Canada: Suggested Adjustments To Increase Australia’s Health-related Cannabis Laws

Introduction

On five September 2019, Professor John McMillan AO’s Final Report (Report) on the operation of the Narcotic Drugs Act 1967 (ND Act) was tabled in Parliament. Section 26A of the ND Act expected the Minister to bring about a critique of the operation of the ND Act to be undertaken.

The Report includes 26 suggestions to the regulatory framework for the cultivation, production and manufacture of medicinal cannabis in Australia.

The critique recognised the value of streamlining  the current regulatory framework to decrease the red tape related with this hugely regulated (but fledgling) market.

 

Background

Australia is signatory to the international treaty recognized as United Nations Single Convention on Narcotic Drugs 1961 as amended by the 1972 Protocol (Single Convention) which was adopted in March 1961. The ND Act implements the Single Convention and establishes the regulatory framework to:

  • to protect against the abuse and diversion of controlled narcotics and
  • to make sure that controlled narcotics are out there for medicinal and investigation purposes inside Australia.

Prior to 2016, cannabis was commonly treated as an illegal narcotic in Commonwealth, State and Territory laws.

The ND Act was amended in February 2016 by the Narcotic Drugs Amendment Act 2016 (Cth) (Amendment Act). The Amendment Act established a national regime for cultivation and production of cannabis for medicinal and scientific purposes, and to facilitate scientific investigation. Importantly, the Amendment Act established a licensing and permit scheme to permit for cannabis provide for therapeutic purposes.

Presently the development of this market domestically is inhibited by the current regulatory framework that limits patient access to medicinal cannabis and the higher price for remedy due to medicinal cannabis solutions not becoming subsidised beneath the Pharmaceutical Rewards Scheme. This has resulted in investment into the Australian market becoming stunted compared to other additional mature markets such as Canada, exactly where medicinal cannabis has been legal because July 2001.

To fuel the market, the Hon Greg Hunt MP, Minister for Overall health announced on four January 2018 that the Federal Government wanted Australia to develop into the biggest exporter of medicinal cannabis in the planet. This lead to the Federal Government releasing the Narcotic Drugs Amendment ( Cannabis) Regulations 2018 (Cth) which permitted the export of medicinal cannabis solutions by amending the Narcotic Drugs Regulations 2016 (Cth).

This adjust focused each international and domestic interest on Australia as a prospective worldwide player in the medicinal cannabis market place.

Regardless of this optimistic step, the current regulatory framework impeded Australia’s prospective in this emerging market.

Minister Hunt has accepted all 26 suggestions place forward by the Report.

 

Important suggestions

Normally the suggestions aim to streamline the application processes and permit for flexibility in the administration of the legislative regime that governs the market. Discussed under are some of the important suggestions that if implemented, will assistance development in this burgeoning worldwide market place.

To take away any obstacles to the cultivation and sale of low-THC hemp solutions

There is a grey location in Australia surrounding regardless of whether Commonwealth laws (like the ND Act) apply to the cultivation and industrial sale of low-THC hemp solutions.

Hemp is a species of cannabis that has low concentrations of THC and consequently has no or low psychoactive impact and is consequently not regarded as a narcotic substance. The Australian hemp market is nevertheless impacted by the existing legislation.

The intent of the Single Convention was to limit access to narcotic drugs to only health-related and scientific utilizes. The Single Convention in fact declares that it does not apply to the cultivation of the cannabis plant exclusively for industrial or horticultural purposes.

Nevertheless the ND Act definitions of the ‘ cannabis plant’ benefits in Commonwealth laws applying to low-THC hemp solutions, in spite of this becoming contrary to the intention of the Single Convention.

The Report recommends that the Australian Government Division of Overall health continue to monitor and advise Government on possibilities (if any) for altering the operation of the ND Act, regularly with the provisions of the Single Convention, to take away any unintended obstacles to the cultivation and industrial sale of low-THC hemp beneath State and Territory law.1

To establish a single licence structure for medicinal cannabis

The existing framework beneath the ND Act is structured so that three separate licences and their corresponding permits are expected ahead of a celebration can lawfully undertake cultivation, production, investigation and manufacture of medicinal cannabis. This multi-licensing structure is not a requirement of the Single Convention.

This method has placed an unnecessary and expensive burden on applicants and licence holders as it requires separate applications, duplication of data and at times many requests for additional data from distinctive ODC employees processing the separate applications. It has also clearly placed considerable burden on the ODC itself. The complicated licensing and permit needs can also lead to ambiguity as to which licence is in fact expected for a certain activity or which licence the holder is expected to comply with provided imposed circumstances might overlap more than the three separate licences.

The Report recommends that the ND Act be amended to establish a new licence structure applying to medicinal cannabis solutions, like for the concern of a single licence to authorise all or some of cultivation, production, manufacture and investigation of such solutions.two

To grant a maximum of 5 years for medicinal cannabis licences (with rights to renew)

In Australia the relevant legislation does not specify the maximum allowable licence or permit term. Nevertheless the Workplace of Drug Manage (ODC) in the previous was only ready to grant licences for a period of no additional than a year but lately that period has been extended but only up to three years.

Additional the legislation does not have a mechanism to renew licences or permits. The only existing possibilities out there to holders to “extend” the term of a licence or permit are:

  • by lodging a fresh application, which is impracticable, expensive and commercially unpalatable or
  • by applying to differ the licence or permit, with no assure that the ODC would agree to such extension.

Though this might not be an concern for tiny medicinal cannabis ventures exactly where investment is ordinarily for a quick term, this is a actual deterrent for prospective investors to commit huge amounts of capital into a project that could only have a maximum term of three years to produce a enough industrial return.

The Report’s suggestions incorporate that the ND Act be amended to deliver:

  • a medicinal cannabis licence, cannabis investigation licence or manufacture licence applying to cannabis solutions shall be granted for a maximum term of 5 years and
  • a licence holder might apply for renewal of the licence at the expiration of the licence term, in accordance with the Narcotic Drugs Regulation 2016three.

In our view, this Report’s suggestions nonetheless do not address investor’s issues provided the quick licence term. A vital concern for economic institutions and private equity is the extended term viability of the enterprise to continue to produce income from the medicinal cannabis facility, and an integral requirement is the longevity of the mandatory approvals.

In our view, finance will be complicated (if not not possible) to get for huge scale export operations provided the quick duration of each the existing and advisable maximum period for medicinal cannabis licences.

The Report notes that a regulator of medicinal cannabis licences ought to be happy that the licensee meets the higher requirements expected by the ND Act to mitigate the dangers of criminal diversion and infiltration. The Report suggests that a re-licensing or renewal method can trigger a reassessment of regardless of whether a licensee is match and correct to continue to hold a licence.

We query regardless of whether this concern can be addressed by a typical audit and reporting method, equivalent to how the casino and liquor licence market is regulated to make sure the suitability of licence holders.

If Australia’s aspiration to develop into the world’s biggest exporter of medicinal cannabis is to be realised, then a additional critique of the licence regime is expected.

Footnote

1 https://www.odc.gov.au/websites/default/files/critique-narcotic-drugs-act-1967-final-report.pdf

2 https://www.odc.gov.au/websites/default/files/critique-narcotic-drugs-act-1967-final-report.pdf

3 https://www.odc.gov.au/websites/default/files/critique-narcotic-drugs-act-1967-final-report.pdf


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