Good morning. Welcome to The Greenfields. We are your number one source for cannabis industry news and insights.

What've we got for you today?

• Are we heading for a medicinal cannabis shortage?

• Greens $25B Black Market

• Billions in revenue going missing in New York

Are we heading for a medicinal cannabis shortage?

Imported medicinal cannabis will be subject to similar rules as locally manufactured products from July 1st. The new rules could see suppliers fined and non-compliant products disappear from pharmacy shelves.

Over 90% of medicinal cannabis consumed in Australia in 2020 was imported. Local manufacturing capacity has increased since then, but the amount of imported medicinal cannabis is still quite significant.

The new rules say that imports have to be grown at a TGA approved site, or be grown at a site licensed under equivalent regulations for the country it is grown in. Countries that have regulations that are acceptable to the TGA are: EU member states, the UK, US, Israel, Canada, South Africa, Switzerland, and New Zealand.

There have been warnings of non-compliant product being dumped into the Australia market before the transition period ends on July 1.

However, there hasn't been a lot of attention given to possible shortages of medicinal cannabis because some imports are not compliant. Are patients being warned if their medicinal cannabis is non-compliant? Are they being given an opportunity to switch to a substitute ahead of July 1?

We'll have to wait and see. It's not clear how much of the product on the market is non-compliant and if the local industry has enough capacity to fill the gap.

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Greens $25B Black Market

David Shoebridge is back again with more big numbers. The Greens estimate the cannabis black market is worth about $25 Billion dollars.

This is based on wastewater analysis showing that on average Aussies are consuming about 14.6kg of pure THC per year, per thousand people. Using a price of $13.40 per gram, and some apparently high estimations of the average THC content of illicit market weed, they've cooked up the number $25 Billion.

It's great to see one of the bigger parties out there pushing for legalisation, but it's been about two months since David and the Greens released their last big number and we've yet to see them put forward any legislation.

We also came across this poster from the NSW Greens campaign which shows you just how high (😉) legal cannabis rates on their radar:

At least it's a higher priority than 'safe koalas'.

The Greens estimate the Australian people are missing out on about $28 Billion of tax revenue over ten years due to cannabis prohibition.

Billions in revenue going missing in New York

Speaking of missing out on billions. New York is believed to be missing out on $2.6 Billion in tax revenue over 8 years. MPG Consulting blames the slow pace of licensing and opening cannabis dispensaries.

Only 36 dispensaries will open in the state this year.

The report estimates that 900 dispensaries are needed to supply the state.

The delays are due to:

• Capital requirements. $1 million to $5 million in capital are needed for property acquisition, facility improvements, operating procedure development, and initial inventory sourcing.

• Inspections, permitting and hiring are taking 9 months to a year to complete.

To address this the report recommends existing licensed medicinal cannabis operators be allowed access to the recreational market to quickly increase the number of dispensaries.

Others are taking another route and suing New York state. A group of entrepreneurs, business people and other stakeholders have launched a lawsuit alleging the state should be opening up licensing to more people than just social equity applicants.

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

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.