Cannabis regulation in Australia could be about to become way less complex — but an industry expert says the devil will be in the detail

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  • A report into the Narcotic Drugs Act has been tabled in Parliament, recommending a number of changes to the licensing regime regulating the business of medical marijuana and other cannabis products in Australia.
  • The report acknowledged the complexity of the current regulations. Of the 246 cannabis cultivation or research licence applications the government has received since June 2019, just 63 have been granted.
  • However, Cannabis Consulting Australia’s Rhys Cohen told Business Insider Australia that while the report was positive step, we still have to see how it will work in reality.

Cannabis regulation in Australia has taken a step forward.

Last Thursday, a report into the Narcotic Drugs Act (ND Act) was tabled in Parliament, which recommended a major overhaul of the licensing regime for the drug and might see more Australian businesses able to operate in the growing market.

The Review of the Narcotic Drugs Act 1967 Final Report was compiled by Australian National University Professor John McMillan and commissioned by Health Minister Greg Hunt in 2018 to reviewe how effective the law has been in terms of cannabis regulation.

Following three public consultations, the report detailed 26 recommendations around cannabis licensing and the role of the Office of Drug Control (ODC), the government agency that regulates and provides advice on the manufacture, import and export of drugs including cannabis in Australia.

One of the main recommendations from the report was to amend the Act once again to establish a single licence scheme for cannabis production.

In 2016, the ND Act was amended to create a national regime that allowed the cultivation and production of cannabis in Australia under a licensing scheme. The licences however, would be granted separately for cultivation and production (combined), research and manufacture.

The report noted that not only is the three licence structure complicated for applicants, it creates a burden for the ODC as well — a problem that Business Insider Australia has previously highlighted.

“Licence applicants must submit separate applications for each licence, provide information and documents of a similar kind in support of each application and liaise with the ODC (and possibly different ODC staff) on each application,” the report said. “Doubts can arise as to which activities (such as research and product development) fall within each licence category.”

The report called for the creation of a single licence structure that could authorise some or all of the cultivation, production, manufacture and research processes.

“This would enable adoption of a simpler and more streamlined process for licence application and approval,” the report said.

As of June 2019, the ODC received 246 licence applications but only granted 63 (24 medicinal cannabis licences, 16 cannabis research licences and 23 manufacture licences).

The report highlighted that it was “a far higher number than expected” which “points to strong commercial interest in the Australian medicinal cannabis industry.”

Rhys Cohen Director of Cannabis Consulting Australia told Business Insider Australia that while the report was a positive step in terms of cannabis regulation in the country, we still have to see how it will work in reality.

“I don’t want to over-hype it until we know how it will work in practice,” Cohen said. “But it is nice to see a reasonable approach being taken into cannabis regulation in Australia.”

Cohen said the idea of streamlining the licences makes sense, especially since the current licence application process is “non prescriptive” and “quite creative”, with the onus on applicants to explain how they will manage their obligations and responsibilities.

“This means that in practice, everyone’s licence is different already — one person’s cultivation license is very different to someone else’s,” he said.

But he added that the proposal in the now-tabled report will bring both advantages and disadvantages depending on where applicants stand.

“It tends to heavily benefit more sophisticated applicants I would say, and it tends to disadvantage those applicants who think that this is a cookie cutter approach, [and say], ‘hey how much do I need to pay to get a licence?’”

Is ‘cannabidiol’ even a drug?

The report also questioned whether cannabidiol — a non-psychoactive chemical compound within cannabis — should be considered a “drug”.

“Cannabidiol, in a pure form, is not listed (or scheduled) as a narcotic drug in the international drug control conventions to which Australia is a party,” the report said.

Cohen agrees that cannabidiol shouldn’t be classified as a narcotic.

“Clearly cannabidiol, which doesn’t cause intoxication, has no addictive potential [and] cannot be abused in any way, shape, or form – clearly that it’s not a narcotic drug,” Cohen said. “And it seems like McMillan has come around to that argument.

A change in the definition would mean that companies who use cannabidiol in their products would not need to “go through the rigmarole” of getting a separate manufacturing licence from the ODC, he said.

Health Minister Greg Hunt “has accepted all 26 recommendations put forward by Professor McMillan, which broadly aim to reduce the regulatory burden on industry, promote and allow greater flexibility in the administration of the legislation to support industry innovation and development,” according to the ODC.

But as Cohen says, we’ll have to see how this one plays out.

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