Maribyrnong council won’t be entering the medicinal cannabis industry.
As reported by Star Weekly, councillors voted in September 2021 to entre the medicinal cannabis industry in a bid to reduce household rates.
Community engagement on the decision ran until January 2022, with 600 residents completing a survey about council’s plans.
Of the residents who completed the survey, 74 per cent (445) said they were supportive of council entering the medicinal cannabis business. Twenty-six per cent (155) of survey respondents did not support the proposal.
In March 2022, council began its feasibility and commercial legal due diligence stage.
A report to the June 20 council meeting revealed challenges and risks associated with the industry, outweighing the potential benefits for residents.
The report stated it would be “extremely difficult” to generate stable, short-term returns and that council would struggle to “compete in the industry due its limited financial capital.
The report also stated that high technical expertise and ability to navigate in a complex regulatory market is required and that the industry is still developing and is constrained by a large range of barries.
Mayor Sarah Carter said there are challenges and risks involved with this type of venture that outweighed the potential benefits.
“While the Medicinal Cannabis industry in Australia has experienced rapid growth since its legalisation in 2016, it faces numerous obstacles, including strict regulations, technical expertise requirements, and capital intensity,” she said.
Cr Michael Clarke said it was a remarkably sad outcome for the community.
“We had almost 75 per cent support of the community to investigate this venture, which we did,” he said.
“We went through a due diligence process, it was only after going through the study we came to the understanding that as a business venture we should not proceed.”
