Australia Legal Cannabis Market By Source (Hemp, Marijuana), By Derivatives (CBD, THC, Others), By Cultivation (Indoor Cultivation, Greenhouse Cultivation, Outdoor Cultivation), By End Use (Industrial Use, Medical Use, Recreational Use), By Region and Competition, Forecast & Opportunities, 2020-2030F

Market Overview

Australia Legal Cannabis Market was valued at USD 126.32 Million in 2024 and is expected to reach USD 420.33 Million by 2030 with a CAGR of 22.16%. The Australia Legal Cannabis Market is witnessing strong growth momentum, supported by evolving legislation, increased awareness of therapeutic cannabis applications, and expanding patient access schemes. The federal government’s ongoing reforms, combined with state-level regulatory clarity, are accelerating the development of a structured and transparent cannabis industry. Medical cannabis prescriptions have increased significantly due to the growing acceptance of cannabis as a treatment for chronic pain, anxiety, sleep disorders, and other health conditions. Local production is rising steadily as companies invest in cultivation and manufacturing facilities to reduce dependence on imports and improve supply chain resilience. Rising support from healthcare practitioners, coupled with an increase in clinical research and training, is further encouraging uptake across various therapeutic areas.

A notable trend in the Australian cannabis market is the shift towards diversified product offerings, including oils, capsules, topicals, and edibles designed for medical use. Patients and physicians are showing a preference for standardized, dose-controlled formats that offer consistency and ease of administration. Technological innovation in cannabis extraction and formulation is driving the development of pharmaceutical-grade products that align with regulatory standards and medical expectations. The emergence of telehealth services and digital prescribing platforms is improving patient access, particularly in rural and underserved areas. Cross-border partnerships and export agreements are positioning Australia as a regional hub for cannabis manufacturing and distribution, especially in Asia-Pacific markets.

Despite positive growth prospects, several challenges continue to affect the market's full potential. Regulatory complexity and inconsistent policy implementation across states create operational inefficiencies for cannabis businesses. High production and compliance costs, coupled with limited insurance coverage for cannabis-based therapies, are restricting access for lower-income patients. There is still a need for broader education among healthcare professionals to dispel stigma and increase confidence in prescribing cannabis. Supply-demand imbalances, caused by licensing delays and strict quality control requirements, can result in shortages or overstock scenarios. Addressing these challenges through harmonized policies, clearer guidelines, and investment in education and infrastructure will be essential to sustain market growth in the long term.

Key Market Drivers

Favorable Regulatory Environment and Policy Support

A favorable regulatory environment and robust policy support are pivotal drivers propelling the growth of the Australia Legal Cannabis Market. Since the legalization of medicinal cannabis in 2016, the Australian government has established a comprehensive legal framework that permits the cultivation, manufacturing, and distribution of medical cannabis under stringent conditions. Regulatory bodies such as the Therapeutic Goods Administration (TGA) and the Office of Drug Control (ODC) have implemented policies facilitating patient access to cannabis products through mechanisms like the Special Access Scheme (SAS) and Authorised Prescriber Scheme. These pathways empower healthcare practitioners to prescribe cannabis-based therapies for patients with specific medical conditions when conventional treatments have proven ineffective, ensuring legal and safe access to cannabis treatments while maintaining regulatory compliance.

Recent policy developments, including the down-scheduling of low-dose cannabidiol (CBD) to Schedule 3 status, indicate a progressive regulatory stance supporting broader access to cannabis-derived products. Although no over-the-counter CBD products have yet achieved market approval, this reclassification signifies an intent to ease restrictions on non-psychoactive cannabis applications. Such regulatory advancements are fostering investor confidence, encouraging pharmaceutical innovation, and attracting foreign companies seeking to operate within a well-regulated and scalable market. Australia's commitment to pharmaceutical-grade standards and its export-friendly framework further enhance its reputation as a global cannabis hub.

The impact of these regulatory measures is evident in the market's rapid expansion. According to the Penington Institute, Australians are projected to spend over USD 1 billion on medicinal cannabis in 2024, a significant increase from USD 235 million in 2022. In the first half of 2024 alone, more than 2.87 million medicinal cannabis products were sold, up from 1.68 million in the second half of 2023. Furthermore, data indicates that over 2.2 million prescriptions for medicinal cannabis have been issued since legalization, with 571,319 prescriptions recorded in 2024. This substantial growth underscores the effectiveness of Australia's regulatory framework in facilitating market development.

