Flower shortage hits Australian patients

Australia’s flower shortage means patients could be waiting months to get their prescriptions filled. Cannabiz editor-at-large Rhys Cohen asks what’s going on.

Australia is in the midst of a serious medicinal cannabis flower shortage.

Hundreds of patients are being told their prescribed medicine is unavailable, and it could remain that way for weeks or possibly months to come. The shortage is so widespread that even patients who have been approved/prescribed multiple flower products in tandem, specifically to protect against supply interruptions, have been left out in the cold.

In an industry that has experienced more than its fair share of issues, the current shortage stands out for several reasons.

Previously, shortages have tended to only impact one or two major suppliers or product lines at a time. These shortages force patients to book new appointments with doctors, who must then apply for new approvals and/or write new prescriptions for an alternative product. These interruptions can cost patients hundreds of dollars in consultation fees, and leave them without their necessary medication while an alternative product is secured.

The current flower shortage has hit almost every Australian distributor simultaneously. This means very few alternative flower products are available. And the few that remain in stock will likely soon be exhausted.

According to the industry members who spoke with Cannabiz for this story, there are several issues relating to both supply and demand which are responsible for the current situation.

Demand

All the companies Cannabiz spoke with agreed that demand for flower has increased significantly and unexpectedly, even alongside the growth of demand for medicinal cannabis products overall.

One product company Cannabiz spoke with demonstrated just how popular flower products have become. In Q1 2020, flower accounted for only 3% of their product demand, relative to their other offerings. That increased to 11% in Q2 and 16% in Q3. By the end of 2020, in the final quarter of the year, flower had reached 24% of their total product demand.

The increasing quality and affordability of flower products can partly explain this increase. But there are other factors at play.

The accelerating number of medicinal cannabis clinics, and their increasingly fierce price competition, has made it easier and cheaper for patients to acquire a medicinal cannabis prescription. In particular, it is Authorised Prescribers of medicinal cannabis flower products (most of whom are employed by the clinics) who are facilitating a majority of this demand.

We can infer this from patient access figures: despite the number of active patients growing continuously month on month, SAS-B approvals have remained relatively flat since July 2020 – fluctuating between 5,000-6,000 per month, only spiking to 8,000 in February 2021. Much of the growth in patient numbers has been facilitated by compounded products, which do not require SAS-B approvals. But flower products are not able to be compounded.

“At least with the ODC you can pick up the phone and speak to someone. Health Canada doesn’t care who you are or what the problem is.”

Over the same time period, the number of Authorised Prescribers has more than doubled. In June 2020 there were 84 currently active APs, growing to 115 in September. As of February 2021, there are now 215.

It is difficult to know the extent to which this trend is caused by APs proactively choosing (for whatever reason) to recommend flower more frequently, or by more patients asking for flower specifically.

One product company Cannabiz spoke with remarked that over the last several months, their patient cohort has started to skew younger and more male. It seems plausible that as clinic and product costs decline, the medical system has begun to appear more attractive to people who might not otherwise think of themselves as medicinal cannabis patients.

Another company suggested that the increasing demand for flower might also reflect changing attitudes in doctors who are becoming more comfortable prescribing such products. And since the vast majority of the 600,000-odd medicinal cannabis users in Australia are still reliant on the black market, it is reasonable to assume they would express a preference for a familiar product type.

Supply

But surely companies should plan for increasing demand? They’re in the business of selling medicinal cannabis products, why are they surprised when people buy the stuff?

The challenge is that it often takes three months or more from the time an Australian company requests an import permit from the Office of Drug Control (ODC) to when Health Canada (where most flower is from) issues a corresponding export permit. And this is largely the fault of the Canadians.

Health Canada can take several weeks – sometimes months – to process and issue export permits. The ODC, by comparison, turns around requests within one or two weeks. And as one company remarked to Cannabiz: “At least with the ODC you can pick up the phone and speak to someone. Health Canada doesn’t care who you are or what the problem is.”

Many product companies operating in Australia have several different products all on the market at the same time. These products have a certain shelf-life and expiry date, and if they order too much and can’t sell it in time, it goes in the bin and that’s thousands of dollars wasted. So, they need to try and forecast what the demand is going to be in around four months’ time for each of their different product types, and hope they don’t over- or under-order.

When a trend like the recent rise in flower demand comes along, it can catch companies by surprise. And even though they can see demand increasing, companies need to make costly commercial decisions based on where they think that trend will end up. That’s hard to get right, especially when the consensus so far has been that Australia isn’t really a big flower market.

What about the locals?

Large-scale, local cultivation was meant to ensure a consistent supply of Australian product. So where is the local flower? Despite medicinal cannabis cultivation being legal for nearly five years, only one company has managed to bring locally cultivated flower products to market: ANTG.

Many companies are planning or attempting to follow suit. But the underfunding and operational dysfunction within the ODC, combined with the strict quality standards imposed on locally grown products (especially flower products), means no-one else has succeeded in doing so yet.

What is to be done?

Obviously, it needs to be easier for companies to bring locally cultivated flower to market. And the barriers to that are well known. The way we currently manage commercial licences and permits is not working, and more effort must be taken to accelerate that change.

It would be great if patients and doctors could more easily substitute products that are facing shortages. Part of that is knowing which products are in stock. Governments at all levels have so far made no effort to provide an independent and up-to-date source of that information, which is disappointing.

This current flower shortage will eventually be filled by larger imports. But it is part of a wider trend that we must take notice of.

As prescription medicinal cannabis gets cheaper and easier to access, more patients currently using non-prescription cannabis will engage with the medical system and many of them will want to continue using a product form that is familiar. Demand for flower will likely continue to increase as a result.

It is also possible that some of Australia’s 1.9 million non-medicinal cannabis users may start accessing cannabis via prescription. The solution to this is not to ensure that medicinal access remains difficult and expensive. Recreational consumers require and should be entitled to legally access quality-controlled cannabis without endangering their health and safety. It should not be left to the medical framework to reduce these harms.