• AIHW’s National Drug Strategy Household Survey 2022-2023 shows 700,000 Australians, or 3% of the population, sourced cannabis for medical purposes in 2022-23
• Data shows a significant shift away from the black-market and towards legal medicinal cannabis sources. Only 1 in 50 Australians sourced cannabis for medicinal purposes through legal channels in 2019. In 2022-23, this had jumped to ~22%, a 10-fold increase
  

• Australian industry strategy of matching and beating the black market on pricing and quality will continue to draw patients away from black market channels
• Shows there still remains a significant potential patient base for LGP to service

To access the full report, click on the following link:https://www.aihw.gov.au/reports/medicines/medical-marijuana-cannabis#Prescribed-medical-cannabis

• On 1 April 2024, cannabis was removed from German Narcotics List, with limited home-cultivation and personal use possession allowed and not-for-profit ‘cannabis clubs’ permitted from 1 July
• Germany is now the largest federally legal cannabis market globally

• This is probably the biggest cannabis industry development since legalisation in Canada in 2018, and could catalyse a trend across Europe
• Significantly improves medicinal cannabis access pathways in Germany, from importation through to prescription, clinic appointments and direct-to-patient delivery
• Expected to significantly increase medicinal cannabis sales across the territory

• In 2023, over 3,000kg of cannabis was distributed in Poland, with the Polish Pharmaceutical Chamber estimating the number of medicinal cannabis users is expected to reach 1.3 million by 2026

• Poland represents a particularly interesting European market given the relatively high regulatory barriers to entry, large population and growth potential, which may explain the predominance of the more sophisticated North American and German cannabis participants in that market

• Since news of the bill to legalise cannabis clearing its final parliamentary hurdle in Germany on 22nd March, market sentiment has improved significantly in the United States with a number of stocks surging:
  • Canopy Growth Co. (NASDAQ: CGC) up as much as 68%
  • Aurora Cannabis (NASDAQ:ACB) up as much as 26%
  • Tilray Brands (NASDAQ:TLRY) up as much as 18%

• The movement in market sentiment in the US on the back of the news from Germany as well as the expected imminent reclassification of cannabis from a Schedule 1 drug (putting it in the same category as some of the hardest drugs) to a Schedule 3 drug is set to trickle down to Australian cannabis sentiment with all cannabis companies set to benefit
  

Canadian authorities propose garnishing CA$200m in unpaid excise duties from Canadian LPs

• Canadian tax authorities propose to garnish CA$200m in unpaid excise duties from wholesaler payments to Canadian licenced producers (LPs)
  The unpaid excise tax, which is CA$1 per gram or 10% of the product value and deducted from top-line dried cannabis sales, has grown from CA$50m in 2022 to CA$200m in 2023

LGP insights:

• The Canadian LP industry has struggled under the weight of the Federal excise with many blaming the excise for challenges in achieving profitability
• Suggests tax authorities have no intention of providing any tax relief and enforcement could result in more wide-scale financial distress with flow-on effects for Canadian sales into the Australian and European markets
• It could also affect Canadian pricing as delinquent companies are forced to include these duties in their cost base

Read the full MJBizDaily article here: https://mjbizdaily.com/canadian-cannabis-wholesalers-must-garnish-payments-over-unpaid-taxes/

Independent panel report into success of Cannabis Act 

• A recent independent panel into the Canadian Cannabis Act (2018) has found positive progress on many key objectives, including a well-established licensing framework, steady shifting of adult consumers to legal cannabis, general adherence to laws around product promotion and claims, and significant reduction in charges for cannabis possession
• Report also raised several areas of concern including trends in use by youth, growth in high potency products, public health and safety and economic opportunity challenges for First Nations communities, difficulty in displacing black market operations including due to costs of high excise duties, lack of enforcement resourcing, and limited research on medical applications

LGP insights:

• The report shows generally positive public policy outcomes coupled with some mixed results for cannabis legalisation. The Canadian (and other legalisation) experience provides extremely valuable public policy lessons for countries looking to legalise cannabis in the future, as well as flagging key areas for focus such as taxation, regulatory resourcing and enforcement, and need for ongoing medical research incentives

  Read the full report here: https://www.canada.ca/en/health-canada/services/publications/drugs-medication/legislative-review-cannabis-act-final-report-expert-panel.html

• The Japanese government has changed its stance on medicinal cannabis, with the government proposing changes by end of 2024 to legalise supply of CBD produced from cannabis plants (currently limited to ‘stalks and seeds’) and low-THC medicinal cannabis products

• Represents a significant opportunity for LGP and Australian producers given Australia’s long-held reputation for high quality agricultural products in the region