Cannabis cultivation in Australia is still relatively small, as
recreational use remains illegal. But the government hopes domestic
medicinal use, legalised last year, and exports will rapidly boost
production.
"Our goal is very clear: to give farmers and producers the best shot
at being the world's number one exporter of medicinal cannabis,"
Health Minister Greg Hunt told reporters in Melbourne.
Shares in the more than a dozen Australian cannabis producers listed
on the local exchange soared after the announcement.
Cann Group ended the day up 35 percent; AusCann Group rose nearly 54
percent; and BOD Australia closed up about 39 percent. All were
record highs for those companies. Hydroponics Company finished up 30
percent, hitting its highest price in five weeks.

Peter Crock, chief executive of Cann Group, which cultivates
cannabis for medicinal and research purposes, said medicinal
marijuana production had been stymied by limited demand from
Australian patients.
"While the Australian patient base is growing, it is very small,"
Crock told Reuters. "Being able to export will allow us to have the
scale to increase production."
Hunt said the new legislation would include a requirement that
growers first meet demand from local patients before exporting the
remainder of their crop.
Despite growing demand, only Uruguay, Canada and the Netherlands
have so far legalised the export of medicinal marijuana. Israel has
said it intends to do so within months.
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The Australian government's proposal needs to pass federal
parliament when it returns to session in February. The country's
main opposition Labor Party has signalled it would support the move.
Exports would then likely begin within months.
Fuelled by a growing acceptance of the benefits of marijuana to
manage chronic pain, moderate the impact of multiple sclerosis and
to soften the effects of cancer treatment, several countries and 29
states in the United States have legalised cannabis for medicinal
use.
Australia's chief commodity forecaster does not publish data on
cannabis production, but rough estimates by the University of Sydney
estimated the legal industry at A$100 million ($78 million), well
below the C$4 billion ($3.19 billion) that Canada estimates its
market to be worth.
U.S. consultancy company Grand View Research last year forecast the
global medicinal cannabis market would be worth $55.8 billion by
2025.
(Reporting by Colin Packham; Editing by Jane Wardell and Gerry
Doyle)
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