Medicinal Cannabis

By Gabrielle Stannus

In good news for existing and potential medicinal cannabis growers, the Federal Government recently legalised the export of medicinal cannabis products through the Narcotic Drugs Amendment (Cannabis) Regulations 2018. The ability to export medicinal cannabis was implemented to allow the Australian industry to expand and improve supply of medicinal cannabis within Australia.

In 2016, the Federal Government enacted the Narcotics Drug Amendment Act 2016. This legislation allows the cultivation of cannabis plants and production of cannabis and cannabis resins in Australia so as to provide Australian patients with access to medicinal cannabis for therapeutic purposes only.

To legally cultivate cannabis for therapeutic purposes, a grower must either hold a medicinal cannabis licence or a cannabis research licence granted by the Office of Drug Control (ODC).

Medicinal cannabis licence
A medicinal cannabis licence authorises either cultivation (the growing of cannabis plants) or production (the separation of cannabis and cannabis resin), or both.

The ODC will only grant a medicinal cannabis licence if satisfied that the cannabis cultivation and production is for supply either to a person licensed to produce cannabis or to manufacture medicinal cannabis products. The applicant must demonstrate that they are known to the producer/manufacturer and that producer/manufacturer is willing to enter into contracts for the supply of raw cannabis material.

When applying for a permit, a licensee must have, and submit to ODC, a contract with the producer/manufacturer that satisfies the regulation’s requirements.

Growers licensed under a medicinal cannabis licence are not permitted to cultivate mixed use crops, i.e. those where cannabis for medicinal/research purposes is separated out and then the remainder of the plant sold for industrial purposes.

Cannabis research licence
A cannabis research licence authorises the cultivation and/or production of cannabis for research related to the medicinal use of cannabis. To obtain a cannabis research licence, an applicant must explain the research’s purpose and how it relates to medicinal cannabis and/or medicinal cannabis products. New strain development requires a cannabis research licence, whereas normal propagation does not, so long as the cultivator holds a medicinal cannabis licence.

Holding both licences
A grower may cultivate for both medicinal and related research purposes, but they will need to hold licences and permits for both. Licences must be issued before any cultivation or production commences.

A manufacturer may hold both manufacturing and medicinal cannabis licences so as to develop a vertically integrated supply chain.

Suitability of applicants and employees
Licences can be issued to individual persons or a body corporate, so long as each individual or body corporate director are determined to be ‘fit and proper’ under the legislation. An applicant’s character will be assessed according to their financial background and circumstances, their capacity and capability to operate a medicinal cannabis enterprise, previous criminal convictions and whether they are considered of 'good repute.

All employees must meet the 'suitable person' requirements, be over eighteen years old and have no conviction for a serious offence in the last five years.

Before granting a permit, the ODC undertakes an inspection of the proposed facilities to ensure the applicant has fulfilled the licence’s provisions, including physically securing the premises. To comply with security requirements and the manufacturing partner’s quality control provisions, cultivators would probably find it easier to grow indoors, rather than outdoors. This would help to prevent cross-pollination from legal industrial hemp crops or from illegal crops grown nearby.

There is currently no limit set on the number of cultivation licences that will be granted in Australia. However, Australia is a signatory to the Single Convention on Narcotic Drugs, 1961 (Single Convention) and has an obligation to avoid the accumulation of cannabis in excess of domestic requirements. Therefore, the number of cultivators licensed to grow and supply cannabis to licensed manufacturers depends on the demand from prescribers (i.e. doctors) and the patients they treat.

Acquiring seeds and nursery stock
Once granted a medicinal cannabis licence or a cannabis research licence, a person is authorised to obtain cannabis plants, including seeds, in order to commence cultivation.

Cannabis plants can only be obtained from legal sources either in Australia or from overseas where cannabis cultivation is legal at the Federal Government level and is consistent with the Single Convention. This includes tissue cultures, nursery stock and seeds. If genetically-modified (GMO) seed is to be used, it has to satisfy all Australian regulatory requirements, including those of the Office of the Gene Technology Regulator and states and territories.

Seeds may be imported from global industrial hemp exporters. If obtaining plant material from Australian industrial hemp growers, the supply of the cannabis plant/seeds must be consistent with the hemp grower’s state/territory licence.

To import cannabis seed for sowing, all importers require an import permit issued by the Department of Agriculture and Water Resources (DAWR) prior to the seed being imported into Australia. Import permits can be lodged through BICON.

Only medicinal cannabis products manufactured under a Good Manufacturing Practice (GMP) Licence, listed as export-only or registered in the Australian Register of Therapeutic Goods (ARTG), or extracts of cannabis (or cannabis resin) manufactured under a Narcotic Drugs Act 1967 licence that are not in the final dosage form, can be exported. Cannabis, including flowers and leaves, or cannabis resin cannot be exported under this recent amendment.

NB. Cultivators with a licence issued prior to February 2018 who wish to export medicinal cannabis must have their licence varied so that the conditions allow for export.