Medicinal cannabis prescriptions are increasing rapidly, but Australia’s “barely scratching the surface”

Dominic Powell /

cannabis prescriptions

Little Green Pharma chief executive officer Fleta Solomon. Source: Supplied.

Australia is “barely scratching the surface” of the nascent medicinal cannabis industry despite local doctors being reluctant to prescribe the new drug, says Little Green Pharma chief executive Fleta Solomon.

Solomon’s business produces the only Australian grown, harvested and manufactured medicinal cannabis product available on the market, but the founder tells SmartCompany doctors are still “cautious” to recommend cannabidiol to patients.

However, she believes this is set to improve over the coming years as more young medical students work their way into general practices.

“Until recently, medicinal cannabis was not part of the medical school curriculum and is only now being introduced. While we wait for the next generation of physicians to come through, education of the endocannabinoid system is key for existing medical professionals,” Solomon says.

“The public is very accepting of medicinal cannabis and have begun to assist physicians in their education.”

Little Green Pharma was established in late-2016, shortly after medicinal cannabis was legalised Down Under, and is a rarity in the industry as the company is still private, choosing to not list on the ASX as of yet.

Solomon has been chief executive officer of the business from the get-go, saying the goal of Little Green Pharma was to create a business and brand doctors would feel comfortable with.

Since launch, the company’s growth has been rapid, significantly increasing the size of its team over the last 12 months. Solomon says while she’s excited to see such a fast-growing industry, she notes some players in the market are making “claims which have not been matched with actions”.

“Little Green Pharma, until the last six months, kept a low profile. Our view was: tell people what we have done, rather than what we hope to do,” she says.

The company released its first products in August 2018: two cannabis oil products with different ratios of tetrahydrocannabinol (THC) and cannabinol (CBD), and is set to release more in the coming months.

Prescriptions picking up

Solomon says doctors have been cautious to prescribe THC and CBD to patients, but figures show the prescription rates are slowly increasing. It took 22 months for 1,500 applications to go through the Therapeutic Goods Association, and only three months for the next 1,500.

“There are two million Australians living with chronic pain. Add to this those with chemotherapy-induced nausea and vomiting and the other conditions where medicinal cannabis can play a role,” she says.

“Even if only 10% of them are suitable for cannabinoid therapy this means we are barely scratching the surface.”

Looking forward, Solomon refers to the “booming” overseas medicinal cannabis industry, where it is estimated about 2% of populations would benefit from access to the drug.

With Australia coming from a standing start, Solomon predicts considerable growth over the coming years, and says the future is bright.

“With Australia’s vision to become a premium provider of cannabis-based medicines, the export market will allow our Australian growing operations to expand bringing down the price of cannabinoid medicines for Australian patients,” she says.

“Ultimately we are about improving the lives of people in Australia and around the world and creating jobs.”

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Navigating the ‘green mist’: Tips for marketing a cannabis business and debunking stigma to boot

Sarah Cichy /

SHUK Communications

SHUK Communications founder Sarah Cichy. Source: Supplied.

It’s high time for progressive businesses to get involved in the cannabis industry and an opportune time for PR professionals to navigate through the ‘green mist’ and act as an informational intermediary to catalyse and educate people to reconsider their preconceptions about this growth sector.

When the cannabis industry comes to mind, it’s natural to think of jobs in cultivation and distribution. But the future looks green indeed, with a wealth of potential in other cannabis-related industries, including investment, advocacy, agricultural innovation, botany, wellbeing, medicine and science plus specialist PR and media to help to share these narratives.  

The industry as a whole is nascent. As the global mindset towards cannabis alters and evolves, brands working in this dynamic, young market will have many unique obstacles to overcome.

As competition in the cannabis industry matures, companies should focus on building brand awareness through education, authenticity and accountability.

So, with this in mind, here are some key considerations for those looking to market their cannabis-related businesses.

Be an expert in world-leading compliance

To create the best possible PR outcomes for your brand, staying up-to-date with world-leading compliance is critical.

For the foreseeable future, brands who want to enter the cannabis space face fundamental hurdles, including a conflicting array of local, state and federal regulations.

