Australia Cannabis & Products Market- Trend Analysis & Forecast

Market/ Product Overview

The regulated cannabis industry in Australia formally began in 2016 with the legalization of medicinal cannabis. By 2024, the market had expanded significantly and the legal cannabis market values at about US$ ** million in 2024. Notably, the patient base has rapidly grown: over 80,000 prescriptions are reportedly issued each month, serving over one million Australians. As of early 2025, more than ** million medicinal cannabis product units were sold in the first half of the year alone, up from ** million in the second half of 2023.

The growth has not only been in sales volume but also in product diversification. Early Australian cannabis consumption largely focused on oils and tinctures, but demand has shifted decisively toward dried flower and high-THC formulations, reflecting patient preference for faster onset of relief and conditions like chronic pain, anxiety, and insomnia. Domestic cultivation is also scaling up sharply: total production increased from around ** kg in 2022 to over ** kg by 2024, indicating significant investment and capacity-building by licensed producers. However, despite this upward trajectory, the market remains relatively small compared to mature North American cannabis economies — a dynamic that signals both opportunity and growing pains.

Significance of Australia in Global Cannabis & Products Supply Chain

Australia occupies a unique role in the global cannabis supply ecosystem. Its favorable climate, strong regulatory oversight, and growing GMP-certified production capabilities give it the potential to become a high-quality supplier of medicinal cannabis products for export markets, particularly in Asia-Pacific and Europe. Between 2021 and 2024, domestic production nearly doubled from ** tonnes to ** thousand tonnes annually, marking rapid capacity expansion.

Despite this growth, the country remains more of a consumer market than a global exporter: total imports under regulatory import licences rose sharply from roughly ** tonnes in 2021 to over ** tonnes by 2024. This reliance on imports — especially of genetics and certain high-demand strains — highlights that Australia has yet to fully leverage its cultivation potential. Nonetheless, its growing production volumes, stringent quality standards, and increasing regulatory clarity position Australia as a credible global supplier for medicinal-grade cannabis, potentially bridging supply gaps in other jurisdictions with stricter domestic limitations.

Moreover, as global demand for regulated, GMP-rated cannabis rises, Australian producers may find a competitive edge due to clean growing conditions, favourable climate, and stable regulatory frameworks. For global investors and pharmaceutical companies, Australia offers a relatively low-risk environment compared with markets still shadowed by regulatory uncertainty.

Australia Cannabis & Products Supply & Demand Trend

On the supply side, domestic production has accelerated rapidly. Licensed cultivators increased annual yield from around ** thousand kilograms in 2022 to over ** thousand kilograms in 2024. Stock inventories likewise rose, suggesting producers are building buffer capacity to meet growing demand. However, domestic supply still does not fully meet total demand: imports under permitted regimes continue, reaching 3.3 tonnes in 2024. Thus while local cultivation is scaling, Australia remains import-reliant, especially for certain strains and product forms.

Demand has surged in parallel. Monthly prescriptions now exceed 80,000, covering conditions ranging from chronic pain and epilepsy to anxiety and insomnia. In the first half of 2024 alone, nearly 2.9 million medicinal cannabis product units were sold nationally, indicating strong uptake. Consumption appears driven by patient preference for flower formats and high-THC products — a shift away from oils and tinctures. The rapid growth in demand has far outpaced production ramp-up, exerting pressure on supply chains, stimulating import activity, and incentivizing domestic expansion.

This supply–demand intersection has significant implications. On one hand, increasing production reduces reliance on international supply; on the other hand, the persistently strong demand and variety of patient needs ensure imports remain an important complement. The resulting dynamic — of rising supply, high demand, and product diversification — underpins the strong growth trajectory of the Australian cannabis market.

Australia Cannabis & Products Market Segmentation

The Australian cannabis market can be segmented by source (hemp vs marijuana), product type (Flowers/ Buds and Concentrates), derivative (CBD, THC, others), and application (medical, recreational (smoking & vaping, edibles & beverages, and cannabis-infused products), and Industrial).

By source, hemp-based products — especially CBD oils and supplements — currently dominate revenue share. The lighter regulatory burden on hemp-derived products and perceived lower risk profile make hemp a favorable starting point for many patients. Nevertheless, marijuana-derived products, particularly high-THC flower and formulations, are rapidly gaining market share due to increased demand for stronger therapeutic effects.

Within derivatives, CBD remains popular among patients seeking milder therapeutic effects or wellness applications, while THC-dominant products — especially dried flower — are preferred for more acute symptom relief such as chronic pain, sleep disorders, and anxiety. The trend in 2024–25 clearly tilts toward THC-based therapies, reflecting greater prescriber and patient confidence in stronger formulations.

In terms of product types, By type, the Australian cannabis market has shifted from a concentrates-heavy profile toward a clear dominance of flowers and buds, with dried flower now accounting for the bulk of prescribed products in many clinics. Other formats — such as edibles, topicals, and capsules — remain niche but are gradually gaining traction as patient demand diversifies.

