In newly emerging cannabis markets, is the same green rush going to happen as in North America? "We've already been there, done that in Australia," says Peter Crock of Medicinal Cannabis Industry Australia at one of the panels at ICBC Berlin. "We definitely got caught up in the Canadian bubble as it was inflating with the whole recreational market coming on and the excitement that happened back in 2017/2018. The Australian system only came into effect in 2017, right when Canada was in full inflation mode. When the Canadian bubble burst, that definitely had effect around the world. It meant that we've had to pull our horns in Australia and New Zealand. Because we've got such a good regulatory structure underlying it, we've gone through that rough patch and are now in a strong position to move forward, without it being seen as another bubble coming up."

Carmen Doran of Helius Therapeutics adds that the New Zealand cannabis industry started to come online just as Covid hit and the country went into lockdown and a global financial crisis occurred. "We probably haven't seen the crash in valuations just because of the timing of when our industry came on. Yet we absolutely had some companies that were at higher valuations in the beginning, including Helius, that have now come down to more realistic valuations. But there hasn't been the crash we've seen in other places and I think the potential of New Zealand companies is actually undervalued. It will be interesting to see how things settle and how the valuations play out as New Zealand companies start exporting into markets around the world."

David Hyde of Hyde Advisory & Investments adds that the Canadian situation has been a learning curve for the world. "We already see a much different perspective on the European market from just a year ago. We're seeing a bit more realism now in terms of the valuations, although there is still quite a long way to go." David also adds that it's important to keep in mind that the European cannabis market is not a monolith with countries that are somewhat similar. "In reality, they're all very different. Even in Germany, all the states have slightly different takes on elements of import and export, for example. Your success relies on your understanding of the market you're interested in."

Prices and GMP
David also says that Canadian producers are looking for other markets to export to, because of the low prices in their domestic market. "In Canada, high-quality craft cannabis can sell for about 2 dollars per gram. That is a sad situation considering how much it costs to grow. As a result, there are lots of exporters from Canada looking for higher price points in the global markets." David gives Israel and Germany as examples.

Yet one country it will be more challenging to export to from now on, is Australia. Peter Crock explains that from July 1st onwards, cannabis imported into Australia needs to be according to GMP standards. "Before, GMP was not necessary for cannabis imports into Australia, even though local Australian producers did have to live up to GMP standards. At the start, because we did not yet have an industry producing any material, it meant that we could bring material in, which worked. But then some entrepreneurial people worked out that they can get a lot of product in that doesn't come with that GMP overhead on it. Now, this will no longer be possible. The important thing underlying all of this is that, in such a new market, we don't want confidence undermined at the patient and prescriber level," Peter says.

That confidence is very important in newly emerging markets like Australia and New Zealand, where patient numbers are growing rapidly. "In 2022, there were 60,000 medical cannabis patients in New Zealand. We expected it to double this year, but we can already see that the market is growing at an ever faster rate," Carmen Doran says. "Most of that growth is patient-driven. The medicine is really helping people, and they are telling others the benefits." According to Peter Crock, there have now been over a million approvals for access to medical cannabis in Australia. "That is a sign it is becoming mainstream. We've got around 4,000 doctors actively prescribing it. There's no doubt that there is growth in the market."

Click here to watch the full panel discussion.