Stay aware of the very latest policy and legislation and develop a communications strategy with education in mind to begin to leverage PR opportunities without risking legal pitfalls.

Industry-inclusive PR matters

The task of marketing a product that was, until very recently, seen as a potentially negative drug of addiction is enough to test the mettle of even the most experienced PR expert. It’s still very much a budding sector and, with that in mind, any cannabis-related business needs a well-orchestrated communications campaign to ensure they rise above less-than-favourable past perceptions.

At its core, effective PR is about stimulating deeper conversations and centring communication around education.

Raising general industry awareness is the first step, and those working in PR in this space must take a more holistic view. It is important to have a clear and collective commitment to change societal perceptions and find innovative solutions to problems, while at the same time keep our community safe.

Navigating thought leadership-style articles that demystify confusion about local and country-level regulations, proactively mitigating reputational risk and articulating individual client benefits with compelling clarity are all part of the PR process.

Share science and technology

The cannabis industry is extolling the virtues of science as a saviour of people’s wellbeing and better health opportunities by sharing curated information and broader research findings with clients and customers.

PR professionals have an opportunity to share over-arching industry-positive messages that help to celebrate science, embrace technology and elevate innovation.

Consumer education is more important than ever before. As a brand, manufacturer, dispensary or PR practitioner, this is your opportunity to be that trusted source.

Corporate responsibility

As well as appreciating the importance of how brands can help people, brands that showcase authentic corporate responsibility are also on the right path towards achieving powerful PR opportunities.

For this to be a sustained phenomenon, companies must demonstrate that their industry is truly responsible — both in Australia and beyond.

Safety as a priority

While legislation across the world is controversial and global expansion may concern purists,  the legalisation of cannabis and cannabis-derived products continues to gain momentum.

I believe it is a genuine public health priority, an exercise in social responsibility and goodwill gesture by cannabinoid brands and PR professionals to focus our efforts as an industry on taking healthcare to patients.

Such a stance is consistent with the tenets of responsible society, responsible commerce and responsible medicine.

If we can achieve this  while simultaneously supporting the best and brightest innovators we can achieve a new, commercial equilibrium in medicine, where the industry values its patient’s wellbeing, while taking supporting dynamic science and nurturing talent.

Competition will strengthen this sector

The burgeoning global cannabis sector has already created an exciting stimulus for innovation.

The opportunity exists to show the industry as being a vital part of the dynamic medtech sector. By encouraging people to view the industry in a new light, old stigmas will fall away, and new understandings will develop.

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Budding boom: All you need to know about Australia’s stake in the fast-growing cannabis industry

Matthew Elmas /

In the words of legendary reggae artist Peter Tosh, some call it tamjee, some call it the weed, some call it marijuana, and some of them call it ganja.

Whatever the phrase, Tosh’s 1976 song and album by the same name, Legalise It, was more than just proof of his talent as a solo-artist after splitting from Bob Marley’s band the Wailers.

More than 43-years later, cannabis, a plant with an ancient history, is a $20.1 billion dollar legal industry worldwide and is expected to more than double in size over the next five years.

In pursuit of new medical treatments and enough tax revenue to build hundreds of schools, governments around the world have heeded Tosh’s advice.

In Australia, that journey is just getting started. In 2016 the federal government planted a seed for a local medicinal cannabis industry, and while barely three years old, business is already being done.

Cannabis entrepreneurs are cropping up all over the place in Australia as early movers get ready to cash in on what could become a $1.2 billion industry over the next 10 years, according to figures put together by prohibition partners last year.

The Greens, citing Parliamentary Budget Office findings, believe the industry will grow to $2 billion over the forward estimates.

Cannabis: The state of play

The legal framework around medicinal cannabis in Australia is still evolving and remains tightly restricted, but patient numbers are on the up.

Look no further than Australia’s capital, where the ACT Legislative Assembly is considering actually decriminalising possession of under 50 grams of cannabis this week.

At the end of 2017, there were 158 approved medicinal cannabis patients in Australia. By the end of January this year there were 2,800, according to TGA figures. Slow, but steady.

