With a post-Brexit free trade agreement with the UK in the offing, LeafCann CEO and MCIA board director Elisabetta Faenza looks at the export opportunities for Australian cannabis companies.
With the possibility of Australia and the UK reaching a consensus on a new free trade agreement (FTA) this month, now is a good time to look at the UK market and evaluate the opportunities for Australian medicinal cannabis producers and manufacturers.
The new FTA could see tariff-free access for goods being phased in over a 10-year period, meaning the costs of long-distance transport will be offset by little or no tariffs in the future.
Furthermore, there is discussion around the minimisation of costs at the border for customs procedures for both sides. This may have an enormous impact on business operations that have shied away from the weighty administrative obligations necessary to bring products to the UK, particularly with the added burden of ensuring the safety and quality of products through lengthy regulatory processes.
The UK medicinal cannabis market is much larger than the Australian market. By a long way. Current estimates of patients with diseases or conditions that could benefit from medicinal cannabis are around 40 million people, with around 18 million suffering from chronic pain or arthritis alone.
The UK also has a large elderly population with more than seven million people in aged care. Clearly, there is a lucrative market if the conditions are right for Australian exporters.
One market that is currently in focus is the £450 million CBD novel foods sector. Although this sector was until recently flooded with products of variable quality, and had many competing companies, new regulations now stipulate that only products with CBD content that have a validated novel food application can remain on the market from March 31 2021.
This has forced the more serious companies to apply for registration and the less scrupulous to consider leaving the market.