The combination of legislative clarity, government oversight, and an evolving policy outlook has created an environment conducive to growth and long-term sustainability. These supportive regulations not only safeguard consumer safety and product quality but also stimulate clinical research, product diversification, and new business formation. The government's balanced approach of encouraging innovation while maintaining strict safety controls positions the legal cannabis sector as one of the most promising emerging industries in Australia's healthcare and agribusiness landscapes. This regulatory momentum is expected to sustain and strengthen the market's upward trajectory in the coming years

Growing Acceptance Among Healthcare Professionals and Patients

Growing acceptance among healthcare professionals and patients is playing a pivotal role in driving the expansion of the Australia legal cannabis market. As clinical evidence supporting the therapeutic benefits of cannabis continues to accumulate, an increasing number of doctors are integrating cannabis-based treatments into their practice. Medical practitioners are becoming more comfortable prescribing cannabis products for conditions such as chronic pain, epilepsy, anxiety, sleep disorders, and cancer-related symptoms. This shift is being supported by educational initiatives and training programs that aim to enhance physicians' understanding of cannabis pharmacology, dosing, and patient outcomes. Greater prescriber confidence is, in turn, leading to higher patient awareness and willingness to explore cannabis as a legitimate treatment option.

Patients are also becoming more proactive in seeking natural and plant-based alternatives to conventional pharmaceuticals, particularly in cases where traditional treatments have failed or caused adverse effects. Cannabis offers a promising alternative with a favorable safety profile and customizable formulations that can be tailored to individual therapeutic needs. The legal framework in Australia, including access through the Special Access Scheme and Authorised Prescriber pathways, has made medical cannabis more accessible to eligible patients, enhancing its credibility as a mainstream treatment option.

The growing patient demand, supported by an expanding network of prescribers and increasing clinical validation, is encouraging market players to invest in product development and distribution infrastructure. This is contributing to the normalization of cannabis use within the healthcare ecosystem, reducing stigma, and promoting broader integration into treatment protocols. As the number of both prescribers and patients continues to rise, supported by improved accessibility and education, the legal cannabis market in Australia is expected to witness sustained growth. This expanding acceptance is laying the foundation for long-term industry development and is reshaping the perception of cannabis from a restricted substance to a valuable medical solution.

Rising Investment in Cultivation, Manufacturing, and R&D

Rising investment in cultivation, manufacturing, and research and development (R&D) is a significant driver propelling the growth of the Australia Legal Cannabis Market. In 2023, Australia produced 26,593 kilograms of medicinal cannabis, a notable increase from 24,900 kilograms in 2022. This growth reflects substantial investments in state-of-the-art cultivation facilities adhering to pharmaceutical-grade standards. These investments focus on enhancing yield, improving product quality, and ensuring consistency, which are crucial for gaining regulatory approval and building trust among healthcare providers and patients. Advanced cultivation technologies, such as controlled environment agriculture and automated processing systems, allow producers to optimize cannabinoid profiles and meet the growing demand for diverse cannabis-based products.

On the manufacturing front, companies are expanding their capabilities to produce a wide range of cannabis derivatives, including oils, capsules, soft gels, topicals, and novel delivery systems. Investments in Good Manufacturing Practice (GMP)-compliant manufacturing facilities ensure that products meet rigorous quality and safety standards required for medical use and export. The availability of pharmaceutical-grade products has boosted confidence among prescribers and patients, contributing to market expansion.

Investment in R&D is accelerating innovation by facilitating clinical trials, pharmacological studies, and product development tailored to specific medical conditions. Collaborations between cannabis companies, universities, and research institutions are increasing, generating valuable scientific data that supports regulatory submissions and market acceptance. Research efforts focus on exploring new cannabinoid combinations, dosage forms, and therapeutic indications, paving the way for evidence-based cannabis therapies.

