Cannabiz editor-at-large Rhys Cohen makes his predictions for the year ahead.
Happy new year, everybody!
I’m writing this from the hospitable comfort of my friend’s spare room, seeking refuge from my Covid-positive housemates. I have a wedding to attend on Saturday that I simply refuse to let the pandemic spoil. Thankfully, this is the worst of my troubles and most people I know are passably well. Here’s hoping you have also only been mildly inconvenienced by the bloody virus.
So, to take our mind off things, and kick into shape whatever shambles of a year this may turn out to be, here are five trends to watch out for in 2022. Given the interesting times we are living in, I’ve ranked them by likelihood – starting with the ones I’m confident about, and ending with the more speculative. Here we go…
1. Industry growth (especially flower)
FreshLeaf Analytics estimates that, by the end of last year, we probably had at least 100,000 currently active medicinal cannabis patients, who spent approximately A$230 million on their medicine in 2021. At the current rate of growth, it’s possible that the number of active patients will double or even triple by the end of 2022.
More products are coming online, prices are coming down, clinics are opening up, prescribers are getting educated, and the SAS and AP schemes have been overhauled to accelerate access. To top it all off, Medicare coverage for telehealth appointments, temporarily introduced in response to Covid, has been made permanent. Everything’s looking up, so long as we can avoid any major scandals.
In 2021 there was a total of 122,565 SAS-B approvals. Of those, about 60% were for men and almost 30% were for flower products. In December 2021, with 11,339 approvals, about 63% were for men and around 32% were for flower. So, as the overall market expands, we can expect flower products to continue taking market share, largely driven by men in younger age brackets. Much of this is probably people swapping over from self-medicating on illicit cannabis, and I don’t see this trend dying down any time soon. There are over two million Australians who used cannabis in the past 12 months, so a few hundred thousand is a good start. We are only just seeing the tip of this iceberg.
2. Quality standards reforms
It’s now been over a year since the federal government first indicated it would take action on the uneven playing field, where imported products are held to lower quality standards than locally made ones. The Therapeutic Goods Administration (TGA) previously advised industry that a second round of consultation would be held before the end of 2021, but that didn’t end up happening. And the clock is ticking on the TGA’s promised timeline of a March 2022 implementation date.
The good news is that these reforms are still being progressed, and we might be hearing more about them very soon. So sponsors should ensure the TGA has the correct contact information, or your email might get lost on its way to your inbox! All jokes aside, you do have to take your hat off to the TGA, who are still managing to progress medicinal cannabis reforms in what must be one hell of a work environment. No news on specifics just yet, but watch this space very closely.
The other parts of this reform process are to do with mandating child-resistant packaging on medicinal cannabis products and tightening up the compounding pathway. We’ve been seeing lots of new products emerge using re-sealable bags lately, and I’m no pharmaceutical packaging expert, so if you have an informed opinion about how packaging reforms might impact products in-market, please hit me up. The last time we heard from the government about compounding, the possibility of requiring prescribers to notify the TGA about compounding prescriptions was floated. But that was back in August, so what they’ll actually implement is still anyone’s guess.
3. More psychedelic/cannabis crossovers
This may seem a bit out of left field, but it’s something I believe will become increasingly relevant for the cannabis industry this year. You might have caught the big announcement last week that the federal government selected seven clinical trials to receive a share of $15 million in funding from the Medical Research Future Fund. For those of us who were kicking around back in 2015, this is deja-vu. Medicinal cannabis legalisation was also preceded by significant government investments in clinical trials, and debates over downscheduling.
Psychedelics, MDMA and ketamine aren’t just stepping on the historical heels of cannabis, these sectors are increasingly overlapping. Not just in terms of medical scientific research (see ex-Office of Medicinal Cannabis Victoria Director Daniel Perkins co-founding the Psychae Institute, or Lambert Initiative chemistry team lead Sam Banister co-founding Psylo, among many others), but also commercially (LGP and Emyria spring to mind) and politically. Who could forget Dr Brian Walker’s four-day stint as a consultant to Creso Pharma?
Cannabis is materially and culturally different to these emerging therapies, but we can expect to see similarities in how these spaces evolve. For example, it won’t be long until we have dedicated psychedelics clinics, following a similar commercial model to cannabis clinics. These substances are similar enough in terms of regulatory requirements (being unregistered medicines) and are likely to attract similar kinds of patients, although the services on offer will of course differ substantially.
4. Conferences, travel and international business
One of my favourite parts of working in the cannabis industry has always been its international nature. As an extroverted travel bug, I love going to conferences and meeting new people from around the world. And as a trade-exposed industry in a trade-exposed country, being able to visit, connect with, and learn about overseas industries and regulation is often a crucial business requirement for Australian cannabis companies.
For many of us, Covid poured cold water on a lot of that. Business still got done, and Zoom meetings are practical and all, but it just wasn’t the same. Is it speculation or simply naïve hope that 2022 will turn that around? I remain, as always, cautiously optimistic.
5. Law reforms
We all know the myriad injustices and downright stupidity that still plague both medicinal cannabis patients and the Australian community at large. From drug-driving laws that needlessly penalise unimpaired drivers and discourage the use of medicinal cannabis; to private health insurance and DVA funding; to the criminalisation of personal cannabis cultivation, and the steadfast refusal of the major parties to even consider the fact that the vast majority of Australians believe cannabis should no longer be criminalised.
What should we expect out of 2022? Right now, I don’t see anything on the horizon in the short term. Of course, there is great work being done on all fronts – from the Drive Change initiative, to the Royal Commission into Defence and Veteran Suicide, to the efforts of the Greens, Reason, and Legalise Cannabis WA Parties. The wheels of government turn slowly even when it’s business-as-usual and, barring any major shock to the system, these processes might take years to produce results.
But a year is a very long time in politics. There’s an apocryphal quote attributed to Lenin that goes, “there are decades where nothing happens and there are weeks where decades happen”. The status quo can remain stable for long periods of time, only to be suddenly and unexpectedly interrupted. The trick is to be ready to take advantage of these moments when they arrive.
Here’s to progressive disruptions in 2022.
Thanks, Rhys
John