By application, medical use remains the dominant segment in Australia, accounting for virtually all of the estimated US$ ** million regulated market value in 2024 and all of the ** million product units sold in the first half of that year. Medical products span chronic pain, epilepsy, anxiety, insomnia, cancer-related symptoms and palliative care, with these indications together driving prescriptions above 80,000 per month and supporting rapid growth in both flower and oil-based formats. Recreational demand, while still largely channelled through illicit or grey markets, exerts a powerful indirect influence, with consumer familiarity with smoking and vaping encouraging uptake of legal high-THC flowers and vaporisable products as legal frameworks evolve. Industrial applications, anchored in hemp fibre, seeds and CBD ingredients for food, cosmetics and wellness products, represent a smaller share but are growing in value as domestic hemp cultivation rides the same infrastructure wave that pushed total cannabis production to more than ** thousand kg in 2024 and encouraged investment in large-scale farming, processing and extraction assets.

From a sales perspective, Australia is still overwhelmingly a domestic market, with local consumption absorbing the majority of the roughly US$ ** million in annual market value and most of the ** million medicinal units sold in the first half of 2024. Exports, while growing, remain modest: licensed shipments of medicinal-grade cannabis flower and oils are estimated in the low single-digit tonnes per year, serving markets such as New Zealand and select European countries and representing a small fraction of total Australian output.

Australia Cannabis & Products Trade (Export & Import) Trend

Australia’s cannabis trade dynamics remain complex and skewed toward import reliance despite rising domestic production. For instance, between 2021 and 2024, domestic production increased substantially — up from about ** thousand kg in 2022 to more than ** thousand kg in 2024 — indicating growing cultivation capabilities. However, imports under permit regimes also increased notably from roughly ** tonnes in 2021 to over ** tonnes in 2024, underscoring persistent dependence on foreign supply to meet demand, especially for specialized genetics and product formats not yet produced domestically.

Exports remain modest in comparison. From 2021 to 2024, Australia’s recorded export volumes rose from ** tonnes to about ** tonnes. Major destinations include nearby markets such as New Zealand, as well as European countries such as Germany, reflecting an emerging but limited role in the global cannabis export market. Nonetheless, these export volumes remain small relative to domestic consumption, meaning Australia currently functions primarily as a net consumer.

Tariffs and import regulations — governed by national drug control authorities — shape trade flows. Australia maintains strict regulatory oversight over both imports and exports via licensing regimes; this regulatory clarity supports legitimacy but can also slow supply chain responsiveness, especially when foreign suppliers face regulatory changes. As domestic production grows and product diversification increases, Australia could gradually reduce import reliance. Over time, increasing export volumes, especially of GMP-certified medicinal-grade cannabis, could strengthen Australia’s role in the global cannabis value chain.

Influence of Australia in Global Cannabis & Products Price

Because Australia remains primarily a domestic consumption market with limited export volume, its influence on global cannabis price setting remains modest. However, the dynamics within the domestic market offer important signals. The fall of retail flower prices to AUD 3.30 per gram by mid-2025 — driven by oversupply and increased competition — illustrates how increased cultivation and supply oversupply can exert downward pressure on price.

This domestic price decline may exert indirect influence on global pricing strategies, particularly among wholesale exporters targeting Australia as a market. Lower domestic prices can incentivize foreign suppliers to reduce export prices or offer discounts to remain competitive. On the flip side, as Australian cultivation scales and domestic supply rises, reliance on imported flower and concentrates may decline, reducing demand for higher-priced imports — which could lead global suppliers to re-evaluate pricing in response to falling Australian demand.

Moreover, increased production and falling prices could incentivize scale production, which might drive global oversupply, especially if Australian producers enter export markets. If that occurs, global wholesale prices may come under downward pressure. For now, though, Australia’s export volumes remain too small to exert significant global pricing power; but domestically the trend is clear — increased supply, competitive pricing, and downward pressure on retail/wholesale costs.

Future Outlook

Looking ahead to 2032, the Australian legal cannabis market appears poised for significant expansion. Based on current growth rates and increasing domestic production capacity, a conservative forecast would place the size of the market (medical + legal products) in the range of US$ ** million by 2032. This estimate reflects expected continuation of regulatory support, growing patient adoption, product diversification, and increased domestic cultivation reducing import reliance.

If favorable policy reforms continue, prescriber acceptance deepens, and product formats continue to expand — including possible OTC or wellness-oriented products — the upper end of this forecast may be exceeded. Under a more optimistic scenario, assuming continued CAGR above 20% and expansion into export markets, the Australian cannabis sector could exceed US$ ** billion by 2032, positioning it as a substantial regional hub in the Asia-Pacific medicinal cannabis ecosystem.

Overall, while price pressure and regulatory scrutiny remain challenges, the convergence of rising patient demand, expanded supply, and increasing domestic capacity sets the stage for robust, sustained growth. For investors, policymakers, and industry stakeholders, the next 5–7 years may present strategic opportunities to shape Australia’s cannabis landscape and integrate it more deeply into global supply chains.