FreshLeaf Analytics’ latest report reveals an industry at a crossroads. Martin Lane reports.

Australia’s legal medicinal cannabis industry will treble in size in 2020 and finish the year with 30,000 active patients and $95million in sales. But increased access, oversupply and falling prices will lead to significant consolidation next year, according to the latest report from FreshLeaf Analytics.

Join the Cannabiz revolution

Want to stay ahead of the cannabis curve with the latest local and international news, analysis and intelligence and access to Australia's legal cannabis industry?

This article is included with our Premium subscription.

The market intelligence company’s Q3 Patient, Product and Pricing Analysis, released this morning, found the number of products available for doctors to prescribe has doubled in the last year to 150.

Meanwhile prices have continued their downward trend, with a new floor price that is only 25% of the level the market started at following legalisation in 2016 and bringing prices for legal medicinal cannabis in line with products sourced on the green market.

While forecasting the prescription market will be worth more than $150 million in 2021, FreshLeaf predicted the year will be a turning point for the industry, with consolidation, regulatory reform, product and pricing changes paving the way for sustainable growth.

FreshLeaf Analytics MD Cassandra Hunt expects significant consolidation in 2021

Managing director Cassandra Hunt said: “The last 12 months has seen huge change in the industry. Record numbers of new products, rapid price declines and new regulations that will improve access and reduce patient prices. The next 12 months we expect significant industry consolidation and the emergence of long-term sector leaders.”

The report described a future state where informed patients could easily access affordable, high-quality medicinal cannabis products to meet mild to severe medical needs.

However, it warned in order for this to happen, medicinal cannabis companies will need business models that generate sufficient profits to reinvest in R&D, clinical data, new formats, jobs, technology and education.