Now, after the Therapeutic Goods Administration moved to streamline the application process for medicinal cannabis patients last year, the industry is preparing for a boom.

Adam Miller is the founder of BuddingTech, a consultancy firm dedicated to Australia’s emerging cannabis industry.

Miller is predicting medicinal cannabis patient numbers to surpass the 120,000 mark in the next four years as education programs aimed at getting doctors across the country familiar with prescribing the drug take off.

“We’re at a tipping point,” he says.

“There will be a time, and it’s getting closer, when enough doctors will have been convinced of the evidence, whether it be clinical research or anecdotal, where cannabis could be considered a first-line treatment.”

Despite legislative reform in large international markets like the US and Canada, medical cannabis research is still in its relative infancy after decades of complete prohibition.

That, according to Miller, makes Australia’s emerging industry ripe for disruption, with existing products in the market still limited to relatively “primitive” oils and tinctures.

BuddingTech founder Adam Miller. Source: Supplied.

“We’re still in the dark ages of cannabis research, there’s a renaissance going on, but we’re dealing with 500 compounds in this plant,” Miller explains.

So what does Australia’s cannabis landscape look like, and where do the opportunities lie?

How is cannabis prescribed?

To date, there are 58 approved practitioners across the country who can prescribe medical cannabis products to patients within a segment they’ve been approved to administer by the TGA.

For other doctors, the TGA’s special access scheme requires an application form to be filled out for each patient, detailing their medical history and justifying why medicinal cannabis is an appropriate treatment.

It’s an onerous process, however, Australia is unlikely to stray from it anytime soon, despite more open medicinal models being developed in the United States and elsewhere.

However, by keeping the model restrictive, it’s also much easier to capture patient data, allowing medical researchers, doctors and regulators in Australia to understand medical cannabis in a way that’s impossible in other markets.

Spearheading more widespread adoption of cannabis among doctors are emerging businesses which are specialising in cannabis prescription.

Over the last six months one such business, Cannabis Access Clinics, has opened up practices in Melbourne, Sydney and Brisbane, specialising in the regulatory hurdles surrounding cannabis prescription currently.

Right now cannabis isn’t a first-line treatment in Australia, meaning clients must be screened, requiring “conventional treatments” to have failed to fix a medical issue, and a letter of support from a patient’s GP or specialist.

The TGA has, however, introduced an online system allowing special access scheme applications to be lodged online, while those in some states can submit an application to both the state government and the TGA at the same time.

That might not sound like a big change, but the streamlined process is helping to boost patient numbers and buoying investors.

Politicians wait on drug law review

Meanwhile, the Medical Cannabis Council, a group set up to lobby governments on behalf of the industry, is focusing on securing further reform to improve patient access in 2019.

Blaise Bratter, general manager of the council, tells SmartCompany that’s not the only thing on the agenda.

Bratter says the council wants to “create a system to allow patients to drive when on medicinal cannabis (when it is safe to do so)”, as well as increasing funding for the Office of Drug Control to speed up license approvals for farmers.

Politicians around the country are waiting for the completion of a review into the Narcotic Drugs Act, slated for October, to decide where to go next with medicinal cannabis regulation in Australia.

“I believe it is unlikely there will be any significant changes to legislation if the Coalition returns to Government in the upcoming election. A Labor Government, however, may be more inclined to implement reforms,” Bratter says.

Rolling in the green

With a growing number of doctors, specialists or otherwise, seeking to prescribe cannabis, someone has to grow all that green.

Cannabis farmers are on the rise in Australia, largely thanks to state and local government interest in job creation.

Back in 2016 Victoria became the first state to legalise medicinal cannabis and has been investing since, attracting $30 million in investment earlier this year from Canadian company Cannatrek to expand production and manufacturing locally.

“Go back a couple of years and this industry didn’t exist,” Andrews said of the investment in January.

“We built it from scratch – because the sick kids who rely on medicinal cannabis are counting on us, and we won’t let them down.”

Meanwhile, NSW is also attracting investment, with ASX-listed Elixinol Global Limited making a $7 million application for a cannabis farm earlier this month.