This wave of investment not only strengthens Australia’s position as a producer of high-quality cannabis products but also enhances its competitiveness in the global market. By advancing cultivation techniques, manufacturing capabilities, and scientific research, the industry is creating a robust foundation for sustainable growth and international expansion. This surge in capital allocation is a core catalyst driving the evolution and dynamism of the Australian legal cannabis sector.

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Key Market Challenges

High Costs of Production and Patient Access

High costs of production and limited patient access present significant challenges for the Australia Legal Cannabis Market. Cultivating cannabis to pharmaceutical-grade standards requires substantial investment in specialized facilities, advanced cultivation technologies, and stringent quality control measures. These rigorous requirements ensure product consistency, safety, and regulatory compliance but also drive up operational expenses. The cost-intensive nature of growing, processing, and manufacturing cannabis products translates into higher retail prices, which often restrict affordability for patients. Since medical cannabis is not subsidized under Australia’s Pharmaceutical Benefits Scheme (PBS), patients bear the full cost, making treatment inaccessible to many, especially those with chronic conditions who require long-term therapy.

Limited insurance coverage compounds this issue, as most health plans do not cover cannabis-based medicines, forcing patients to rely on out-of-pocket payments. High costs discourage widespread adoption and create a barrier to entry for new patients seeking alternative therapies. The financial burden is particularly impactful in regional and low-income communities where healthcare expenses are a major concern. This situation also slows the market's growth potential, as affordability remains a critical factor influencing consumer behavior and physician prescribing practices.

The complexity of the regulatory environment adds another layer to patient access challenges. Navigating the Special Access Scheme and securing prescriptions through authorized clinicians can be time-consuming and confusing for patients. Limited awareness and education among healthcare providers regarding medical cannabis benefits and prescribing protocols further restrict access, as many practitioners remain cautious or unfamiliar with treatment options. Collectively, these production costs and access barriers limit the market’s ability to reach its full potential, hindering patient outcomes and industry expansion in the coming years.

Limited Clinical Research Data

Limited clinical research data remains a significant challenge for the Australia Legal Cannabis Market, impacting the widespread adoption and integration of cannabis-based therapies into mainstream healthcare. Despite increasing interest in the therapeutic potential of cannabinoids, the lack of extensive, high-quality clinical trials has created uncertainty among healthcare professionals regarding appropriate dosing, efficacy, and long-term safety. This gap in robust scientific evidence contributes to cautious prescribing behaviors, as many physicians prefer to rely on treatments backed by well-established research protocols. The absence of standardized clinical guidelines for cannabis use also complicates the decision-making process for clinicians, making it difficult to tailor treatments to individual patient needs with confidence.

Regulatory agencies and funding bodies have historically allocated limited resources toward cannabis research due to legal restrictions and the stigma associated with the plant. As a result, many existing studies suffer from small sample sizes, short durations, or methodological limitations that hinder conclusive findings. This scarcity of comprehensive data impedes the development of consensus on the medical benefits and risks of cannabis products, affecting patient access and acceptance. Patients may face inconsistent treatment outcomes or experience uncertainty about potential side effects, which undermines trust in medical cannabis as a viable therapy.

Pharmaceutical companies and researchers are now increasingly investing in clinical trials to fill these knowledge gaps, but progress is gradual and often slowed by regulatory hurdles and high research costs. Greater collaboration between government, academia, and industry stakeholders is needed to accelerate the generation of reliable data. Until such evidence becomes widely available, the limited clinical research data will continue to pose a barrier to the full integration of cannabis therapies into Australia’s healthcare system, slowing market growth and the expansion of patient access.

Key Market Trends

Surge in Demand for Low-Dose CBD and OTC Access

The Australia Legal Cannabis Market is witnessing a significant surge in demand for low-dose cannabidiol (CBD) products, driven by growing consumer interest in accessible wellness solutions and the evolving regulatory landscape. The Therapeutic Goods Administration (TGA) took a pivotal step by rescheduling low-dose CBD (up to 150 mg per day) as a Schedule 3 substance, which allows for potential over-the-counter (OTC) access through pharmacies without the need for a prescription. This regulatory change marks a critical shift, making cannabis-derived products more accessible to a broader population seeking alternatives to traditional pharmaceuticals for conditions such as anxiety, sleep disorders, and mild pain management.

