The commencement of the Narcotic Drugs Amendment Act 2016 on 30 October, 2016 marks a milestone in health and medicine in Australia with the legalisation of medicinal cannabis for use in the treatment and management of painful and chronic conditions.

It is the culmination of years of work by advocates – both in the medical profession and in the wider community – to legalise the cultivation of cannabis and manufacture of cannabis products and research relating to medicinal cannabis.

The Narcotic Drugs Amendment Act 2016 (C’th) (“the NDA Act”) was assented to on 29 February, 2016 and the substantive provisions will commence on 30 October, 2016.

The NDA Act achieves various objectives:

  1. It gives effect to Australia’s obligations under the Single Convention. Australia has been a party to the Single Convention on Narcotic Drugs (1961)(“the Single Convention”) since 22 November, 1972.The Single Convention requires, amongst other things, that parties to the Convention legislate to limit exclusively to medical and scientific purposes the manufacture, export, import, distribution of, trade in, use and possession of the drugs identified in the Single Convention, including cannabis. It also mandates particular matters which that legislation must cover.
  2. It establishes licence and permit schemes for:
    (a) the cultivation of cannabis plants and the production of cannabis resin for medicinal purposes or for research relating to medicinal cannabis; and
    (b) the manufacture of narcotic drugs identified in the Single Convention, including cannabis
  3. It appoints the Secretary of the Department administered by the Minister administering the National Health Act 1953 to ensure that the NDA Act is being complied with and it creates the position of “authorised inspectors” who will be responsible for monitoring and inspecting licensed activities. The Secretary’s powers will include a comprehensive power to give directions to licence holders and former licence holders and to authorise a State or Territory Government agency to undertake cultivation and production of cannabis and to manufacture cannabis products. (The original Narcotic Drugs Act 1967 (C’th) was administered by the Comptroller and Collector of Customs as appointed under the Customs Act 1901-1966 (C’th)).

Cannabis Licences and Permits

The NDA Act creates 3 categories of licence:

  1. A cannabis research licence;
  2. A manufacture licence (“manufacture” includes the act of manufacture and associated activities, including supply, packaging, transport, storage, possession, control and disposal of the drug); and
  3. A medicinal cannabis licence (i.e. a licence to cultivate cannabis plants or to produce cannabis or cannabis resin, and associated activities as per (2)).

The previous Narcotic Drugs Act only allowed for a manufacture licence.

In all cases involving cannabis, the relevant licence(s) is required. The fundamental test of licence eligibility is the “fit-and-proper-person” test. This test will need to be satisfied by the licence applicant and their relevant business associates. In turn, a corresponding “permit” is also required which will identify the specific activities allowed and will prescribe the conditions applicable to the activities authorised by the licence. The primary objective of the permit scheme is to control the quantity of cannabis being produced and to prevent over-production (a key obligation of parties under the Single Convention).

One of the activities which may be authorised under a medicinal cannabis or manufacture licence is that of “supply” – of cannabis plants, cannabis or cannabis resin under a medicinal cannabis licence and of the “drug” containing cannabis or cannabis resin under a manufacture licence. “Supply” includes, whether free of charge or otherwise, by way of administration to, or application in the treatment of a person.

Substantial criminal penalties apply for breach of a licence, including imprisonment for 10 years or a fine of 600 penalty units or both. The NDA Act also provides that any breach is an offence of strict liability carrying a penalty of 60 penalty units, and a further civil penalty for breach of 1000 penalty units.

The NDA Act mandates a review of the Act as soon as possible after the second anniversary of the commencement date, namely 30 October, 2018, and that the report of the review be tabled in each house of Parliament no later than the third anniversary, namely 30 October, 2019.

Other countries which already have medicinal cannabis licence schemes include Israel, Canada and the Netherlands.

Transitional provisions and Regulations

“Manufacturing licences” granted under the Narcotic Drugs Act 1967 prior to 30 October, 2016 will not be affected by the NDA Act and will continue to be governed by the pre-30 October, 2016 law.

The NDA Act allows for Regulations being promulgated and the first Regulation is in place for effective commencement on 30 October, 2016. The Narcotic Drugs Regulation 2016 contains the operating details for the licence and permit schemes established under the NDA Act. It specifies the information and documentation which an applicant and licence holder must provide at various key points – e.g. application for a licence (including details about the land on and premises at which licensed activities may be carried out, risk management, testing of samples, quality standards and the authorising of persons to be engaged by a licence holder in relation to a licensed activity), application for a permit and any variation of a licence or permit. It also deals with the suspension and revocation of a licence or permit, licence surrender and fees. The Regulation does not but subsequent regulations may address matters which arise by reason of the transition from the application of any previous State or Territory laws to the Commonwealth law as it will apply post 30 October, 2016.

Existing State and Territory Laws on Cannabis

The laws in effect prior to 30 October, 2016 which declare that various activities involving cannabis are crimes will be superseded by the NDA Act to the extent that such activities are authorised under the NDA Act. Section 7A of the NDA Act provides that the Commonwealth law effective as from 30 October, 2016 will apply to the exclusion of any State or Territory law not expressly “saved” by any Regulations made under the NDA Act to the extent that the Commonwealth law provides for the grant of a licence authorising the cultivation of cannabis plants, or for the production of cannabis or cannabis resin for medicinal or related scientific purposes or for any other activity expressly authorised under the Narcotic Drugs Act 1967 as amended. The Narcotic Drugs Regulation 2016 does not “save” any existing State or Territory law.

“Medicinal cannabis product” under the NDA Act

The definition for “medicinal cannabis product” under the NDA Act is for a product which includes, or is from, any part of the cannabis plant and, relevantly, “is for use for the purposes of curing, or alleviating the symptoms of a disease, ailment or injury”. Relevantly, there is no reference to “terminal” or any equivalent in the context of the disease, ailment or injury.

State and Territory Agencies

Schedule 2 of the NDA Act contains the specific amendments to the Narcotic Drugs Act 1967 which relate to “State and Territory Agencies” (as defined) which may be expressly authorised by the Secretary to cultivate and produce cannabis plants, cannabis and cannabis resin and to manufacture drugs and narcotic preparations containing any part of the cannabis plant. Schedule 2 does not appear to extend to the conduct of research involving cannabis or cannabis resin by such Agencies.

Use and Prescription of Medicinal Cannabis Products

The use of a medicinal cannabis product originating from overseas or otherwise manufactured from cannabis plants legally cultivated in Australia will continue to be regulated under the Therapeutic Goods Act 1989 (C’th) and existing relevant State and Territory legislation. It is understood that cannabis and cannabis products for medicinal purposes might in the near future be “down scheduled” from being” Schedule 9” (Prohibited Substances) to “Schedule 8” (Controlled Drugs) items as classified under the Poisons Schedule. Morphine is currently a Schedule 8 item.

Until the scheduling of cannabis under the Poisons Schedule is altered from Schedule 9 to Schedule 8, the full intended impact of the amendments under the NDA Act will not be achieved and questions over the legality of prescribing and the use of cannabis for medicinal purposes will remain. In general terms, under existing (pre 30 October 2016) laws in Australia use of cannabis for medicinal purposes is illegal except as available through limited special access schemes and trials. Typically these schemes and trials are only linked to terminal medical conditions. As noted, the definition of “medicinal cannabis product” under the NDA Act is not so restricted. Further, there is no indication that the authorisation to “supply” under either a medicinal cannabis licence or a manufacture licence will extend to the prescription or use of the medicinal cannabis product.