, this number will grow.
In fact, in the US alone, medical marijuana alone is expected to be a $40 billion industry by 2025, and $100 billion by 2050 if all 50 states legalize. And this doesn't count the growing number of states with legal recreational use.
The chart below shows an estimation of cannabis sales through 2020 according to ArcView Market Research:
SourceCanadian legalisation of recreational Cannabis
Canadian Prime Minister Justin Trudeau has taken concrete steps to fulfilling his campaign pledge to legalize marijuana in the country. The government filed an Act to Amend the Controlled Drugs and Substances Act with the legislation officially introduced at a press conference that was streamed live.
The goal is to implement legislation by July 2018. Deloitte estimates the market has a base retail value between $4.9 billion and $8.7 billion, which would rival the size of the Canadian spirits market, which is $5 billion. Vivien Azer of Cowen & Co. said in a recent report, “When you consider ancillaries such as growers, testing labs, security, etc., the economic impact could range from $12.7 to $22.6 billion. Of note, these numbers do not include the impact of tourism, business taxes, licensing fees and paraphernalia sales, which could drive the economic impact higher.”
In order to meet the low end of the estimates for the adult-use market, Canada would have to produce over 600,000 kg of cannabis a year. This is a significant increase over current levels and has sparked a rush to build new grow facilities. Source
With headlines such as the FORBES Magazine publication of MAY 8, 2017 claiming;
“Daily Dose of Cannabis May Protect and Heal the Brain from Effects of Aging”
One can easily see the enormous potential contained within medical cannabis.
The Forbes magazine article goes on to say:
Researchers at the University of Bonn and Hebrew University have discovered that low, regular doses of tetrahydrocannabinol (THC), one of the main active ingredients or cannabinoids found in marijuana, may help to keep our brains from 'slowing down' as we get older.
Current Australian conditions within the international marijuana market represent a significant opportunity and MOCA is one company that is focused on capitalizing on the global opportunity.