Politician and campaigner Fiona Patten says the treasury should look no further than cannabis in its quest for economic growth.
While the industry is abuzz about the TGA’s invitation to consult on the future of medicinal cannabis, we didn’t make the invite list for another important consultation that was held in Canberra this week.
Treasurer Jim Chalmers said nothing was off the table at his economic reform roundtable, but I can say confidently that cannabis wasn’t on the menu and it should have been – not just to keep the participants chilled either!
Cannabis could add A$30 billion or so to the nation’s coffers, which would be welcomed by just about everyone.
Most of the schemes that have been put forward to the treasury will have been generated from the same old sectors, from the same old financial models, and by pulling the same old levers. And most of the suggestions that have been floated so far are meek or currently politically impossible.
So now is the time to inhale deeply, listen to experts and see cannabis as an opportunity not a problem. Don’t believe the stoner sloth myth, cannabis in Australia can be great for improved productivity, investment and substantial economic growth.
Just a couple of small regulatory changes could grow our medicinal cannabis industry, increase research and development investment and assist the hundreds of thousands of Australians who are already benefitting from the treatment. It could grow local industries and turn Australia into an advanced manufacturer and exporter of quality medicine.
There were high hopes for medicinal cannabis when it was legislated in 2016. Growth plans were developed by state governments and they forecast that it would develop into a significant industry and a lovely little earner. Australia was well placed to grow excellent medicine to supply increasing local and international demand.
Instead we are still importing a majority of the medicinal cannabis that is dispensed in Australia.
The industry requires support and sensible regulation that protects patients and enables research and development. We need governments to reduce red tape to help build a sustainable crop and the new medical manufacturing industry that will come with it. Australia already has world-class horticulture, a strong pharmaceutical industry and the right climate.
Like Canada, let’s take a domestic-first approach to medicinal cannabis and give the economy a real green boost.
According to the Australian Cannabis Cultivators Guild, such a policy could create around 5,800 jobs, many in regional Australia, and foster a self-sufficient industry poised for global export.
Domestic production ensures rigorous oversight, guaranteeing high-quality, safe products for patients, unlike imports that often bypass equivalent scrutiny.
The Penington Institute has valued Australia’s medicinal cannabis market at $1 billion, up from just $30 million in 2019. By supporting local growers we could almost immediately add another $350 million to that figure.
And one small legislative change that would cost nothing could stimulate important and necessary research and development in medicinal cannabis with the opportunity to generate billions in export revenue.
There are 45,000 endometriosis hospitalisations in Australia every year. Promising trials of a new cannabis-based medicine to treat the condition are beginning, but researchers are struggling to recruit patients because they must agree not to drive while trialling the medicine under current laws.
“Now is the time to inhale deeply, listen to experts and see cannabis as an opportunity not a problem.”
fiona patten
They just can’t do this. Most of them need to drive for their work, families and health. By allowing patients to drive when safe (just as they can when they are using other much stronger pain-relief medications like opioids), these trials and many others would be undertaken in Australia and could help millions of people here and across the globe.
Such a small change that brings us in line with most other countries could be a game changer for productivity and growth.
Small reforms to workplace health and safety rules could also contribute to reduced sick days and increased productivity. Due to outdated occupational health and safety policies, patients stop taking their cannabis medicine so they can work. Simply updating these policies to recognise prescribed medicinal cannabis would lead to fewer sick days and people who are more productive in life and work.
Regulating the adult use of cannabis has been a proven revenue raiser in the many countries and jurisdictions which have implemented it. They have reaped the benefits of increased tax revenue and the diversion of police resources to organised crime and violence. A great example of this is Colorado where the state’s education, housing and hospital budgets have been funded to the tune of US$284.5 million in 2022-23 through taxing adult-use cannabis.
Penington has published a series of reports on cannabis in Australia. It found that the illicit market was valued at around $5 billion in 2019 and Australian adults consumed about 441 tonnes of cannabis. It sounds like a lot, but among the 2.6 million adult consumers that is a modest 136 grams per year. Not only do we leave this significant revenue on the table for organised crime, but we also spend $2.6 billion a year in a futile attempt to curb it.
Penington looked to other jurisdictions to forecast how much revenue a regulated market in Australia might generate. In Canada, which is about 1.5 times bigger than Australia, it found that in three years (2018-2021), “Canadian cannabis businesses invested C$29 billion in real estate, infrastructure and technology, added C$43.5 billion to Canada’s GDP and sustained an average of 98,000 full-time equivalent jobs per year”.
It also generated over C$15.1 billion in federal and provincial tax.
My back of the envelope calculation – taking a third off the Canadian numbers – adds $10 billion in tax revenue and an extra $30 billion to our GDP.
The recent ALP state conference called for recreational cannabis to be legalised, inclusive of state-owned cannabis distribution, with the revenue generated used to fund a number of areas including mental health, indigenous health and work cover.
The community supports this change and it appears that the treasurer’s own party supports reform.
With a deficit forecast of $42 billion, nothing should be off the table. Medicinal cannabis reform is low-hanging fruit and an extra $10 billion into our coffers from adult use will build a lot of houses and employ a lot of teachers and nurses.