Why cannabis could be a growth opportunity
Cannabis is the world’s most common illicit drug, and there has been a push to legalise its medical and recreational use.
- Currently, only Canada, Uruguay and 15 states (plus Washington DC) in the US have legalised recreational cannabis use.
- The global legal cannabis market is projected to be worth US$73.6 billion by 2027.
- On the 17 October 2020, 53% of New Zealand voters said no to legalising recreational use of cannabis.
Compiled by Amity Delaney
Cannabis is the most commonly used illicit drug worldwide. Used for medicinal purposes in more than 40 countries, there is a growing movement for recreational cannabis use to be legalised. It is predicted that the global legal cannabis market would be worth US$73.6 billion by 2027.
Currently, only Canada, Uruguay and 15 states (plus Washington DC) in the United States have legalised recreational cannabis use. Closer to home, it is legal to possess up to 50g of cannabis in the Australian Capital Territory. A referendum held with the 2020 New Zealand general election voted no to legalising recreational use of the drug.
How do people use cannabis?
Cannabis can be smoked, eaten or vaporised and comes in different forms, including:
The dried leaves and flowers (buds) of a cannabis plant that are smoked in a joint (“choof”) or a bong (“punch a cone”). This is the most common form of cannabis used.
The dried plant resin, usually mixed with tobacco and smoked, or added to baked goods, such as biscuits and brownies.
A liquid that is used sparingly due to its high potency and added to the tip of a joint or cigarette and smoked.
Extracts, such as dabs, wax or shatter, typically using butane hash oil as a solvent and often vaporised in small quantities due to their high THC content.
Possession of cannabis
A majority (73.9%) of Australians polled in the 2016 National Drug Strategy Household Survey do not support cannabis possession as a crime.
Asked how cannabis possession should be dealt with by the legal system, 46.6% of respondents said they would prefer either “a caution, warning or no action”, while 27% said users should be referred “to treatment or an education program” instead of more punitive measures.
Just 4.5% of those surveyed thought a prison sentence was an appropriate response to someone found in possession of cannabis.
Which countries have legalised recreational cannabis?
Canada, Uruguay, and some US states have already legalised recreational use of cannabis. Those states are Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington, plus the District of Columbia. Four more states voted on 3 November 2020 to legalise recreational cannabis use: Arizona, Montana, New Jersey and South Dakota.
However, legalising recreational cannabis remains a contentious issue. Cannabis is a drug, after all, and its effect on the brain – especially developing brains – is a big concern.
Observational studies suggest cannabis use by adolescents can lead to depression and anxiety, as well as an increased risk of schizophrenia or long-term cognitive impairment. But researchers don’t yet agree if there is a direct link, or if teenage cannabis use correlates with other risk factors.
In a 2019 advisory, the US Surgeon General stated that “until and unless more is known about the long-term impact, the safest choice for pregnant women and adolescents is not to use marijuana.”
Why do people use medicinal cannabis?
There is debate about whether cannabis should be used for medicinal purposes. Consumption of medicinal cannabis is currently legal in more than 40 countries and 36 states in the United States.
The least controversial form of medicinal cannabis is CBD (cannabidiol), the extract from the hemp plant, which has little or no intoxicating properties. Patients who use CBD have reported a range of benefits, including relieving insomnia, anxiety and pain, and treating conditions such as epilepsy.
The most common uses of medicinal cannabis are to relieve symptoms of chronic pain and nausea associated with chemotherapy treatments for cancer. It has been reported to ease the pain associated with multiple sclerosis and nerve pain. Cannabis is used as a muscle relaxant for the tremors of Parkinson’s disease and to help war veterans suffering from PTSD.
In Australia and New Zealand, there is an increasing number of businesses supplying medicinal cannabis products. One new player is Cannatrek, which released its prescription medicinal cannabis oil and flower products in Australia this year. Thanks to the fully regulated medicinal cannabis industry in Australia, customers can take their prescription to a pharmacy and leave with their purchase right away.
How far away are Australia and New Zealand from legalising recreational cannabis?
New Zealand put the issue of legalising recreational cannabis to a national referendum, the first country ever to do so, on 17 October 2020. On polling day, 53% of New Zealand voters said no to legalising its recreational use, although special votes later narrowed the margin of defeat.
In Australia, the Australian Capital Territory (ACT) is the only part of the country that has legalised recreational cannabis use and cultivation (the federal government legalised medicinal cannabis in 2016).
Under ACT law, it is legal for someone over the age of 18 to possess up to 50 grams of dried cannabis and grow two plants per person at home, a maximum of four plants per household. The rest of the nation is still a long way from legalising cannabis and the federal government could overturn the ACT’s law through legislation.
- The global legal cannabis market is projected to be worth US$73.6 billion by 2027
- The global medicinal cannabis retail market is estimated to reach US$62.6 billion by 2024
- Germany is the largest single market for medicinal cannabis in the world
- Cannabis is the most commonly used recreational drug in Australia
- The average age of a cannabis user in Australia is 35
- 41% of Australians support legalisation of cannabis for personal use
- 85% of Australia’s cannabis is consumed by people who use the drug daily
- Motor vehicle crashes are the leading cause of cannabis-related deaths in Australia
- NZ$10 million is spent by New Zealand each year imprisoning people whose most serious charge is to do with cannabis
- New Zealand police arrest more people for cannabis-related offences, per head of population, than any other country in the world
Sources: “Legal marijuana market size worth $73.6 billion by 2027”, Grand View Research, Feb 2020; “Alcohol, tobacco & other drugs in Australia”, Australian Institute of Health and Welfare, Nov 2020; “Australian daily users consume up to 85pct of the country's cannabis, study says”, 7news.com.au, 16 Jan 2020;
“Australian study finds vehicle crashes are a common factor in cannabis deaths”, smh.com.au, 30 Apr 2020; NZ Drug Foundation; norml.org.nz
Rua Bioscience rides cannabis wave to success
CFO Hamish White CA has helped guide NZ’s Rua Bioscience from crowdfunding to IPO to grow its medical cannabis horizon.Read more