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.”