Recently, we discussed the licensing scheme for the cultivation, production and manufacture of medicinal cannabis under the Narcotic Drugs Amendment Act 2016, which is due to commence on 31 October 2016 (read more here).

In anticipation of the Commonwealth scheme, some States have introduced additional instruments which will further regulate the manufacture and supply of medicinal cannabis in their respective jurisdictions. The recently passed Access to Medicinal Cannabis Act 2016 (Vic) and the Public Health (Medicinal Cannabis) Bill 2016 (QLD) are good examples of this. Now, NSW has provided further insight into how medicinal cannabis cultivation, manufacture and supply will be regulated in NSW, by introducing specific amendments to the Poisons and Therapeutic Goods Regulations 2008 (NSW) (“Regulations”), which will commence today.

This comes only shortly after it was announced, on 23 July 2016, that the NSW State Government was the first State to be granted permission from the Commonwealth to cultivate medicinal cannabis plants for research purposes. The permission has been granted in a preliminary effort to investigate the optimal growing conditions which are suitable for the cultivation of cannabis plants for production and manufacture into medicinal cannabis products for therapeutic end use. NSW Minister for Primary Industries, Niall Blair, commented on the significance of this foundational step, which “underpins the potential pharmaceutical supply of cannabis-based medicines made in Australia”.

Furthermore, Mr Blair recognised that this “cultivation research will build the additional evidence required to produce medicinal cannabis in New South Wales to guaranteed safety and quality standards." Initially, these preliminary findings will place the NSW Government in the best position to commence commercial cultivation under the Commonwealth Scheme. In turn, this gives the NSW Government a head start in cultivation; however, the government’s experience in the field is likely to benefit private cultivators in the long term, and expedite the manufacture of medicinal cannabis products and supply to eligible patients in NSW.

To add further momentum to NSW’s progress, the Poisons and Therapeutic Goods Amendment (Designated Non-ARTG Products) Regulation 2016 (NSW) (“Amendment”) has been introduced to “regulate the manufacture, supply and use of medicinal cannabis products …that are not on the Australian Register of Therapeutic Goods as registered goods”. The Amendment provides further clarity on the expectations of manufacturing licensees and the persons who are authorised to supply medicinal cannabis products to patients in NSW.

Notably, the Amendment precedes a Final Decision from the Advisory Committee for Medicines’ Scheduling (“ACMS”) regarding the scheduling status of cannabis for medicinal purposes. In its Interim Decision in April 2016, the ACMS recommended that cannabis should be rescheduled to Schedule 8, from Schedule 9, in order to reduce the restrictions currently placed on access and supply of products containing cannabis in any form.

Despite anticipating such a change, the Amendment will have effect on the regulation of medicinal cannabis while it remains a Schedule 9 substance, and after it is rescheduled as a Schedule 8 substance, to the extent permitted by existing law, which currently permits Schedule 9 substances only to be used for research (and not commercial) purposes. This is enabled by the new Part 4A of the Regulations which specifically regulates ‘designated non-ARTG product[s]’ as defined to comprise medicinal cannabis products and other therapeutic goods which consist of Schedule 8 substances [which are not registered on the ARTG]”.

A medicinal cannabis product by definition under the new section 128C of Part 4A must comprise or contain cannabis, tetrahydrocannabinols or another extract or derivative of cannabis, and not already be registered on the ARTG. Any product comprising or containing a schedule 4 substance (i.e. cannabidiol), nabiximols, hemp seed oil (or another product other than for internal human use) containing 50mg/kg or less of THC, is not a medicinal cannabis product for the purposes of the new Part 4A of the Regulations. In this regard, the current Hemp Industry Act 2008 (NSW) and industry stakeholders operating under that Act are not affected by the Amendment.

The Amendment, as specifically applicable to medicinal cannabis, principally establishes by subsections 128D and 128E that a person may manufacture or supply any designated non-ARTG product, including a medicinal cannabis product, if they possess “a licence or authority under Part 8 or under the Drug Misuse and Trafficking Act 1985”.

Section 18B of the Drug Misuse and Trafficking Act 1985 (“DMT Act”) provides that a person may be authorised to manufacture or supply a product comprising or containing a Schedule 9 substance by the Secretary under the Poisons and Therapeutic Goods Act 1966 (NSW) (“NSW Poisons Act”). However, such authorisation is only available for research or scientific purposes. Alternatively, Part 8 of the Regulations permits licences to be granted for the manufacture or supply of products comprising or containing substances in Schedules 2-8 for any purpose, including research and commercial purposes.

When medicinal cannabis is moved to Schedule 8, persons in NSW will be able to apply for a licence to manufacture or supply medicinal cannabis products under the existing framework in Part 8 for products comprising or containing a Schedule 8 substance. The current application fees for a licence to manufacture, or licence to supply, such products range from $71-$636 and $16-$319, respectively. However, considering that a manufacturing licence under Part 8 of the Regulations may only be granted “under or in pursuance of [the NSW Poisons Act]”, it is unclear whether a manufacturer would require a licence under both the Commonwealth Scheme and Part 8 in order to manufacture medicinal cannabis products in NSW.

The new Part 4A subsequently provides in section 128K that the relevant provisions regarding the packaging and labelling, storage, supply, delivery, record-keeping, administration, loss or theft and destruction of products containing a Schedule 8 substance will apply to all designated non-ARTG products. On this basis, medicinal cannabis will be regulated under the existing NSW framework in largely the same way as Schedule 8 substances.

The new Part 4A also provides some significant provisions which alter the existing framework as it will apply to medicinal cannabis products. For example, the definition of “manufacture” in the new Part 4A includes “compounding”. On this basis, pharmacists and medical practitioners will not be exempt from the requirement to retain a licence or authority under Part 8 or under the Drug Misuse and Trafficking Act 1985 in order to manufacture a medicinal cannabis product, regardless of whether they are operating under the legislative extemporaneous compounding provisions.

In addition, the new section 128F of Part 4A requires medical practitioners (with a licence or authority under Part 8 or under the Drug Misuse and Trafficking Act 1985) to include the specific location from which an eligible patient can be supplied with a medicinal cannabis product on prescription. On this basis, pharmacists may only supply patients with a medicinal cannabis product in accordance with a prescription subject to the existing sections 85-89 and 99, and where the location specified on the prescription specifies the pharmacist’s regular premises.

In conclusion, the Amendment provides additional clarity as to how the medicinal cannabis activities expected to commence under the Commonwealth Scheme after 31 October 2016 will interact with the State regulatory framework affecting manufacturing and supply in NSW. The NSW government’s early foray into cultivation for research purposes gives effect to the Amendment provides a promising indicator of NSW’s preparedness to embrace a medicinal cannabis industry in NSW. In conjunction with the three ongoing clinical trials in NSW investigating the efficacy of medicinal cannabis in the treatment of various serious conditions, NSW is leading the way toward facilitating patient access to medicinal cannabis as soon as possible.