New Medicinal Cannabis License Framework

This article applies to organisations that hold a medicinal cannabis licence under the Narcotic Drugs Act 1967 (Cth).

Narcotic Drugs Amendment (Medicinal Cannabis) Act 2021 (Cth)

Narcotic Drugs Amendment (Medicinal Cannabis) Regulations 2021 (Cth)

On 25 December 2021 the Narcotic Drugs Amendment (Medicinal Cannabis) Act 2021 (Cth) (the Amending Act) amended the Narcotic Drugs Act 1967 (Cth) (the Act).

To coincide with the commencement of the Amending Act, on 25 December 2021, the Narcotic Drugs Amendment (Medicinal Cannabis) Regulations 2021 (Cth) (the Amending Regulations) amended the Narcotic Drugs Regulation 2016 (Cth) (the Regulation).

The key changes introduced by the Amending Act and the Amending Regulations are discussed below.

New definitions of ‘cannabis drug’ and ‘narcotic drug’

Importantly, a new definition of ‘cannabis drug’ and ‘narcotic drug’ has been inserted in the Act. A cannabis drug means:

  • cannabis; or
  • cannabis resin; or
  • extracts of cannabis; or
  • tinctures of cannabis; or
  • another drug that includes, or is from, any part of the cannabis plant.

A narcotic drug means a drug other than a cannabis drug.

The terms are defined to clarify that there is now a new separate single licencing scheme in the Act that deals exclusively with the cultivation and production of cannabis and cannabis resin for medicinal and scientific purposes.

A new definition of permitted supply has also been introduced to the Regulation to ensure that cannabis that is manufactured will be used for the appropriate medicinal or scientific purposes.

Single medicinal cannabis licence

Under the previous framework, an applicant was required to submit separate applications for each type of licence they wish to acquire. The Amending Act consolidates that licensing structure into a single licence structure. Importantly, the single licence does not permit every licence holder to cultivate, produce and manufacture.  Rather, each licence will specify the activities which are authorised. Licensees will also still require a corresponding permit.

Application requirements for medicinal cannabis licence and permits

Organisations should be aware that there are new prescribed information requirements, under regulation 5, when making an application for a medicinal cannabis license. The following details must now be provided:

  • the physical security of the supply, delivery and transportation of cannabis plants or drugs;
  • the establishment of arrangements with emergency services in the event of loss, theft, spoilage and disposal of the cannabis plants or drugs;
  • measures in place to ensure suitable employment of persons engaged in taking out activities under the licence;
  • if the organisation intends for the licence to be used for medical or scientific research, that is for a non-commercial purpose, the organisation must state the intended primary purpose, source of the funds for the research etc.

Importantly, if the organisation intends to manufacture a cannabis drug, additional information must be given about:

  • the clinical trial to which the drug has been supplied;
  • the approved authority for the supply of the drug;
  • details of license holder that drug is supplied to;
  • details of hospital that drugs is supplied to, etc.

Medicinal cannabis licence conditions

A medicinal cannabis licence is now subject to new conditions under regulations 17 to 17F of the Regulation. Organisations who are medicinal cannabis licence holders should ensure that they:

  • only use seeds, cultivars or other genetic material of a cannabis plant obtained in a way that is permitted by the laws of Australia;
  • comply with any written information requests from the Secretary of the Department of Health (Secretary) within the specified time frame;
  • retain records for authorised activities under the licence;
  • notify emergency services of the premise’s address and contact details of person authorised to undertake activities under the licence;
  • give to the Secretary, before the commencement of a first time licence activity, the name, position, phone number and email address of a contact person from whom information may be obtained;
  • operate in accordance with risk management plan and standard operating procedures;
  • maintain a system of security.

Notifications to the Secretary

It is important to note that amended regulation 20 of the Regulation now requires a licence holder to notify the Secretary within 24 hours (starting when the matter comes to the attention of the licence holder) for the following listed matters. (Previously the requirement to notify was within 72 hours):

  • a security breach, a suspected security breach, an unauthorised access or a suspected unauthorised access, in relation to the location, premises or facilities covered by the licence;
  • a theft, or a suspected theft, of cannabis plants, cannabis drugs or starting materials in relation to such drugs from the location, premises or facilities covered by the licence;
  • a loss, or a suspected loss, of cannabis plants, cannabis drugs or starting materials in relation to such drugs at the location, premises or facilities covered by the licence;
  • a discrepancy, or a suspected discrepancy, in the number or quantity of cannabis plants, cannabis drugs or starting materials in relation to such drugs in the possession or under the control of the licence holder;
  • a loss, or a suspected loss, of cannabis plants, cannabis drugs or starting materials in relation to such drugs in the possession or under the control of the licence holder, other than at the location, premises or facilities covered by the licence, including during transportation of the cannabis plants, cannabis drugs or starting materials;
  • a serious incident involving cannabis plants, cannabis drugs or starting materials in relation to such drugs in the possession or under the control of the licence holder during transportation of the cannabis plants, cannabis drugs or starting materials.

Where an adverse finding or a recommendation, relating to security matters, made in a security audit report or other report relating to the location, premises or facilities covered by the licence has occurred, the licence holder is now required to notify the Secretary within 20 business days starting on the day the licence holder is notified of the finding or recommendation.

Where the licence holder has been notified that a Commonwealth, State or Territory agency has commenced to inquire into, or investigate, any actions, conduct or activities relating to the location, premises or facilities covered by the licence; the licence holder must notify the Secretary within 20 business days starting on the day the licence holder is notified of the inquiry or investigation.

New conditions of a medicinal cannabis license

Organisations should also be aware that under new section 10H of the Act, it is a condition of a medicinal cannabis license to allow an authorised person to enter the premises to inspect and monitor the obtaining, cultivation, production, manufacture or activity of medicinal cannabis. Additionally, new section 10JA places an obligation on the organisation to not supply cannabis drugs other than for the permitted supply granted under the licence.

New offences

New section 11EA prohibits a license holder from manufacturing a cannabis drug for an unauthorised purpose. A breach of section 11EA incurs a sanction of imprisonment for 10 years or 600 penalty units (currently $133,200) or both.

Finally, new section 11EB prohibits a person who manufactures medicinal cannabis from breaching a condition of a medical cannabis license. A breach of section 11EB incurs a sanction of imprisonment for 10 years or 600 penalty units (currently $133,200) or both.

Conclusion

In light of the new definitions of ‘cannabis drugs’ and ‘narcotic drugs’, organisations should update their relevant policy applicable to medicinal cannabis drugs to include these new definitions. In addition, organisations should update their systems to ensure relevant staff comply with the new obligations discussed above.


Contact

For further information please contact the Law Compliance team:

Phone: 1300 862 667

Email: info@lawcompliance.com.au

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