This shift reflects changing consumer preferences toward natural, plant-based remedies that are perceived as safer and less addictive. It also opens the door for increased product innovation, as companies work to develop standardized, clinically validated formulations that meet the TGA’s stringent safety and efficacy criteria. Several industry players are actively investing in clinical trials and research initiatives to secure approval for these OTC products, aiming to capture a growing segment of health-conscious consumers who prefer self-managed wellness options.

Pharmacies stand to benefit from this trend as well, with the potential to become primary distribution points for low-dose CBD products, further integrating cannabis into mainstream healthcare. The availability of OTC CBD also has the potential to reduce the stigma traditionally associated with cannabis use, as it becomes more normalized within everyday health and wellness routines.

As demand continues to rise, competition among manufacturers is intensifying, leading to a broader range of product formats, including oils, capsules, topicals, and beverages. This diversification caters to different consumer needs and preferences, driving sustained market growth. The surge in low-dose CBD and OTC accessibility is a transformative trend that promises to reshape the Australian cannabis market by expanding consumer reach and fostering greater acceptance.

Focus on Pharmaceutical-Grade Production and GMP Compliance

The Australian legal cannabis market is increasingly emphasizing pharmaceutical-grade production and adherence to Good Manufacturing Practice (GMP) standards, reflecting a commitment to quality and regulatory compliance. This focus is pivotal for ensuring product safety, consistency, and efficacy, which are essential for patient trust and international market access.

As of early 2024, Australia has seen significant advancements in GMP-certified facilities. Notably, Cannatrek's Shepparton facility in Victoria received GMP accreditation in September 2023, marking a substantial investment in both local employment and the nation's pharmaceutical manufacturing capabilities. Similarly, Clever Leaves achieved GMP certification from the Therapeutic Goods Administration (TGA) in January 2024, becoming the first medicinal cannabis company globally to hold GMP certifications from the EU, Colombia, Brazil, and Australia.

The Australian government's regulatory framework mandates that all medicinal cannabis products supplied to patients must meet stringent quality standards. The Therapeutic Goods Administration (TGA) enforces these standards through the Therapeutic Goods Order 93 (TGO 93), which sets out testing, labeling, and manufacturing requirements. This regulatory environment ensures that both domestic and imported cannabis products maintain high quality and safety standards.

In terms of market growth, the medicinal cannabis sector in Australia is experiencing a significant expansion. In the first half of 2024, Australians spent approximately USD 402 million on medicinal cannabis products, a substantial increase from USD 234 million in 2022. This surge in expenditure underscores the growing acceptance and demand for pharmaceutical-grade cannabis products.

The emphasis on GMP compliance and pharmaceutical-grade production positions Australia as a leader in the global cannabis industry, ensuring that products meet the highest standards of quality and safety.

Segmental Insights

Source Insights

Based on the Source, Marijuana emerged as the dominant segment in the Australia Legal Cannabis Market in 2024. This is driven by its widespread therapeutic use and higher concentration of cannabinoids such as THC and CBD, which are critical for treating a broad range of medical conditions. Marijuana-derived products are commonly prescribed for chronic pain, anxiety, insomnia, multiple sclerosis, and cancer-related symptoms, making them highly relevant across various patient demographics. The increasing recognition of its clinical effectiveness has led to broader acceptance among healthcare practitioners and patients alike. The regulatory landscape in Australia has become increasingly favorable toward marijuana-based medical treatments, with streamlined access pathways, a rise in authorized prescribers, and the growth of Special Access Schemes (SAS). These frameworks have facilitated increased patient uptake and greater demand for high-potency formulations typically derived from marijuana plants.

Derivatives Insights

Based on the Derivatives, CBD emerged as the dominant segment in the Australia Legal Cannabis Market in 2024. This is primarily due to its broad therapeutic applications, non-psychoactive nature, and increasing acceptance among both medical professionals and consumers. CBD is widely used to manage conditions such as anxiety, epilepsy, chronic pain, and inflammatory disorders, making it highly versatile across various patient groups. Its favorable safety profile, with minimal side effects and no intoxicating effects, has contributed to growing demand from patients seeking alternative or complementary treatments to traditional pharmaceuticals. The Australian Therapeutic Goods Administration (TGA) has played a pivotal role in the segment’s growth by rescheduling low-dose CBD for over-the-counter access, subject to stringent regulatory approvals. This policy shift has expanded CBD’s reach beyond prescription-only models and fostered product innovation in wellness, skincare, and nutraceutical categories. The availability of CBD in multiple formats oils, capsules, topicals, and beverages further enhances its market appeal.

