Marketers are being told to prepare for the launch of a whole new category as momentum grows towards expanding the cannabis market in Australia.

Sam Geer, Managing Director of Initiative, led a discussion at a joint session for Initiative and Nine’s Big Idea Store, exploring what the growth of the cannabis market would mean in this country for brands in the sector and other related industries competing for consumers’ disposable income.

“Today we are talking about cannabis and the business of cannabis,” said Geer. “Professionally speaking [the marketing industry] needs to be thinking about this and we need to be understanding it. Globally, the legal cannabis market is $100 billion, there are 300 publicly listed companies, and in North America there are five times the number of employees in the cannabis market than the mining market – just think about that.

“Locally this is also happening. Australia is the fastest growing medical cannabis market in the world per capita and the fifth largest market globally. Queensland is ahead of the game. They have built the world’s largest cannabis greenhouse and Victoria is trying to one-up them with a new $130 million facility currently being built.”

Geer noted that 42 per cent of Australians already support legislation of cannabis but the path to legalisation would be complex.

Martin Lane, co-founder of local cannabis news website Cannabiz, said he unexpectedly found himself entering the space after seeing the market overseas and that the pathway for Australia was clear.

“I went to Advertising Week in the UK in 2017 and there was a whole stream dedicated [to the business of cannabis],” said Lane. “It’s important to prepare now, [for] when we become the US and the UK.

“There’s a path in terms of Australia. In the US it is legalised in 16 states, in the UK it is classified as a food, in Canada you have both medicinal and recreational. What will happen in Australia? It is now possible to buy CBD [cannabidiol] over the counter in pharmacies, but there isn’t currently a medicine available to be sold.

“We’re 12 to 18 months away from being able to go into Chemist Warehouse and buy CBD. When that happens and the price comes down, it will begin to compete in the complementary medicine stage. That gets you another couple of million, then you get to recreational, probably five years away in my opinion.”

Australian Financial Review reporter, Natasha Gillezeau, noted new research from IBISWorld which noted the local sector was still very much in “start-up” mode but would move swiftly from infancy.

“Where the business leaders are at is quite far away from where the consumer is,” said Gillezeau. “But the expectation is that revenue for the whole sector will go up 79 per cent year-on-year, so there is opportunity.”

Many marketers will be watching which existing brands seek to enter the space and capitalise on the growth, but Eric Thomson, Sydney-based Global Marketing Director Winemakers for drinks giant Pernod Ricard, warned that cultural acceptance was the key overhanging question.

“The cultural context is really important,” Thomson said. “Medicinal will be the first cab off the rank and 42 per cent of Australians favour legalisation. In Canada and the [United] States it was 80 to 90 per cent in favour before it was legalised. It stopped being a political discussion. Here it remains political.

“I struggle to think of a brand or a product or a category so consistently demonised in culture that has been turned around. Anywhere there is money, people will take the opportunity. The culture has started to shift from demonisation to business opportunity.”

Thomson said his brands were reluctant to become players.

“We had a lot of think-tanks and workshops to establish the impact we thought [cannabis] would have on the market. However, we haven’t really seen the material impacts in terms of overall consumption declines in the alcohol beverage sector, premium wine and spirits.“It’s very difficult to replace sharing a glass of wine over a meal. I don’t see cannabis ever being able to do that – and that’s why I’m confident that our category will continue to thrive alongside whatever [de]regulation happens.”

Lane noted that a key question would be how the cannabis market was sold from a brand perspective, and whether the industry could shrug off its “stoner” image.

“Another key question is what’s going to happen with the [marijuana] leaf? The leaf is the golden arches of the cannabis industry. There is a theory that is a bit throwback – the use of green colours, it’s all a bit stoner. So many cannabis companies start with the leaf and that disables them from putting the product in a wider cultural context.”