In Queensland, international business Asterion Cannabis is trying to set up a $10 million growing facility on the outskirts of Toowoomba.

Getting into the supply side of Australia’s medicinal cannabis industry isn’t easy though, the Office of Drug Control is responsible for reviewing applications for licenses and is notoriously strict.

Miller says he’s worked with companies who have had to wait for over a year to receive approval for growing facilities, which has stifled early growth in the industry.

“We’re still a few years off from seeing a fully operational and systemised medicinal cannabis industry in Australia,” he says.

Retail: The cannabis clinic?

However, as new players enter the market, supply risks becoming saturated. As that happens, Miller says distribution is becoming a bottleneck in the industry.

Over the last decade the so-called “cannabis clinic” became common fare in many American states with medicinal cannabis laws, combining doctors specialising in prescribing the drug with dispensaries selling products.

Locally, big pharmacies are already getting on board. In January Priceline owner Australian Pharmaceutical Industries (API) inked a supply deal with cannabis drug developer MedLab Clinical to range nutraceuticals.

Chemist Warehouse got stuck in last November, doing a deal with Bod Australia to add cannabis oil to its shelves.

But cannabis products are still prescription only in Australia and will be for the foreseeable future, so pharmacies are going to be the only places where retail is viable.

That’s good news for existing pharmacies, but those trying to get into the industry should proceed with caution, as it’s unlikely cannabis alone can support a business, unlike in other markets around the world.

Products: The big opportunity?

The availability of cannabis products in Australia remains limited and is currently dominated by cannabis oils and tinctures.

While doctors are unlikely to prescribe smoking or vaping cannabis anytime soon, product innovation in the industry is expected to drive business opportunities in the coming years.

Overseas cannabis products in the form of edibles have become popular, while there are plenty of accessories businesses making money off the trade, legal or otherwise, indirectly.

Speaking of legalisation, how likely is that in Australia?

While politicians in the ACT are already debating a form of decriminalisation, such a move would likely be blocked by the federal government.

The push for legalisation or decriminalisation is gaining political momentum, but there are a wide variety of international agreements and laws Australia is party to which would preclude legalisation.

Internationally, Australia’s neighbour New Zealand is gearing up for a referendum on recreational cannabis in 2020, while Canada legalised the drug for recreational use last year.

There’s often a line drawn between the prevalence of medicinal cannabis and eventual recreational legalisation, but Miller urges caution.

“If we do get adult use we will lose critical data that will help us understand how cannabis works as a medical treatment,” he says.

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The big bong: How Jim Kouts turned Off Ya Tree into a $30 million business

Dominic Powell /

Off Ya Tree

Thendro founder Jim Kouts. Source: Supplied.

In the late-70s in a quiet store on Melbourne’s Sydney Road, Jim Kouts’ music business wasn’t doing too well, failing to strike a chord with shoppers in the city’s developing inner north.

So like any good business owner, Kouts introduced a new product range in the hopes of enticing a few more customers through his doors.

But instead of investing in some fresh racks of wax or some sparkling new synths, Kouts etched out a corner of his store dedicated to selling the main thing a 70s teenager needed: bongs.

“The bongs were doing a lot better than the music side of things, and in the end, I gave up on the music and just pursued the bong side of the business,” Kouts tells SmartCompany.

“That grew, so I opened a stall in Vic Market as well, then we opened other stores, started manufacturing, and took on partners and turned it into what it is today.”

What it is today is officially called Thendro — but the business is more commonly known by its two pioneering brands Off Ya Tree and The Bong Shop, which are Australia’s leading suppliers of smoking paraphernalia.

Kouts operates about 25 Off Ya Tree stores across the country and runs The Bong Shop online out of its Canberra headquarters. And while the nation’s capital might seem like a strange place for a bong store’s home base, Kouts explains it’s one of the few places in Australia he can run it.

“Canberra is one of the last places in Australia where bongs are legal. When we started in 1978, bongs were legal everywhere in Australia but over the years legislation has come in state by state,” he says.

