Medicinal cannabis sales in Australia have fallen sharply for the first time in nearly a decade, with new analysis pointing to a regulatory crackdown on high-volume prescribers and clinics as the key driver.
A new report from Penington Institute shows sales dropped by 28.5% in the second half of 2025, a sudden reversal after years of rapid growth.
The data, obtained from the Department of Health, Disability and Ageing, reveals sales peaked at 3.72 million units in late 2024, held steady in early 2025, then fell to 2.65 million units by year’s end.
Penington Institute Chief Executive Officer, John Ryan, said the shift marks a turning point for the sector.
This is the first real correction we’ve seen in Australia’s medicinal cannabis market since it began. It suggests regulators are starting to get on top of the worst practices, particularly high-volume prescribing driven by profit, not patient care.
The findings land as the Therapeutic Goods Administration continues a high-stakes review of Australia’s medicinal cannabis framework, prompted by mounting concerns about patient safety and the rapid rise of telehealth-driven prescribing.
Penington Institute says the latest data shows increased enforcement is already having an impact.
We are seeing the effect of targeted enforcement in real time. That is the most effective way to deal with bad actors without punishing patients who genuinely benefit from these medicines.
The briefing points to widespread concerns about some operators, including extremely brief consultations, poor clinical oversight and business models that link prescribing directly to product sales.
At the same time, it warns that restricting access too far could push patients back to the illicit market.
Get this balance wrong and you risk undoing the progress that’s been made. Patients need safe access, not barriers that drive them elsewhere.
The report also raises concerns about gaps in product quality oversight, particularly as Australia becomes more reliant on imported medicinal cannabis.
Penington Institute is urging regulators to stay focused on enforcing existing rules and improving compliance, rather than just introducing broad new restrictions.
The Therapeutic Goods Administration review is ongoing, with no recommendations released to date.
Penington Institute CEO John Ryan is available for interview.
- Penington Institute is an independent drug policy research non-profit committed to freedom from serious drug harms.
- Media contact: Ryan Sheales, 0402 351 412, ryan@theagendagroup.com.au