Why Over-Taxing Medicinal Cannabis Could Destroy Australia’s Legal Market

As Australia’s medicinal cannabis industry matures, one of the greatest risks is not scientific — it’s economic. Around the world, governments are learning the hard way that excessive cannabis taxation and over-licensing don’t generate sustainable revenue. Instead, they push patients back to the illicit market, stifle legitimate businesses, and ultimately undermine the goals of legalisation and patient access. 

What Global Cannabis Markets Can Teach Australia About Taxation 

A recent MMJ Daily article highlights the dangers of tax hikes in California and Maryland — both of which are seeing declining legal cannabis sales and a resurgence of unregulated products. 

“Raising these taxes even higher will undoubtedly drive prices out of reach… undermining the primary goal of legalisation: safe, affordable access to lab-tested products.” – NORML, via MMJ Daily  

High Cannabis Taxes Are Fueling the Illicit Market 

In every jurisdiction where cannabis has been legalised, a pattern is emerging: 

• Over-taxation makes legal cannabis unaffordable 

• Patients and consumers return to unregulated sources 

• Licensed businesses struggle to survive 

• Governments lose the very tax revenue they hoped to gain 

You can’t out-tax the black market. And you can’t expect compliance when legitimate businesses are penalised for doing the right thing. 

The Danger of Over-Licensing: A Race to the Bottom 

Issuing too many cannabis licences may look like market liberalisation, but it creates a survival-of-the-fittest scenario. With limited demand and oversupply: 

• Prices drop below sustainable levels 

• Operators cut corners to survive 

• Compliance becomes harder to enforce 

• Quality, safety, and trust all suffer 

Canada, California, and New York have all shown us what happens when over-licensing meets over-regulation. The result isn’t innovation—it’s collapse. 

Australia’s Cannabis Industry Must Avoid These Mistakes 

At Biortica Agrimed, we’re proud to operate within Australia’s tightly regulated medicinal cannabis framework. But we know that if Australia introduces high taxes or over-saturates the licence pool, we’ll be recreating the same failed models seen overseas. 

To build a future-proof industry, Australia must commit to: 

• Sustainable medicinal cannabis taxation policies 

• Strict but balanced licensing practices 

• Support for compliant, locally owned producers 

• Patient-first access to safe, affordable, regulated products 

Setting the Record Straight: Over-Taxation Is Not Smart Economics 

Let’s be very clear: you don’t get tax revenue from the illicit market. Any policymaker proposing higher taxes on cannabis without understanding market behaviour is not boosting the economy—they’re burning it. 

If someone calls for inflated cannabis taxes or licence quotas under the guise of “public good,” there should be ample, evidence-backed material in the public domain to show why they’re wrong—fiscally and morally.  

Biortica Agrimed’s Position: Protecting Patients and a Sustainable Local Industry 

Biortica and our cultivation partner Green Farmers are fully licensed, vertically integrated, and Australian owned. We believe in: 

• Transparency 

• Regulatory integrity 

• Sovereign, domestic production 

• Affordability and safety for patients 

But we also know the entire legal framework can be undermined if bad tax policy is allowed to take root. 

Australia Must Learn from the World Before It’s Too Late 

The writing is on the wall: over-taxation and over-licensing will destroy the legal cannabis industry. Australia has an opportunity to build something sustainable and sovereign. But only if we resist the temptation to follow failed overseas models. 

Biortica Agrimed will continue to speak up—for patients, for evidence, and for smart policy that keeps the cannabis industry above ground, ethical, and economically viable.