After the bans rolled through, Kouts said he had all but given up on bong side of his business, however, the advent of e-commerce has allowed The Bong Shop to thrive online.

Bongs banned by big tech

This legislation has seen bongs in other states sold as ‘water pourers’ and other obtuse glass objects. It has also been a regular pain point for Kouts and his business, though the SME owner proudly declares he has always complied with all legislation to the absolute letter.

But that doesn’t stop him from describing the changes as a “tidal wave” — one which has forced Thendro to bend over backwards to comply with authorities and resulted in regular discrimination against the business from banks, marketplaces and payment providers.

“I have enjoyed running the business but it’s always been a challenge. I think as a country we’ve got the whole cannabis and bong situation back to front. We’re way behind where we should be with this  we’ve got blinkers on,” he says.

“At every turn of the road we have been discriminated against because of the industry that we’re in. That’s occurred with banks, it’s occurred with real estate agents, it’s occurred with every type of business.”

This means Thendro has been refused business loans and leases on new offices. Kouts recalls one major snub by a big four bank, which occurred at the 11th hour after the business had moved over its entire portfolio of accounts from a different bank.

“We got right to the last stage where we were signing our letters of offer and they said there was a problem and they were going to restrict us in every way they could,” he says.

“There’s a fair bit of discrimination and stigma about the business.”

Kouts also lists eBay, Afterpay, Zip Pay, Paypal, Instagram, Facebook and Google as some of the companies who refuse to allow Thendro to use their services.

Cannabis legalisation “common sense”

Thendro and its subsidiaries, which include an online vaporiser shop and a tattooing and piercing business, are no small fry either, with the business turning over approximately $30 million a year.

The business’ growth has been cyclic, says Kouts, having some low points in recent years. However the business is on the up currently, and looking to the future the founder is hopeful for growth — as long as recreational cannabis legalisation is on the cards.

Kouts holds strong views about the legalisation of recreational cannabis, and while he’s welcoming of advancements in the medicinal space, recreational legislation has remained almost entirely stagnant.

“It’s common sense on what should be acceptable and what should not be. Alcohol is legal in Australia, and if we draw the line there, anything worse than alcohol should be illegal, and anything below it should be legal,” he says.

“Cannabis is so far below alcohol. People love to enjoy a nice glass of Shiraz, but those same people say no one should be able to have cannabis.”

“If I’m a diabetic, a glass of scotch can kill me, but I could still enjoy a joint. Why are we discriminating against their right to enjoy themselves?”

With the Australian Greens being the only party currently with proactive legislation to legalise cannabis, Kouts is gloomy on prospects of legalised weed in the near future, claiming many parliamentarians still lump cannabis in with illicit hard drugs such as ice and heroin.

But if that legislation does come, Thendro will be first in line for a distributing and growers license, with Kouts sanguine about his business’ overall future.

“Our brand has been around for 40-odd years, we’ve quite big, and we’re very visible.”

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Cannabis “cowboys” could cause industry downfall or government crackdown, warns Medlab chief executive

Dominic Powell /

Medlab

Medlab chief executive officer Sean Hall. Source: Supplied.

The founder and chief executive of one of Australia’s pioneering medicinal cannabis companies has called for caution in the industry, warning off aspiring entrepreneurs who are looking to make a quick buck.

The company, Medlab, and its chief executive Sean Hall have been working in the medicinal cannabis and nutraceuticals space since 2012, being the first Australian company to be granted a license to run medicinal cannabis trials in the country.

Currently, his business is in the process of trialling a number of products containing Cannabidiol (the chemical form of cannabis), one focusing on pain reduction for cancer patients, and the other to treat seizures and chemo-induced nausea and vomiting.

Hall tells SmartCompany one of the number one areas he sees medicinal cannabis have real benefits in is the pain-treatment space, referring to the over-prescription of opioids such as Codeine and OxyContin as why alternative treatment methods are necessary.

“I’ve been in the pharma industry for a long time, and I’ve seen opioids rise for close to three decades relatively unchallenged as the standard for pain management,” Hall says.

“More and more are being prescribed for less and less reason, largely because pain itself is so subjective.”