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Regional Insights

Australia Capital Territory & New South Wales as the dominant region in the Australia Legal Cannabis Market in 2024. This is driven by high population density, progressive regulatory frameworks, and strong healthcare infrastructure. NSW, being the most populous state in the country, accounts for a substantial share of medical cannabis prescriptions and retail demand. The region is home to a large number of prescribing doctors, specialist clinics, and telehealth services that have significantly improved patient access to cannabis-based treatments. Sydney, as a commercial and innovation hub, supports a thriving ecosystem of cannabis companies involved in research, product development, and distribution. Additionally, NSW has become a center for clinical trials and pharmaceutical research, attracting investment and fostering partnerships between cannabis firms and research institutions. The ACT, while smaller in population, has played a significant role in shaping public discourse around cannabis use by implementing some of the most progressive personal use laws in the country.

Recent Developments

• In April 2025, Software Effective Solutions Corp., operating under the brand Medcana, announced a major strategic entry into the Australian legal cannabis market by securing licenses for the importation and distribution of pharmaceutical cannabis products. This move is aligned with Medcana’s broader international expansion strategy, aimed at establishing a stronger foothold in the growing global medical cannabis industry, with Australia identified as a high-potential market due to its favorable regulatory environment and rising patient adoption.
• In February 2024, Peak Processing Solutions, a subsidiary of Althea Group Holdings, entered into a contract manufacturing agreement with Collective Project to produce a portfolio of six cannabis-infused beverages.
• In January 2024, Althea Group Holdings Limited, a leading manufacturer and distributor of cannabis-derived therapeutics, broadened its product portfolio with the launch of two new medicinal cannabis formulations Althea THC10 and Althea CBD3:THC2 alongside an expanded softgel capsule range. This initiative reflects the company’s strategy to offer precisely dosed, patient-centric therapies aimed at improving treatment outcomes across multiple indications.
• In February 2024, Aurora Cannabis Inc., a prominent Canadian medical cannabis company, announced the acquisition of approximately 90% equity in MedReleaf Australia for an enterprise value of USD 32.6 million. This acquisition significantly strengthens Aurora’s presence in the Australian market and enhances its global footprint. Through MedReleaf’s established distribution network and regulatory positioning, Aurora aims to accelerate access to high-quality cannabis medications for Australian patients while leveraging local manufacturing and clinical expertise.
• In October 2023, AgriFutures Australia, a leading Research and Development Corporation, committed USD 2.5 million over a five-year period to advance research in four strategic areas critical to the hemp industry: hemp primary production, seed and varietal development, sustainability practices, and product innovation. This long-term investment underscores the government’s focus on supporting the commercial viability and growth of industrial hemp in Australia.

Key Market Players

• Cann Group Limited
• Zelira Therapeutics
• AusCann Group Holdings Ltd.
• Bod Australia
• Althea Group
• ECOFIBRE
• Botanix Pharmaceuticals
• EPSILON
• Little Green Pharma
• Incannex

Report Scope:

In this report, the Australia Legal Cannabis Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Australia Legal Cannabis Market, By Source:

o   Hemp

o   Marijuana

• Australia Legal Cannabis Market, By Derivatives:

o   CBD

o   THC

o   Others

• Australia Legal Cannabis Market, By Cultivation:

o   Indoor Cultivation

o   Greenhouse Cultivation

o   Outdoor Cultivation

• Australia Legal Cannabis Market, By End Use:

o   Industrial Use

o   Medical Use

o   Recreational Use

• Australia Legal Cannabis Market, By Region:

o   Victoria & Tasmania

o   Queensland

o   Western Australia

o   Northern Territory & Southern Australia

o   Australia Capital Territory & New South Wales

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Australia Legal Cannabis Market.

Available Customizations:

Australia Legal Cannabis Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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