Australia may have been the “tortoise” of the cannabis industry, but it is now preparing to become the dominant exporter of medicinal cannabis in the world, a conference has heard.
Fleta Solomon, managing director of WA-based Little Green Pharma, predicted Australia will “catapult” other international markets and is ready to “supply the rest of the world” with locally manufactured products.
But she warned the cost of doing business locally continues to be a major obstacle, and stressed the education of doctors remained critical if patients were to get the medicine they need.
Speaking at a virtual conference organised by data and intelligence firm Prohibition Partners, Solomon conceded the Australian industry had been slow to develop. But is has now maneuvered into a position of strength, largely because of the EU-Good Manufacturing Practice (GMP) quality of the product.
“It was a little slow to begin with… but that has its advantages as it means we are abiding by true and already practiced rules and regulations for other medicinal products and narcotics, and it’s treated just the same,” she said. “And that results in the best quality because of our rigorous testing.
“In the long run, it’s like the tortoise and the hare. I think we’re going to come through as the tortoise, because we are now ready to supply the rest of the world.
“The number one factor is the quality of the product that is coming out of Australia. It is second to none. The EU-GMP quality is just incredible and that helps Australia catapult ahead of some of the other countries because we already have that framework set up. Now it’s just a matter of producing and exporting into other jurisdictions.”
Prohibition Partners co-founder Stephen Murphy agreed that Australia has cultivated and manufactured some of the world’s highest grades of cannabis.
He described the approach as “slow and steady”, but that has not been without its drawbacks.
“It has taken significant time to build patient count, it has taken significant time to build production and manufacturing and taken significant time to create patient access,” he said. “Not all of those are ideal. But what it does lead to is a more sustainable growth trajectory.”
Solomon said Australia has learned from the struggles of Canada, which legalised medicinal cannabis in 2001 and recreational use in 2018.
Australia has also benefited from the “rigorous and quality TGO-93 framework” that governs the standard of medicinal cannabis in Australia.
“From the get go it was always going to be medicinal or pharma produced, or grade,” she said. “We did not have to comprehend or think about recreational cannabis. It was just medicinal, and with that comes the GMP that is essential.
“It is a prerequisite when you are selling into international markets, particularly the EU that requires the highest quality. We are fortunate because our GMP is compliant with the EU-GMP regulations.”
Yet significant challenges remain, Solomon continued, with high labour and electricity costs among the “downfalls” of the local industry. Furthermore, such demanding quality requirements also come with a hefty price tag.
“There is so much testing, investment and resources required to pass the TGO-93 that it makes it a little bit more costly for companies like ours to produce and buy raw materials from other Australian producers,” she explained.
Those costs mean Little Green Pharma has looked overseas for raw materials, provided they hit TGO standards.
Solomon said Australia will not be able to compete with cultivators in markets such as Colombia and Portugal and, given time, Lesotho, which is thought to have perfect conditions for growing cannabis.
“The pricing of raw materials, including extract, is plummeting all the time so it’s in our best interests to look at the quality of the produce that other countries are supplying rather than just using it locally,” she told the conference.
While acknowledging she “would love” to buy locally, it just doesn’t stack up commercially.
“We really do need to look at bringing the prices down not only for our patients but also for our investors who are looking for a return,” Solomon added.
Solomon also called for the Office of Drug Control to be properly resourced if Australia is to hit its potential. Companies can wait “years” for a license or permit, she said, which is hindering the local industry.
Asked to comment on the next 12 months for the Australian industry, Solomon said the on-going education of doctors will remain paramount.
“Doctors still don’t understand cannabinoid medicines and how the endocannabinoid system works,” she said. “This is new, and many – most – doctors still need to be educated. It is the most important role that we all have.”
Earlier, Solomon said exports were the only way for Australian companies to remain sustainable given the country’s small population.
Building economies of scale and bringing prices down are crucial, she said, and that can only come from servicing international markets as well as providing product for local patients.