Good Morning. Welcome to The Greenfields where we explain the cannabis business to you in plain english.

What’ve we got for you today?

• Greens of the Stoneage $28B tax windfall

• Another sleep study failure

• Germany hasn't submitted their cannabis homework

• ASX announcement roundup

Greens of the Stoneage $28 Billion Tax Windfall

David Shoebridge announced The Greens plan to legalise cannabis would generate $28 Billion in tax revenue over 10 years.

Key things to know about the Greens plans:

• People would be allowed to grow up to 6 plants themselves

• You have to be over 18 to buy recreational cannabis

• Tourists can partake

• They want to tax the shit out of it with at least a 15% excise

So how did they come up with $28 Billion?

It’s based on a few assumptions:

• 12% of the Australian population would consume recreational cannabis

• 15% growth in demand upon legalisation

• Recreational cannabis users would purchase 6 grams per week

• The wholesale price would be $13.40 per gram

• Tax revenue would come from GST, company tax, and a 15% cannabis excise, or maybe a 25% cannabis excise if you want to raise $36 Billion instead

No, we are not going to challenge the PBO at math.

But the two things that stick out in those assumptions are the $13.40 gram wholesale price and the 6 grams per week.

That seems a bit high (😉). The estimated wholesale price is almost the same as the current retail medicinal cannabis price which is around $14 per gram.

(Famous redhead musician Josh Homme of Queens of the Stoneage doesn't believe that either)

The Greens say the revenue could fund an $80 per week increase in jobkeeper or social housing for 250,000+ people. The estimate also doesn’t include big savings from policing, courts, and jails.

The Greens plan leans towards social equity. It excludes any existing tobacco, alcohol or pharmaceutical and focuses on co-operatives and sole traders. Existing medicinal cannabis companies are probably going to be against this sort of thing because it might exclude them.

What's next?

The Greens will release a bill for review in the coming weeks. They hold the balance of power in the senate, so we're hopeful that something will happen sooner than later, but you probably knew that already.

Enjoying The Greenfields?

Send this email to a friend to make sure they don't fall behind in the cannabis business.

Click here to subscribe for free:

Another sleep study failure

Ecofibre (ASX:EOF) are the latest Aussie cannabis company to fail placebo tests for over-the-counter low-CBD treatment for sleep disturbances. Ecofibre's CANN-Sleep trial failed to show any difference in treating sleep disturbances than a placebo.

The TGA allows products with a maximum of 150mg of CBD per day to be sold by pharmacists.

What's going on here?

Things aren't looking great for over-the-counter CBD sleep treatments. The TGA's limit of 150mg per day might be too low to see any sort of improvement in people's sleep.

Applied Cannabis Research have said:

What they are saying is that previous trials have not found low doses of CBD (less than 150mg) are not any different to taking a placebo for sleep issues.

So why is everyone trying to make an over the counter sleep treatment?

Because sleep is the new hot thing in healthcare. Poor sleep has been connected to depression, anxiety, schizophrenia, OCD, autism, being an influencer (probably), and many, many more conditions. There's an enormous market for a safe, effective, over the counter sleep treatment and the first one to get it is going to win big.

Germany hasn't submitted their cannabis homework

Germany's attempts to start a legal market in 2024 are butting up against EU law. It's looking less likely that they'll submit their proposals in time to the EU commission to get permission to go ahead in time.

Cannabis is still technically illegal in the EU, despite a number of countries decriminalising it. The EU and Germany are in discussions to work through legal, operational and health questions about the proposal.

Australian cannabis producers have a lot of interest in the European market due to its size and similar cannabis production regulations.

ASX Announcement Round-Up

• Neurotech International Limited (ASX:NTI) announce they have started trials for their new drug NTI164 Full-Spectrum Medicinal Cannabis Plant Extract with 0.08% THC on children with Autism Spectrum Disorder.

• Emyria Limited (ASX:EMD) announced they have started trials for a low-dose CBD capsule for treating psychological distress

• Cann Group (ASX:CAN) raised $8.18 million and had sales of $3.85 million last quarter.

That’s your walk through The Greenfields of the cannabis industry today. We’ll see you again on Thursday, but if you want more before then follow us on Twitter or Facebook.

DISCLAIMER: This newsletter is not financial advice. It is strictly educational and is not investment advice or a solicitation to buy or sell anything or to make any financial decisions. Please do your own research and do not buy anything dodgy.