LOGIN JOIN SHARECAFE SIGN UP FOR OUR NEWSLETTER ADVERTISE
share cafe logo  
 
SHARECAFE COMMENTARY

Australia's Marijuana Goldmine
BY KATIE JOHNSON - 12/02/2018 | VIEW MORE ARTICLES BY THE DAILY RECKONING

From commercial production to prohibition, and right through to legalisation, Australia has well and truly come full circle on the issue of cannabis.

When hemp seeds were first brought to the country on board the First Fleet, the British envisioned the plant would be produced commercially in the new colony.

They had such high hopes, in fact, that in 19th-century Australia the growing of hemp was actively encouraged by the government. Cannabis consumption was widespread too — both for medicinal and recreational purposes.

It was only in the 1920s that Australia, following in the footsteps of the US, enforced sweeping prohibition. Cannabis was lumped in with drugs like heroin and cocaine, as little research had been done into the uses and potential benefits of the plant.

Then came the ‘Reefer Madness’ campaigns of the 1930s, which somewhat hilariously dubbed cannabis as ‘an evil sex drug that causes its victims to behave like raving sex maniacs.’ The fictitious claims made in this long-running scare campaign continued to influence public consensus for decades.

Looking back on our history, the federal government’s recent decision to allow the use and export of medicinal marijuana marks the beginning of a new era.

It’s a step away from the fear-mongering, dictatorial tactics of past governments. And acknowledges the rights of Australians to decide how to manage their health and wellbeing.

Health Minister Greg Hunt was instrumental in bringing the issue to parliament, stating that legalising exportation is a ‘very important step for our domestic patients and our domestic supply.

Indeed, for domestic patients, marijuana plays a crucial role in easing the symptoms of a myriad of conditions, including epilepsy, chronic pain and multiple sclerosis. And the government’s decision to increase production will ensure those patients always have supply at hand.

However, it’s also a tactical business move. And exportation could establish Australia as a major player in this bourgeoning industry. As Mr Hunt confirmed:

We would like to be, potentially, the world’s number one medicinal cannabis supplier.

Recognising the immense potential of the industry, the Victorian government has elected to supply half of Australia’s medicinal cannabis needs by 2028. It predicts it could contribute up to $90 million to the state’s economy.

Victorian medicinal cannabis company Cann Group has also predicted there will be a global shortage of marijuana as more countries legalise the product and demand grows.

This theory is backed by Brendan Kennedy, the president of Canadian cannabis producer Tilray, who stated:

If you look at the number of countries that allow medical cannabis it’s about 30 today and I would expect that to grow to about 40 by the end of this year.

It also seems that as the number of countries allowing medicinal cannabis use grows, so too will the legalisation of recreational use.

With Canada working towards legalising recreational marijuana this year, it joins countries like Russia, Italy, Switzerland, the Netherlands, and a growing number of US states.

Clearly, this is a market on the verge of exploding. And Australia is on the cusp of becoming a world leader.

The federal government’s new laws will likely come into effect at some point this month. And waiting on the frontline are a few Aussie pot companies poised to take advantage. If you can get in on these companies early, you could be a part of the ‘green rush’ Australia is set to experience.

To make the most of the incredible potential gains on the table from the rapidly expanding marijuana market, click here.



View More Articles By The Daily Reckoning

The Daily Reckoning's mission is to look at the investment world and the financial world in a sceptical and contrarian way. To do that day in and day out and tell you honestly what we see, even if it isn't always popular. If you'd like to subscribe to an alternative look at the mainstream interpretation of events, join for free here.



 

RECENTLY ADDED TO SHARECAFE


 › Italy Is A Worry - But 3 Reasons Not To Be Concerned About An Itexit
 › Digital Growth Spins Aristocrat Higher
 › Shareholders Seal Westfield Takeover
 › Reliance Joins Reece In Big Plumbing Expansion
 › Friday At The Open
 › Marcus Today End Of Day Report
 › Thursday At The Close
 › High Grade Results Confirm Why BlackEarth Is Aggressively Drilling Madagascar
 › An Intriguing Insurer Plus A New Data Centre Entrant
 › What Kind Of Investor Are You?
 › If Content Is King, Where Does Spotify Stand?
 › Private Health Insurers Remain Vulnerable
 › Australian Corporate Bond Price Tables
 › Market At Midday On Thursday
More ShareCafe   

GET THE SHARECAFE BREAKFAST BRIEFING


Delivered free to your inbox before the market opens each trading day. Sign up below +

SHARECAFE VIDEO


Wilson moves into Global Equities

More video