Compass Cannabis operates one of the longest-running networks of holistic medicinal cannabis clinics in Canada. The company is zooming in on Australia's burgeoning medicinal cannabis market.
Founder of Compass Cannabis, Dave Martyn, predicts an 'explosive' period of growth in the Australian medicinal cannabis sector over the next 7–8 years. He pinpoints why Australia is one of the best international markets outside of North America for Compass's expansion:
- Positive regulatory environment, including eased conditions for over-the counter sales of medicinal cannabis products.
- Strong patient growth – up from 30,000 active patients in 2020 to 45,000 in early 2021.
- Gateway to the Asia-Pacific region.
The company has launched two Compass Lifestyle Clinics in Sydney and the Blue Mountains as part of its A$2 million investment in Australia. Further expansion is in the pipeline. Employee headcount is now over 20 and primed to grow.
Budding industry with enormous growth potential
Australia made landmark changes to the Narcotic Drugs Act 1967 in 2016. This simplified the administration of the medicinal cannabis scheme and cut barriers to developing the industry.
'Since the medical cannabis reform of 2016, Australia has become one of the fastest-growing markets globally,' says Martyn.
'Australia's cannabis regulatory processes are some of the most business-friendly in the world. We see strong opportunities, especially with the reclassification of medicinal cannabidiol (CBD) products.'
Australia's Therapeutic Goods Administration (TGA) approved over-the-counter sales of certain low-dose CBD preparations in 2020. Previously, they had been prescription-only medicines.
'Over-the-counter CBD has already found big markets in the US and UK. There is no reason we won't see the same in Australia,' says Martyn.
Record-breaking rise in medicinal cannabis patients
Active patient numbers in Australia are forecast to grow to 75,000 by the end of 2021. This is up from 45,000 earlier in the year, reports industry researcher FreshLeaf Analytics. There were 30,000 patients in 2020.
'Australia's patient growth has been record-breaking, but it is not yet where we see it heading,' says Martyn.
'Our Australian clinics are booked at every point in time for 6 weeks during slow periods and for 12 to 14 weeks during busy periods. And that's with virtually no outside advertising.'
Compass currently has 2,500 active patients in Australia. 'A year out from now we will have around 4,000 active patients. We expect to grow that significantly,' says Martyn.
Growing a presence in Australia
Compass plans to establish a presence in each Australian state. The cities of Melbourne and Brisbane are next on its hit list.
'We are also looking also at public market participation,' says Martyn. 'We've had an offer to merge with a cultivator. We're in discussions with a group based out of Brisbane.'
During COVID-19, the company's telemedicine and virtual health services have been in high demand. Compass also plans to expand the reach of those services.
Medicinal cannabis is used to treat a range of conditions, including:
- cancer
- anxiety
- chronic pain
- inflammation
- diabetes
- insomnia
- battlefield-related trauma.
Strong market growth, high revenue
Revenue from Australia's medicinal cannabis market is expected to double to A$200 million in 2021, up from around A$100 million the previous year.
The Australian Government boosted access to international markets in 2020, passing an amendment to legislation governing the export of narcotics. The move simplifies the certification process to export medical cannabis and hemp products. Markets include Southeast Asia, China, Canada, the US and the European Union.
'I think Australia will probably have a dozen billion-dollar companies, or more, in the years to come, especially as it is an entry point into Asia-Pacific,' says Martyn.
Trusted name and gateway into Asia-Pacific
Australia as a country carries a strong brand. It has a reputation as a safe, clean and sustainable manufacturer throughout the Asia-Pacific region.
'It has the natural resources for cannabis cultivation,' adds Martyn. 'Australian pharmaceutical-grade products are tightly regulated. They are high quality. This makes Australia uniquely positioned as a launching pad into the Asia-Pacific region.'
Martyn says that Compass will also look to export products, such as CBD.
'CBD is viewed as a strong anti-ageing element in Asia and there are some regulatory frameworks coming in. We've already had discussions in Japan.'
Targeted, hands-on advice from Austrade
Austrade provided vital support to Compass as the company progressed its Australian expansion plans.
'Austrade's been excellent,' says Martyn. 'They helped us navigate Australia's regulatory and tax system and introduced us to industry and government contacts. If we ran into an issue, we knew we could go to Austrade for guidance.'
Martyn describes Australian public policymakers as more approachable than their 'standoffish' North American counterparts.
'Generally, we have had to be the aggressor in trying to effectuate evidence-based change, just getting in front of people,' he says. 'Refreshingly, Australia's policy makers were engaged in the discussion.'
Fast-track visa program to Australian residency
Austrade also briefed Martyn on the Global Talent Visa, a streamlined visa pathway for highly skilled professionals to work and live permanently in Australia. He and his family will relocate to Australia under the scheme in late 2021 to spearhead the company's expansion in the region.
'I like where Australia stands,' he says. 'Politically, the government is stable and strong. Socially, the country feels unified. Australians are proud to be Australian.
'For business, the risk-reward balance is good. Australia is set to become a global leader in the medicinal cannabis industry.'
About Austrade
The Australian Trade and Investment Commission (Austrade) is the Australian Government's international trade promotion and investment attraction agency.
We deliver quality trade and investment services to businesses to grow Australia's prosperity. We do this by generating and providing market information and insights, promoting Australian capability, and facilitating connections through our extensive global network.
To discover how we can help you and your business, visit austrade.gov.au or contact us on 13 28 78 (within Australia).
