It was a big week for medical cannabis in Australia last week, with Queensland’s Labor government announcing that it will allow licensed cannabis growers in the state to sell cannabis seeds to other growers and manufacturers.
Minister for Agriculture and Fisheries Bill Byrne made the announcement on Friday afternoon, after changes were made to the state’s drug laws earlier in the week.
Australia’s move to legalize and regulate medical cannabis last year took many by surprise, and many local officials are still playing catch-up. But in Queensland, the state government has been championing the economic benefits of a robust cannabis industry. Allowing the sale of seeds is aimed at giving growers access to the nascent market allowing licensed growers a chance to fully realise the economic value of their cultivation rights.
“This creates new opportunities for Queenslanders,” said Byrne, the agriculture minister, adding that the policy should benefit industry players big and small.
“The changes will be mutually beneficial for licensed industrial cannabis growers and those Queensland businesses interested in being part of the emerging medicinal cannabis industry in Australia,” he added.
Queensland Minister for Health Cameron Dick has also taken a leading role, negotiating a $6 million investment in medical cannabis research with GW Pharmaceuticals. And the state was the first to create and release medical guidance documents for doctors seeking to prescribe medical cannabis.
Queensland’s example suggests there’s a path that can both ensure access for patients and reap economic benefits.
The scheme currently permits the prescription of a limited range of pharmaceutical products only for certain conditions, such as drug-resistant epilepsy in children, multiple sclerosis, chemotherapy-induced nausea, and symptom control in palliative care. The guidance is based on scientific reviews, and keeps the medical profession up to date with the latest clinical trials.
Queensland is also pushing for the rest of Australia to get on board. In February, Health Minister Dick called on the federal government to add medical cannabis to the Pharmaceutical Benefits Scheme (PBS)—meaning a federal government subsidy for medical cannabis. Such a move would make cannabis substantially more affordable for patients in need.
Although the federal government rejected the proposal, officials have taken other steps toward reform. Federal importation rules have been relaxed, and the market is responding with relentless optimism. Cannabis stocks in the Australian market have gone up by a staggering 130% this year on average, according to Bloomberg. By comparison, the S&P/ASX 200, an Australian Securities Exchange index, has gained less than 1%.
Huge gains were made by cannabis growers such as AusCann (ASX:AC8), which was granted the first commercial licence to cultivate medical cannabis in Australia. And even peripheral businesses—from shovels and picks to hydroponics—are getting in on the boom. One such manufactuer, The Hydroponics Co., will go public on the ASX in April under the cheeky ticker symbol THC. The $8 million initial public offering is reportedly three times oversubscribed.
The booming cannabis industry is creating new economic incentives—and pressures—for state governments in Australia. Queensland’s example suggests there’s a path that can both ensure access for patients and reap economic benefits for the region. However, it also makes clear that local officials need to coordinate with the federal government to prevent a patchwork of regulations from hamstringing the young industry.