Medical Cannabis Costs

Since medical cannabis was legalised in 2016, the cost of cannabis in Australia has dropped drastically. However, patients are still paying prices that are considerably higher than people in other countries.

Price has been a huge barrier to access for a number of patients. In many cases, the price, or perceived cost, of medical cannabis has led people to purchase their medicine on the black market. A study of medical cannabis use in Australia showed that 21.2% of respondents purchased their medicine from an illicit dealer because legal medical cannabis was too expensive.

Telling you how much medicinal cannabis will cost you is a difficult task because there are various factors that go into how much you’ll spend as once-off costs for patient approval, and ongoing costs for your medication vary. Prices for cannabis itself vary based on things like the type of product (i.e. flower or oil), the concentration of cannabinoids in the product, the amount required, the source, shipping, other possible fees and pharmacy charges.

In this article, you’ll learn what the cost of medical cannabis is in Australia, why it’s so expensive and which medical cannabis products are the least expensive. If you’d like to jump to a section that interests you, here’s what we’ll cover:

  1. Why is medical cannabis so expensive in Australia?
  2. Medical cannabis product prices.
  3. How much does medical marijuana cost?
    1. Australian grown cannabis products are cheaper.
  4. Factors in lowering the cost of medical cannabis.

Why is medical cannabis so expensive in Australia?

In order to answer this question, we spoke with Diandra Phipps, the COO of Tetra Health. Diandra has a background in medical cannabis from working in Canada and has a really great understanding of the cannabis landscape in Australia. You can listen to a short clip of our interview with Diandra, or read on.

There are two main reasons that medical cannabis is so expensive in Australia:

  1. Most of our medical cannabis is imported from overseas.
  2. The strict legal requirements that the government imposes on medical cannabis manufacturers and distributors.

About 95% of Australia’s medical cannabis products are imported from Canada or Europe. Often, from a patient’s perspective, it appears that companies in Australia are taking advantage of this and charging really high prices. While clinics do charge a fee for completing the application process and some independent GPs mark up their application process, you need to understand the other areas that add to the price.

There are costs associated with:

  • Importing the product
  • Storing it in special facilities (cannabis is currently a schedule 4 or schedule 8 drug)
  • Quality control and testing
  • Shipping costs – because medical cannabis can’t be stored in pharmacies until an approval is received.

These supply chain costs and regulatory hurdle costs don’t get added to products in other countries. So, until Australia has more homegrown and manufactured products, the price of medical cannabis will continue to be high.

Diandra was clear about the fact that patients need to be able to access cannabis at a reasonable price. She did, however, want to make the following call out:

“A number of the international suppliers have really helped to build the market here. They’re educating patients, providing access, and educating physicians. I can tell you that they’re not making huge profits. And even though they’re doing what they can as the regulations change, to lower the cost whenever possible, it really doesn’t solve the short term problem because there are very few domestic suppliers in Australia that are actually providing cannabis to medical patients.”

NOTE: at the time of recording this interview there were only two domestic suppliers. This quote has been updated to reflect the fact that there are now more.

Medical cannabis product prices

The best way to explain cannabis product prices is to look at dosages and average patient spend.According to the FreshLeaf Analytics Q1 2020 Report, patient dosages are increasing but cannabis prices are decreasing. As of Q3-2019, there were 63 medical cannabis products available, all still available in Q1-2020. Thirty of those products have had price reductions (price to pharmacy) which is excellent for patients.

FreshLeaf Analytics Medical Cannabis Product Cost 2019-2020

A price to pharmacy decrease means that medication pricing for consumers should stay stable or decrease. We expect to see this trend to continue, particularly as new local players come into the market.

Cost of Cannabis


How much does medical marijuana cost in Australia?


When we look at the average patient spend on medical cannabis, about half of all patients spend less than $10 a day and around two-thirds of patients are spending less than $15 a day.

It’s also important to note that not all product prices are equal. As mentioned above, about 95% of products are imported from overseas, so the products that are produced locally are going to have lower supply chain costs and therefore be less expensive.

Calculating Your Product Cost

Cannabis pricing cost formula honahlee

There are a number of factors that go into patient spend including:

  1. Medication prescribed
  2. Product cost
  3. Daily dosage

The two real unknowns prior to becoming a patient are the medication prescribed and daily dosage. 