Cannabis can provide a solution for patients where they are experiencing intractable pain, which is pain that is constant and excruciating, and can lead to depression and can reduce food intake. Additionally, the drug provides an alternative for patients where opioids either fail to work, or produce severe side effects.

Knowing this, Hall says it was a “one plus one equals two” moment, seeing the market opportunity for a company like Medlab to move into. Alongside its cannabis-related work, the company also produces a range of nutraceuticals and pharmaceuticals with a focus on treating chronic diseases.

However, when the company listed in 2015, its cannabis-related trials were its lead products, and Hall says its an area he wanted to focus on from the get-go.

“We talk about Medlab as being an ethical stock, doing something that enhances human life. There’s no silly science, we do see ourselves in a different sector to a lot of other ‘pot stocks’,” he says.

Caution called for

It’s in that ‘pot stock’ space, a colloquial term for listed companies working in the cannabis industry, where Hall is a rare voice of caution. Coming from a pharmaceutical background, Hall has seen the risks of jumping on a new drug solution too quickly and only realising the risks 10 years down the track.

“We as a species have been too quick historically to jump on something, only to realise the side effects 10 years down the track. Opioids were a godsend in the 80s, now they’re the devil. Antibiotics have saved millions, but now we’re struggling to deal with superbugs which are totally antibiotic resistant,” he says.

“So while we’re quick to adopt, we’re slower to think about the future. But I recognise that’s hard for a lot of people when we’re talking about sick relatives.”

Hall also raises caution on the societal ripple effects of full legalisation of cannabis, and the risks of many patients self-diagnosing for cannabis treatment when they may not strictly need the drug.

medicinal cannabis

The cannabis plant.

With this in mind, he urges anyone considering participating in the cannabis industry, either in the research, growing or pharmaceutical space, to do their research and to not be a money-chasing “cowboy”.

“It’s a double-edged sword, as we want more people to get involved so to drive awareness, but we also want to temper that involvement so we don’t have people pushing alternative schools of thought and singing about the fact they’re going to make billions,” he says.

“Caution is what I promote, in favour of people doing some research, bonafide research which can collectively aid the industry.”

Asked what he’d recommend to any business owner looking to make a start in the cannabis industry in Australia, Hall says he’d first congratulate them for making the move into “uncharted waters”, but would question their motives.

“It’s a big risk, so if they’re doing it because they want to make money, well, you can make money flipping pizzas,” he says.

“If they’ve got something unique to do and they want to prove it, I’d take my hat off to them.”

“If they want to grow it in their backyard and make a buck, I’d raise my eyebrows.”

The cannabis crystal ball

Looking into his “crystal ball” on the future of the cannabis industry in Australia, the founder says decriminalisation will lead to one certainty in the market: a race to the bottom on price.

“When everyone is selling, the only outcome is a race to the bottom. You’re playing generics, all you have is the colour of your label and your price,” he says.

When this happens, Hall says the outcome he’s most concerned about are sellers stepping over the line, promoting health claims on their products which aren’t approved by the Therapeutic Goods Administration, Australia’s drug authority.

“Once you do that you’ve broken federal law, and then there’s got to be a government reaction. That’s the macro effect of these issues, and that could change the landscape,” he says.

“Businesses need to have innovation and safety in mind.”

“It’s not for the faint of heart it takes a lot of time, conflict and energy. But if it was easy, everyone would do it.”

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“A global phenomenon”: Australia’s cannabis industry is already booming, and here’s how startups can get on board

Dominic Powell /

Australian cannabis market

Australian entrepreneur and industry expert Saul Kaye. Source: Supplied.

Despite “strong” stigma locally, opportunities are aplenty for founders wanting to take advantage of the fast-growing cannabis market according to Australian entrepreneur and industry expert Saul Kaye.

But if startups want to see success, they’ll need to look beyond the “low-hanging fruit” and devise a way to best integrate their existing expertise into the market, rather than diving into something they have no experience in.

These nugs of wisdom come from a founder who’s spent the last five years in Israel, building out his pharmaceutical cannabis brand iCAN and running international cannabis technology conference CannaTech.

