Experts speaking at a major cannabis conference say, ‘As exporters of medical cannabis products and drugs, there are big opportunities for Australian pot stocks, but global competition will be tough’, in Sydney this week.
COO Gary Allen, New Frontier Data COO said, Australia is composed to become a first mover as an export market for the region, if it can get its market activated with good regulations, taxes. The total legal and illegal Australian cannabis market, as estimated by new frontier, is worth between $4.6 billion and $6.3 billion.
With the highest number living in Victoria, it reckons there are about 2 million current users. Companies are setting up operations to supply both local and international demand like Cann Group (ASX: CAN) which is building a large new facility near Melbourne airport and THC Global (ASX: THC).
But as demand grows in countries that have legalized or are considering legalizing medical cannabis, Australian regulations are slow to change most believe the main opportunity is offshore. A big possible market for Australian cannabis is Germany. Laws started to be implemented in early 2017 and a conservative minimum estimate puts the number of users there at 20,000 compared to since the law was changed in early 2016, the 1440 people approved to use medical cannabis in Australia.
To grow cannabis in Germany Mr. Pascual says an upcoming tender will only offer 13 contracts of 200kg apiece, meaning the country will still need imports to cover demand. currently the leading global exporter, Canada, is which Australia will face strong export competition from. Also, in the process of establishing a medical cannabis market from low-cost upstarts like Thailand.
New Frontier says Papua New Guinea is ideally placed to grow cheap cannabis as well, Lesotho is rapidly setting itself up as a low- cost producer which is said to be there thanks to its climate and a pool of young workers.
What their competitive edge is as more countries decide they like the taste of marijuana, but producers here will have to work out, Australia has the advantage of being an early mover as per the reports.
Chief Elaine Darby who is Departing from AusCann (ASX:AC8) as she alters AusCann from grower to drug maker, is picking registered drugs as a focus. She also said that ‘it also gives you access to markets that would otherwise be unavailable and not only does that surpass unregistered pharmaceuticals.
She cited places where registered cannabis-based drugs can enter via the pharmaceutical route Asian and the US markets where marijuana is illegal. Expensive countries like Australia up against cheap Latin American, African and other countries, Ms. Darby thinks raw materials will become an internationally traded commodity. Medlab Clinical (ASX: MDC), Zelda Pharmaceutical (ASX: ZLD) and Botanix (ASX: BOT) are few other companies going to registered drug rout.
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.
As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.