While you may be able to do your research and find out product options, your doctor will be the one to choose the product right for you. You may start with a CBD oil and eventually end up on multiple or a different medication. 

Dosage is different for everyone. The one factor that is guaranteed about dosage is that your doctor will start you low and increase dosages slowly. The titrating up allows you and your doctor to find the dosage that helps with your symptoms and has limited or no side effects.

When calculating your medicine spend, we recommend that you cost your product at price per mg of cannabinoid in the product.

So if you have a product that’s 100mg/ml of CBD, the bottle is 30ml and the product cost is $150, here’s the calculation:

Cannabis pricing cost cbd example honahlee

This type of calculation helps you to compare different product prices with your doctor on an equal playing field.

Australian grown cannabis products (Cheaper)

FreshLeaf Analytics Australian Cannabis Patient Per Day Pricing Q1 2020

About half of all patients spend less than $10 a day and around two-thirds of patients are spending less than $15 a day.

While there are a number of Australian cannabis product manufacturers and distributors, there are only three companies that make products from Australian cannabis, manufacture in Australia and supply to patients. These three companies are:

Currently, Canndeo sells the cheapest Full Spectrum CBD product in Australia. It costs about $0.07 per mg. Canndeo is set to release a number of new products at the end of June.

Entoura currently has one Australian grown product (EMC 10:15 THC:CBD oil) and a new product (EMC THC 26 oil) which will be launched in August.

While price is definitely an important factor when talking to your doctor about cannabis medicine, it’s also crucial that your doctor finds the right product with the correct cannabinoid and terpene content for your condition. It’s also important to remember that like other medications, cannabis does not work for everyone.

Finally, it’s important to remember that you can go through multiple pathways to access medical cannabis. We’ve outlined the processes at a high level to help you calculate your potential costs.

Lowering the price of medical cannabis

There are a number of factors that will push the price of medical cannabis down. Many of these things are already happening behind the scenes and will take a bit more time. 

Domestic Suppliers And Cost

First is an increase of domestic suppliers. There are a number of domestic suppliers that have already received their grow and manufacturing licenses. These companies are now in the process of going through a range of processes:

  • Multiple grow cycles to prove their plant consistency.
  • Quality Assurances processes to make sure the products are safe.
  • Stability testing to make sure their products have the required shelf life.

Once these producers have met the requirements and enter a product into the market, product prices should drop yet again.

Number of Patients And Cost

Another issue is the number of medical cannabis patients accessing cannabis through legal channels in Australia. Currently there are only about 15,000 patients which means we’re not seeing the benefits of economies of scale. As more patients enter the market and legal demand increases, the price of cannabis medicine will decrease.

Authorised Prescribers And Cost

Finally, an increase of the use of the Authorised Prescriber (AP) scheme will help lower the cost of medical cannabis. Authorised Prescribers have permission, from the TGA, to prescribe specific cannabis products for specific conditions without going through an application process each time. 

Because APs are more readily able to prescribe, manufacturers and suppliers are able to then wholesale ship a product into pharmacies due to the demand. APs ability to prescribe means these suppliers can do wholesale shipments for foreseeable supply. This in itself allows suppliers to reduce the costs, thereby the pharmacies, reducing the cost to the patient. 

Conclusion

At honahlee we’re all about making medical cannabis more accessible from both a cost and streamlined access standpoint. We know that there are a lot of people out there who are opposed to legal access due to the difficulty and cost. 

We understand that these are real and serious challenges patients are facing. We also believe that the more people who engage in the legal access process, the faster we’ll see the results we all want – easier access at a lower cost.

Medical cannabis prices have come down and will continue to drop. And surprisingly, an independent review on CBD shows that the legal and black market costs are similar in many cases. We need more local licensed growers, and more patients to go the legal route to not only create economies of scale but also to continue to show government bodies that cannabis is a medicine that’s helping people and we need better access. 

If you’re using medical cannabis from your own supplier, it doesn’t hurt to contact your doctor or a clinic to learn about your options. With some of the clinics, the first contact or call costs less than $50 which would allow you to get a better understanding of your situation.