Speaking to StartupSmart, Kaye says after operating as a pharmacist in Israel for a number of years he began to see the benefits medicinal cannabis could have on patients and started to pursue it as an area of expertise.

Kaye quickly grew his number of patients from 12,000 to well over 40,000, and says his success in the industry is due to being in “the right place at the right time”.

“I started to see it blow up everywhere, and now it’s a global phenomenon. The cat’s out of the bag, and not only is it treating a number of different diseases, but there’s also great economic benefits to both medicalisation and legalisation,” he says.

With countries across the world waking up to the benefits of medicalised or even legalised marijuana, the industry has boomed and is currently the fastest growing market in the world according to Kaye.

However, in Australia opinions towards cannabis are still sour, with both sides of government reluctant to roll out cannabis-friendly policy for either medical or recreational use. The only party with any sway pushing for legalisation is the Greens.

On a state-by-state basis, things are different, with places such as Victoria and New South Wales taking progressive steps to increase the use of medicinal cannabis products.

Despite this, access to medicinal cannabis products is stymied in Australia, with the drugs having to be obtained through the Therapeutic Goods Administration via a specific access scheme, and are not subsidised through the PBS.

Kaye says this means patients are able to get their hands on medicinal cannabis products, but with limited access. He also says many doctors and pharmacists are not trained to prescribe the products.

“There are maybe 1,000 patients across Australia getting material imported from places like Canada through these programs,” he says.

Industry no smoke and mirrors

Though the current situation is somewhat bleak, Kaye says he sees a path to widespread use and potential legalisation in the next two years once the supply chains sort themselves out. At that point, he expects about 3% of Australia’s population to be using medicinal cannabis.

“That’s a significant number, it could be hundreds of thousands of patients, and the economy behind that makes a lot of sense,” he says.

For companies looking to get on board, Kaye picks cannabis growing as the “lowest-hanging fruit” and also one of the more expensive and difficult thanks to the need for greenhouses and agricultural experience.

He views cannabis processing as a strong area for growth, such as creating cannabis products and product categories, along with being a distributor of cannabis or cannabis-related products.

And while many founders might be inclined to wait until firm legislation is passed on cannabis before striking up a venture, Kaye disagrees, saying the industry is already here.

“The industry is here and happening, and there’s significant pivot potential for a lot of companies. Think about if you have a piece of tech that can solve a problem in the cannabis industry, something that exists and can you can apply to a new value chain,” he says.

“It’s also all about connections because you won’t know if your idea is great without talking to someone with deep experience in the industry.”

“It’s about where you add value to cannabis, not how cannabis adds value to you.”

NOW READ: How Sean Dollinger built a billion-dollar business in three years in a quest to become the ‘Amazon’ of cannabis

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How Sean Dollinger built a billion-dollar business in three years in a quest to become the ‘Amazon’ of cannabis

Dominic Powell /

Namaste Technologies

Founder of Namaste Technologies Sean Dollinger. Source: Supplied.

Founder of Namaste Technologies Sean Dollinger always made it his business to find success in niche markets. First, it was with a mobile phone reception company, then a coal-fired pizza business.

Now it’s with a billion-dollar soon-to-be-NASDAQ-listed online vaporiser and cannabis retailer.

For many Australians, the concept of legalised or even semi-legalised cannabis is entirely foreign, meaning the vast majority of Dollinger’s business will be too. Vaporisers (or vapes, as they’re usually known) aren’t exactly used widely either, with various legal barriers existing in some states which prevent the free uses of vapes in public spaces.

For those out of the loop, here’s the run-down: Canadian entrepreneur Dollinger founded Namaste Technologies in 2014, starting out as an online retailer focused on selling vaporisers and associated vape accoutrements.

Vaporisers are widely used in Australia as an alternative to smoking cigarettes, with the device vaporising liquid nicotine to give smokers their hit. Vapes can also be used without nicotine oil, sometimes just with pleasant tasting vape juice or, more commonly, cannabis oil in countries where recreational or medicinal cannabis use is legalised.

