Colin Biggers & Paisley: Hemp Industry Developments In Australia

Australian cannabis growers and exporters welcome recent changes to Australia’s export control laws as the industry eagerly awaits the proposed rescheduling of cannabidiol (CBD) by the country’s Therapeutic Goods Administration (TGA) to allow CBD products to be sold without a prescription.     Authors Brent Van Staden   Jon Meadmore    Damien Gillespie    Joshua Waters   In June 2020, a Bill to amend Australia’s Export Control Act 1982 (Cth) and Export Control Act 2020 (Cth) passed the House of Representatives and the Senate. The Export Control Amendment (Certificate of Narcotics Exports) Bill 2020 broadens the current framework under which government certifies agricultural exports by permitting certification of legitimate exports of narcotic products. The Export Control Acts regulate the export of goods (as defined) from Australia. The Bill updated the definition of “goods” in section 3 of the 1982 Act and section 12 of the 2020 Act to remove the narcotic goods exclusion to read as follows (as amended):  

Export Control Act 1982

Section 3 (definition of goods) Goods means:
  • an animal or a plant, or part of an animal or a plant; or
  • an article or a substance (including reproductive material) derived from an animal or a plant, whether or not in combination with any other article or substance; or
  • food;
but does not include narcotic goods within the meaning of the Customs Act 1901   Export Control Act 2020 Section 12 (definition of goods)   Goods means any of the following:
  • an animal or a plant;
  • an article, substance or thing (including reproductive material) derived from an animal or a plant, whether or not in combination with any other article, substance or thing;
  • food;
  • any other article, substance or thing;
but does not include narcotic goods within the meaning of the Customs Act 1901 While the Bill does not alter or relax the existing export licensing and permit conditions imposed on industry participants, it enables legitimate exports of narcotic goods, including medicinal cannabis and low-THC hemp products, to qualify for Australian government certification. Such certification is required by the importing authorities of many overseas countries, including China, Canada and the United States. It is hoped that the changes will open up these, and numerous other, overseas markets to Australian businesses. In more promising news for the cannabis industry in Australia, the TGA’s Joint Advisory Committee on Medicines and Chemicals Scheduling met in June 2020, following public consultation, to consider rescheduling CBD as an over-the-counter (OTC) medicine.

CBD is currently a Schedule 4 substance which means that it is only available to patients with a prescription. The TGA is currently considering a proposal to reschedule CBD as a Schedule 3 substance. If approved, cannabis products in which CBD comprises 98% or more of the total cannabinoid content will be available OTC without a prescription in pharmacies across Australia for therapeutic use.

It is proposed that CBD products will come with a recommended daily dose of 60 mg or less, in packs containing not more than 30 days’ supply and be available only to adults over the age of 18. In support of rescheduling, the TGA notes that CBD has an acceptable safety and tolerability profile at the proposed 60 mg/day dose and the proposed dose is within the range of dosages seen in CBD products available for retail sale in overseas jurisdictions. The TGA also notes that its Review on the safety of low dose cannabidiol (https://www.tga.gov.au/alert/review-safety-low-dose-cannabidiol) indicated that low doses of CBD may have possible clinical utility in the management of some conditions without medical practitioner oversight. Further, current access controls on CBD in Australia are notably more restrictive than comparable jurisdictions, such as the UK and some US states where CBD is widely available without a prescription.

As of 1 April 2020, only six medicines were registered with the TGA containing CBD as an active ingredient, all categorised as export only medicines.

It is anticipated that should the TGA reschedule CBD, several applications to register new medicines will be made soon after. This is particularly so given the significant M&A and capital markets activity across the Australian and international cannabis industries during the last three years. We have also seen Australian businesses make significant R&D investments to develop CBD products for overseas markets, which supports the view that there won’t be much time lag between rescheduling and new products and brands hitting the Australian market.