Medicinal Cannabis Industry

24 Feb | '2021

The Narcotic Drugs Amendment (Medicinal Cannabis) Bill 2021 is relevant to Moncrieff on the Gold Coast not just because of the importance of the pharmaceutical needs of Australians but also because we have a medicinal cannabis facility operating at Southport in my electorate. It’s called the THC Global Group. The health minister visited Moncrieff back in late August in 2019 and we toured that facility. Indeed, we opened that facility. It was great to have the health minister on the Gold Coast at that time.

The medicinal cannabis industry can grow in Australia—that pun was intended; I can see you smiling, Mr Deputy Speaker Gillespie! The industry can achieve better availability of important medicines for patients in Australia. A few statistics: as of 31 December 2020, 151 licences to cultivate, produce or manufacture medicinal cannabis in Australia have been granted since October 2016, 138 of which are currently in effect. Of the licences currently in force, there are 58 licences for cultivation of cannabis for medicinal use, 28 for cultivation for research and 52 for manufacture of medicinal cannabis products.

As I said, in August 2019 the health minister visited THC Global to listen to their industry insights. I welcome their continued success and, of course, the improved regulation of the sector that will be achieved by this bill. There were also the jobs that were delivered by the opening of that plant.

This bill makes a number of amendments to the Narcotic Drugs Act 1967, otherwise known as the ND Act. The Morrison government is delivering in response to the final report of the McMillan review, by Professor John McMillan AO, into the regulation of medicinal cannabis. The government’s approach, as it is in other portfolios, is to maintain the good outcomes which the Australian community expects from regulation, whilst minimising the burden that regulations place on business and other organisations.

The government is implementing a second stage of reforms with this bill which will achieve a more efficient licensing structure in the ND Act, with one licence type rather than three. This is so that industry participants can undertake cultivation, production, manufacture and research under a single licence type. So it’s cutting red tape. The long-term nature of business investment decisions in this area will be recognised with greater certainty in a licensing system. The bill will create a perpetual licence and periodic permit structure for the majority of activities for which a medicinal cannabis licence is required. Appropriate regulatory oversight, of course, will be maintained.

The Morrison government is committed to availability of a safe, legal and sustainable supply of cannabis derived medicines to patients. That’s good news for Australians who need to access those medicines. To achieve that, the Department of Health needs suitable flexibility in administering this legislation, and unnecessary regulations must be removed. This is the kind of reform that makes Australia a better place to live and a better place to do business.

One of the efficiencies introduced in this bill is ensuring that risk assessments are timed right to avoid repetitive processes. Again, this is cutting red tape. Minor amendments to the ND Act will address issues identified through the administration of the scheme and the process of implementation of the recommendations, as I said earlier, of the McMillan review. Other recommendations from the McMillan review are also being implemented administratively and through business process reforms by the Department of Health. This includes reviewing and reforming medicinal cannabis permits issued under the ND Act, which can be done without legislative amendment. The medicinal cannabis industry also supports these changes, as recommended by the McMillan review.

I will just give some background on this bill. The Narcotic Drugs Act 1967 makes provision in relation to narcotic drugs in accordance with Australia’s obligations under the Single Convention on Narcotic Drugs. In 2016, the act was amended to provide a framework for regulating cannabis cultivation, production, manufacture and research, with the ultimate aim of providing Australian patients with access to cannabis for therapeutic purposes. This is really important to a lot of Australians out there who may be suffering from pain.

Those amendments included a requirement for a review of the operation of the medicinal cannabis scheme after two years, and Minister Hunt appointed Professor John McMillan AO to conduct this review, on which he reported in 2019. The review made 26 recommendations, and some of those recommendations were implemented in stage 1 revisions to the Narcotic Drugs Regulation 2016. These amendments are part of stage 2 of adopting these recommendations.

The key change is the adoption of, as I said, a single and perpetual licence. The experience in the first years of the scheme has been that the requirement to have three separate licences to operate an integrated business has created unnecessary duplication. That was outlined to Minister Hunt and me when we visited THC Global Group back in 2019. This is both for industry and for government. While this would have worked well in a highly specialised industry, in reality most cannabis operators are integrated and involved in multiple licence areas.

Some of the recommendations will also be implemented in an alternative way through further changes to the regulation and administrative practice. For example, the recommendation relating to notified variations will be resolved by making the permit simpler and thus reducing the requirement for variations.

Finally, the bill makes a variety of technical and minor amendments to ensure that the administration of the act will be practical. Through the drafting process, some issues with the provisions which were not covered by the review were also identified and some of these will be addressed in the act. Some further issues will be addressed in the regulations themselves.

So the purpose of this bill is to amend the Narcotic Drugs Act 1967, to implement a number of these recommendations. The amendments will take effect on a date to be set by proclamation, but no longer than six months after royal assent. A delay in commencement is required to make the necessary changes to the Narcotic Drugs Regulation 2016 and to prepare administratively for the new framework.

The current plan is for commencement on 1 July this year. However, if passage of this bill is delayed until later, the ability to delay commencement will allow another date to be set. As licences run from various times there’s no critical requirement for commencement to occur from the start of the financial or calendar year. It’s not anticipated that the full six months would be required, and if 1 July is not feasible then another date will be determined at that time. The main change is to adopt, as I said, one single licence—this government is all about cutting red tape—which will make it easier for those in business. There are also some measures which implement other review recommendations as well as some minor amendments to ensure that the framework operates effectively and efficiently.

A question from the Australian public might be: will the changes make it easier for patients to get access to cannabis? At a Commonwealth level, patient access is regulated primarily through the Therapeutic Goods Act 1989, whereas the Narcotic Drugs Act regulates the source material that can be used in medicinal cannabis products. The changes in this bill will streamline and reduce regulatory burden on licences, which will improve the supply of source material. The single licence framework will replace what is currently there, which is three licences under that act. I can’t stress enough how that will make it easier for medicinal cannabis producers to do business in this country. It will basically take away the duplication process for them and make it easier not just for them to do business but for patients to access their products.

I’d like to explain a little bit more about the perpetual licence and what that is. Currently a licence is granted for a fixed period of time, combined with the periods of time required to set up and commence an operation. This has led to the need for licences to be extended even before operations have begun. Reflecting that the licence is more about the suitability of a licence holder and their arrangements and that actual day-to-day activities are controlled by permits, a licence will be granted on a perpetual basis except for particular research licences. Instead of examining whether a licence holder is still suitable to hold a licence at a renewable stage, a continual monitoring and audit process will identify any issues. If necessary, compliance action, including the suspension or revocation of that licence, will be taken. It should be noted, however, that licences that authorise non-commercial research will be time limited.

You might ask what changes will be made to possible supply pathways for manufactured cannabis drugs. Under the revised approach to permitted supplies for manufactured cannabis drugs, such drugs will now be supplied for research other than a clinical trial. That, again, is good news for Australians who may be suffering from pain, and these products will assist them. Licensees will be able to more readily access testing services, reference standards may be developed and supplied, and scientific research which does not involve administration to humans may now be conducted, which is great. However, as per the current legislation, supply to pharmacists for compounding or supply under Special Access Scheme A and supply for therapeutic veterinary use is not permitted.

Just to finish, I will answer the question as to whether cannabis will now be supplied for scientific research. Licensees will now be authorised to supply medicinal cannabis for research purposes such as for reference standards and other research activities where cannabis is not administered to humans. This will reduce the reliance on imported cannabis which is currently being used for these purposes. I support this amendment bill and I commend it to the House.

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