“Four years ago I was travelling in Israel, and a retailer there was speaking to me about rolling papers and the success he was having selling those. Fast forward about four weeks later and I was with my father in Laguna Beach, and he showed me a vaporiser,” Dollinger tells StartupSmart.

“At that point, 14 years of e-commerce experience clicked, and I started a side business selling vaporisers online. We very quickly went from a couple hundred to a few thousand kinds of vaporisers.”

Dollinger says in the business’ early days, he fielded an offer to be acquired for a few hundred thousand dollars. It was a deal he was planning to accept before a friend told him it was crazy, and suggested the business go public instead.

So he did. Dollinger floated Namaste Technologies in March of 2016 and closed the initial public offering with a market capitalisation of $CAD6 million ($6.3 million). Yesterday, Namaste finished trading with a market cap of $CAD1.03 billion — an extraordinary rise in just two-and-a-half years.

The Uber, or Amazon, for cannabis

At the time of speaking to StartupSmart, Dollinger had just recently finished celebrating Namaste’s official induction into the billion-dollar valuation club, hosting an event with none other than hip-hop god and cannabis advocate Snoop Dogg.

Not only was the party amazing, but so too was the journey to reaching that coveted valuation, which Dollinger says hasn’t been made easy due to constant attacks from short-sellers.

While much of Namaste’s core business has remained in the international sales of vaporiser and cannabis accessories, the business has made a concerted push in recent times into the retailing of marijuana itself, aided by the acquisition of Cannmart, an online marketplace for medical cannabis, in 2017.

The company has also developed a new platform known as NamasteMD, which allows Canadian customers to be prescribed medicinal cannabis via a telemedicine portal, and delivered that prescription on the same day, provided they are close enough to the warehouse.

These developments have set a goal for Dollinger and his company to become the Amazon of medical marijuana, providing not just vaporisers and cannabis accessories to shoppers, but the actual product itself.

“We’ve always tried to stay in front of the curve as the industry emerges and more competition starts to crop up. We want to be the provider for all cannabis users in countries where it’s legal,” he says.

“If you told me two years ago we had the opportunity to be the largest online cannabis company in the world I would have told you you’re crazy.

“We want to be the one-stop shop for everything cannabis.”

Australia on the way to legalisation

Surprisingly, this one-stop-shop will also make a home Down Under, as Namaste already has a presence in Australia through two online vaporiser stores: NamasteVapes.com.au and Australian Vaporisers.

Dollinger says Namaste is well-poised to take advantage of growth in the medicinal cannabis market in Australia, but there’s a way to go yet in terms of both legislation and public perception.

“If you go into the room and start talking about cannabis people will look at you sideways, even in somewhere like Australia which is full of educated people,” he says.

“But those people will still call it the ‘devil’s weed’, which it’s not. It’s a product that’s proven to be helpful, healthy, and medicinal.”

Despite these perceptions, Dollinger says Namaste still has over half a million Australian customers for its products. He thinks the country is sitting where Canada was a few years ago in terms of softening of attitudes towards legalisation and medicinal cannabis use.

“We’re positioning ourselves for a future in Australia, and I think the industry is all about timing. If you look at Namaste and when we went public, we could not have timed it any better,” he says.

For other companies in Australia hoping to get in on the cannabis industry, Dollinger has a number of key pieces of advice, the first of which is never underestimate the amount of capital you’ll need to get started.

“You’ll need to have very deep pockets. Don’t underestimate how much capital is needed, and you’ll need to have a plan to grow sustainably as buyers fall in love with the product,” he says.

“Also make sure you’re making at least 50% gross margin on your product, otherwise you’re going to find it extremely hard.”

But more generally, for startups looking for new niche markets to go into, Dollinger warns against going into the cannabis growing space, even in Australia. Instead, he urges startups to think outside the box.

“There’s plenty of people growing, so try and think of the added value you can bring to people and where you can have a specialty. I don’t encourage getting into the growing side — it’s called weed for a reason because it grows like one,” he laughs.

“I think there’s a big opportunity in home-grow kits, developing a turnkey solution for growing at home along with finding ways to get people cannabis pre-rolled once it’s legalised.”

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