Medicinal cannabis regulation in Australia: October 2016
Caveat: the key Federal regulations covering medicinal cannabis were published earlier this month, and the industry is still struggling to absorb the complexity involved. Anything in this document is based on Cannabis Consulting Australia’s best efforts, but we provide no warranty express or implied, as to the accuracy or completeness of this material. We are not lawyers, and we recommend that you engage professional legal advice before taking any further action.
In February 2016 the Narcotic Drugs Amendment Act 2016 became law in Australia. It contains a number of significant changes to the Narcotic Drugs Act 1967 and one minor change to the Therapeutic Goods Act 1989. In October 2016 the Narcotic Drugs Regulation 2016 was published, which adds a lot more detail.
The new Act defines a number of Commonwealth licences and permits that can be granted to allow the production of medicinal cannabis in Australia:
- A cannabis research licence/permit allows the holder to cultivate, produce, package, store and transport cannabis plants and/or resin for research purposes.
- A medicinal cannabis licence/permit allows the holder to do the same as a research licence, but for medicinal purposes.
- A manufacture licence/permit allows the holder to turn cannabis and/or resin into drugs for research and/or medical use.
Authorisation is a multi-step process. A licence is granted to an organisation on the basis of their background and capability. Both cultivation and manufacture activities must be individually licensed.
Manufacturers and cultivators must subsequently obtain one or more permits which will specify the amounts and types of cannabis/cannabis products to be cultivated and manufactured. Only once valid permits are obtained for both the manufacturer and cultivator – at the Federal and, if relevant, State/Territory levels – can a cultivator begin growing to supply that manufacturer.
The decision on the grant of licences and permits lies with the Secretary of the Department of Health.
The Act sets out a number of things that Health has to consider before it grants research and medicinal licences, including:
- whether the State or Territory involved has a problem with it
- whether the applicant is a ‘fit and proper person’ (ie whether they have a criminal record or criminal connections)
- the level of security that the application is proposing for the site of the activity (the site must also be specified)
- for a medicinal license, whether they have an existing contract with a customer (eg a manufacture licence holder) for the product
Good Manufacturing Practice
For a manufacture license not for research purposes, Health must also ensure that manufacturer complies with the Therapeutic Goods Act. This includes the manufacturer being certified for something called ‘Good Manufacturing Practice’, which in Australia is a subset of a suite of international standards called PIC/S.
PIC/S is a 193-page suite of documents which apply to the manufacture of everything from medicinal gases to radioisotopes for medical use, and everything in between (including over the counter drugs). Complying with PIC/s is extremely onerous, and most large pharma companies have an entire department dedicated just to ensuring compliance with it.
Setting up a new organisation that complies with the TGA/GMP/PIC/S will be very onerous. In practice, we think that most growers and grower/producers will contract with existing Australian drug manufacturers (ie either pharma companies, or one of the specialist pharma contract manufacturing companies). Health have stipulated that they will not allow export at this time.
Even if you have a complete supply chain in place from cultivation to manufacture, you will still have to apply to the TGA to approve the particular drug that you intend to supply. According to the TGA, the likely time for them to evaluate a ‘new chemical entity’ will be around 10.5 months. Even for generics (new versions of already approved chemical entities) the time is 8.5 months. The TGA application fees alone can run to tens or hundreds of thousands of dollars: but of course that’s only a problem for manufacture, not for cultivation, production or research.
Health have not yet published application forms for licences, but they’ve promised them by the end of October 2016. In the meantime, the regulations set out all of the information that they’re going to require for a medicinal licence, which includes things like:
- details of the applicant, including criminal history of directors and officers and their relatives
- prior business experience of directors and officers
- organisation’s financial circumstances (presumably financial reports)
- premises where the activities will happen
- physical security arrangements (fences, CCTV, etc) for the site, and for transport
- site plan and floor plan
- arrangements for secure destruction of product
- contract with the entity that will buy the product
- record-keeping arrangements (ie for tracking of product)
- employment procedures (to ensure staff have criminal checks, etc)
- a complete copy of the Standard Operating Procedures that will be used for the cultivation/production
- a risk management plan
If a licence is granted as a result of this application, there’s a further application for each permit, which requires even more information on the specific product, quantity, etc. Every application you make to Health will cost $5,290 for a licence, and then $1,830 for each permit. However, we estimate the overall cost of preparing an application will run to many times this amount.
Health have made it clear that they expect manufacturers to justify their production volumes by reference to the market, but they have provided little guidance on exactly what they expect. Applications for permits will presumably have to be backed up by evidence of demand.
There’s a complex interaction between this Federal legislation and operations at a State/Territory level.
New South Wales
The NSW Government has chosen to hold its own licence, and will itself produce cannabis product for research purposes. Medicinal cannabis organisations that wish to operate and distribute in NSW must also be licensed by NSW Health under the NSW Poisons and Therapeutic Goods Act.
Queensland have enacted The Public Health (Medicinal Cannabis) Act 2016, which was passed by the Parliament in October 2016. The Act sets out a structure for the distribution of medicinal cannabis via a chain of licenced specialist doctors and pharmacists to patients.
Queensland Health have said that a State permit will be required to manufacture cannabis products in Queensland. According to Queensland Health, conditions that may benefit from medicinal cannabis include MS; chemotherapy induced nausea and vomiting; some types of epilepsy; and some HIV/AIDS related symptoms.
Victoria enacted the Access to Medicinal Cannabis Act 2016 in April 2016, which amended the Drugs, Poisons and Controlled Substances Act 1981.
Under the new Act, an entity with a Commonwealth manufacture licence can apply to Health and Human Services for a Victorian manufacturing licence. A holder of a manufacturing licence can only sell to HHS, who will then distribute via licenced pharmacists and doctors.
Although the Act seems at first glance to be focussed on childhood epilepsy, it does leave open the ability of HHS to license manufacture for other conditions.
Tasmania is in the process of finalising the details of their previously-announced Special Access Scheme: a regulatory framework that will facilitate access to medicinal cannabis and manage State-level cultivation and manufacture licenses.
There is a huge amount of work to be done by anyone hoping to cultivate, produce or manufacture cannabis in Australia. We recommend that you start as soon as possible working on the material that you’ll need to submit to the Federal Health Department as part of your application. Given that the market for medicinal cannabis in Australia is limited by demand, and that the Federal Government has yet to allow export, first-mover advantage in this market will be key.
CCA can provide support for your licence application.