While it might seem that overcoming the stigma of marijuana could be the biggest problem medical marijuana companies like Canngea would face, the truth is more prosaic for an industry that is rapidly gaining traction around the world.

Cannabis is used, for instance, to treat cancer patients for symptom relief.

According to the Cancer Council, “The potential benefits of cannabis and cannabinoids (active compounds derived from the cannabis plant) for symptom relief in cancer patients have been subject to a number of government reviews and public debate in recent years.”

However, it notes that at least for the time being, there are currently no natural and synthetic forms of cannabis and cannabinoids products approved in Australia for therapeutic use to alleviate side effects of cancer and chemotherapy. Applications to access unapproved cannabis-based therapeutic products are considered by the Commonwealth Department of Health on a case by case basis.

More than 30 countries including Canada, Chile, Colombia, Germany, Greece, Israel, Italy, and the Netherlands currently allow some form of medicinal use, as do 33 states in the USA.


That makes for a growing and potentially lucrative market and one that ASX listed Cangeea, a medical cannabis contract manufacturing organisation, is looking to tap into.

The business, which works with other cannabis companies to bring their products to fruition, was granted a Medical Cannabis Manufacturing Licence by the Office of Drug Control last year. Shortly after, it announced plans to construct a first-of-its-kind pharmaceutical-grade facility to grow and manufacture medical cannabis products.

“A lot of cannabis companies will try to do everything in the whole chain to try and develop a product, make the product, and get the product to the hands of consumers,” says Ryan Ballantyne, Canngea founder, and managing director.

There are also many cannabis companies who have focused their investment on developing a product and need help with the manufacturing which is where Canngea comes in.

“We take on their products. We steward their brand, and we look after it for them. We produce a really high-quality product for their patients and facilitate that to their customers.”

Like all drug businesses, there are rules and regulations to attend to, and like all manufacturers, there is a supply chain to manage.

According to Ballantyne, “There’s quite a long supply chain. There are three main development phases for cannabis product or for a product derived from it. In the research and development phase companies extract the plant, formulate it correctly and then prove there is some efficacy. So does it do what it says on the tin.”

Like a lot of drugs that need to go through clinical trials, this is an expensive and commercially risky stage.

The second part of the supply chain includes the growers and the manufacturers who take the product, formulate it, extract it, put it in compliant packaging and then distribute it around the world.

Finally, there is the matter of getting the product into the hands of the customers. “That’s really a huge part where you got to try and connect patients and doctors. It’s a controlled substance [so] you can’t just go out there and advertise. At Canngeea we play in that middle space. “

Ballantyne has worked for 10 years in supply chain logistics and agrees Canngea has identified a clear market opportunity, and the role it is best placed to play.

Diversity of supply

“I think what’s really important is not to try to own the entire supply chain but partner with a diverse supply chain,” says Ballantyne.

” You want to diversify your risk so we work with a lot of different growers in different jurisdictions and that means that we have a lot of options to choose from when it comes to sourcing and supply for our customers.”

Nial Wheate, science director, Canngea.
While medical cannabis might seem like a niche concept, the truth is that it will likely involve a lot of mainstream brands, says Nial Wheate, the science director Canngea, as well as director and chair of the research committee for the Australian Medicinal Cannabis Association.

“There it’s not just the cannabis companies that we’re going to be enabling. Vitamins and supplements companies like Blackmores and Swiss are the types of companies that are going to want to sell medicinal cannabis.

“We’re looking at consumer lifestyle products as well, and even pharmacy chains are going to want to have their own products. So companies like Chemists Warehouse, Priceline, and Terry White.”

Image credit : Photo by Richard T on Unsplash

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