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Australia’s White-Label Identity Crisis: A Story of Quality, Branding and Margins

Jul. 10, 2025 by SOMAÍ Pharmaceuticals

As the medical cannabis industry in Australia continues to boom with more patients than ever and the most modern products available on the global cannabis market, white-labeled brands are popping up overnight in droves.

The Cannabis Branding Craze in Australia

Australia is one of the most innovative global medical markets in terms of product choices and patient access. Australia’s infrastructure has made it very easy to import flower and oils from countries with low production costs. Australian producers then repackage flower or mix oils into various dosage forms. Branding is a simple function of a label and an Instagram account. That’s all that is needed now.

This branding bonanza has many industry insiders scratching their heads. On one side, the largest clinics with their own white labeled brands control the client experience, so they are less concerned about daily new brand launches. However, for the larger community, white-label brands are becoming indistinguishable from each other and rapidly driving prices down. In fact, up until recently, most retail flower was priced around $11 to $12 AUS per gram. Now, it is easy to find $6 AUS per gram flower. Prices have halved in the last few months, and margins are now a real issue.

How Does White Labeling Work in Global Cannabis Markets?

In other large international markets, most growers and manufacturers own their brands. Although there were countless local white label brands in markets like the United States and Canada when their industries were young, these white label brands became extremely limited as prices compressed and the growers and manufacturers could not share in the smaller margins.

How White Label Pricing Works (or Doesn’t)

The economics are very simple. Most white label cannabis growers and manufacturers are driven to very low profitability. When markets like Australia drop in pricing, there is very little room to negotiate for making cheaper products.

For example, if a white labeler and a retailer are splitting $1, there might be enough for both sides to sustain. But if the price is pushed down to $0.10, there is little to share.

As time passes, groups continue to shop for the lowest prices and drive existing vendors to lower their prices enough to compete with global pricing. This drive to zero producer margin causes cultivators and producers to create their own brands and sell upwards to other points.

White Labelers Lack Quality Control

Another problem with white labeling is quality control. When brands chase the lowest margins, cheaper flower and oil are their only concerns. Because suppliers change as soon as brands find cheaper prices, there is no product consistency and no transparency regarding changes. Flower that used to be grown in a greenhouse might be swapped for flowers grown outdoors, and the patient may never know their medicine is different.

Independent Producers are Motivated to Uphold Quality

On the other hand, owners of cultivation or manufacturing facilities who brand their own products will focus on quality to make sure their brand stands out as solid and consistent.

Controlling patient experiences through owned quality standards is what branding is ultimately about. As time goes on, white labelers that obscure the story of how their cannabis is grown or produced will feel the negative effects of ignoring quality and consistency.

What About Internally Owned Cannabis Brands?

Although pharmaceutical cannabis groups with loyal patients are important to the overall landscape, it goes against common sense to say that an internally owned brand is either ethical or in the best interest of the patient. Many products are great, and these early internally owned brands filled a void, but they were never intended to be the final state of the industry or make up the majority of sales.

How Mature Markets Migrate Past White Labels

As independent brands grow out of owner-operated grows and large brands stretch across the globe, the independence of producers becomes more and more critical. The availability of choice raises independent brands above white labels with no dedication to quality standards.

As markets develop, larger brands and independent growers realize that the margins are no longer there and that branding their own products makes more sense. Eventually, those independently owned brands will become the future of the industry. 

Some major brands, like Curaleaf, even buy up their grow partners to fully control margins and quality standards. Additionally, large brands like Cookies carry decades of research and development that patients are looking for.

Why Does Australia Still Have White Label Cannabis?

Australia now has enough vertically integrated brands that white labels should be a thing of the past. Even compounding pharmacies are becoming outdated in light of the sheer number of finished dosage forms available.

However, white-label and compound pharmacy products continue to surge. Australia also owns enough clinics that make any one singular clinic owned white-label simply a label for that clinic since others would not want to carry another clinic’s brand, and they themselves are following a model of making a white-label.

Now, the new phase in the Australian cannabis market of new white-label brands popping up and selling someone else’s flower and someone else’s oil has become a big mess as everyone follows the leaders and believes they must have a white-label also.

What should have been a long-gone phase of the Australian cannabis market is becoming an ending point as consumers question what brands stand for and if their clinics are truly independent. To make matters worse, just a handful of white labelers currently feed more than 100 Australian brands. This problem is not isolated to Australia, though it’s dying out in most other established markets.

Some patients simply don’t know about white labelers, and some just care about the lowest prices, but most patients are getting educated and pushing back. Growing discontent among patients highlights the need for more reputable sources of information to outline when flower or extract bases are changed and who the new producers behind the scenes are.

Patients are asking these questions but finding few answers in an environment where advertising and marketing are extremely limited. Although limited, the message is getting out, and big and independent brands are becoming more popular.

The Future of Australia’s Independent Cannabis Market

This race to the bottom, where new brands imitate the big white-label brands to get a piece of the action, is lowering prices and consumer confidence. As Australia goes through this boom-bust phase, most white labels will eventually cease to exist, as in all other mature markets. Many owners, cultivators, and manufacturers will cut out white labels and create their own brands, leaving the lowest tier of products to large white labels. 

Australia continues to be the best global medical market for many categories, and this white-label fad will eventually pass. Patients and owners alike need to be aware and keep a long-term vision in mind while this short-term movement passes, which will happen sooner or later.