By 2024, Oceania’s recreational cannabis market alone could be worth just south of US$1 billion.
The market prediction is hypothetical, because out of the region’s 31 countries and territories only two have legalized recreational weed, but that doesn’t mean the global cannabis industry should ignore the area, according to a recent report by Prohibition Partners.
At least 11 countries in Oceania have legalized medical weed, including Australia in 2016, and New Zealand in 2018, which combined make up 71 per cent of the region’s population. Now all that needs to happen is for one of those countries to legalize recreational weed and the rest of the region will follow, predicts the report.
And with New Zealanders voting on a cannabis referendum in the country’s upcoming September election, a legal adult-use market could be coming to Oceania this year.
Out of the region’s 42.3 million people, an estimated 3.8 million already use weed, the report reads. By 2024, that could mean Oceania’s medical cannabis market could be worth US$600 million and its recreational market worth US$950 million. Those markets would serve around 252,000 medical patients and 541,000 recreational users, Prohibition Partners predicts.
To support that demand, Oceania would need to be able to produce 135,000 kilograms of dried flower.
The region’s most progressive weed legislation is found in two U.S. territories. Northern Mariana Islands legalized its recreational market in 2018, and Guam followed suit in 2019.
Australian and New Zealand’s governments have both signalled they’re interesting in learning more about medical weed, with Oz committing US$2 million to see how weed can be used to alleviate cancer symptoms. It’s also working to build a domestic cultivation advantage and has, as of Jan. 1, granted 92 cultivation licences.
Cannatrek, Ltd., a partner of embattled Canadian producer CannTrust Holdings, Inc. (TSX: TRST), invested US$19.8 million in the state of Australia to expand its production abilities, and in Queensland Asterion Cannabis invested US$6.6 million to build what it called the world’s largest greenhouse, capable of producing 500,000 kilograms of cannabis per year. The Australian government also fast tracked a cannabis farm in South East Queensland, with an undisclosed address, that is reported to be able to generate US$242 million worth of cannabis, according to the Prohibition Partners report. Around 90 per cent of the secret farm’s products are produced for exports, the report added.
In the coming years the report said Australia will consolidate its licences, bringing research, cultivation and manufacturing under the same umbrella. But it will be the companies already operating under the three licences with farm-to-pharma services that will have a competitive advantage, it added.
Legalization will also help reduce the disproportionate amount of harm Indigenous peoples and people of colour suffer under cannabis prohibition, despite surveys in New Zealand reporting that everyone, despite their ethnicity or socioeconomic status, uses around the same amount of weed, the report said.
Top image: French Polynésia Mooréa Island by Daniel Julie via Wikimedia Commons