What you need to know
- The final report of the review of Australia's medicinal cannabis regulatory framework under the Narcotic Drugs Act 1967 (Cth) was tabled in Parliament on 5 September 2019.
- All of the report's 26 recommendations, which aim to reduce the regulatory burden on the medicinal cannabis industry, were accepted by the Australian Government.
- In this update, we explore the implementation of the 26 recommendations, including the proposed single licence model.
In November 2016, the Australian Government passed landmark changes to the Narcotic Drugs Act 1967 (Cth) (ND Act), allowing for the controlled cultivation of cannabis for medicinal and related scientific purposes.
The changes to the ND Act that were necessary to legalise and regulate medicinal cannabis prescribed that a review of the operation of the ND Act would be carried out during the third year of the operation of the medicinal cannabis scheme. The review commenced in January 2019 and in September 2019, the final report of the review was tabled in Parliament (Final Report).
The Final Report made 26 recommendations, which aim to reduce the regulatory burden on the medicinal cannabis industry (see further details on the current framework and the Final Report's recommendations in our article here). All of the 26 recommendations were accepted by the Australian Government and the Office of Drug Control (ODC) is currently implementing the 26 recommendations of the Final Report two-stage process.
First Stage
The first stage was completed on 1 January 2020, with amendments to the Narcotics Drugs Regulation 2016 (Cth) (Regulation) coming into effect.The amendments simplify the information provision requirements of licence applications and clarify and align terminology used in the Regulation with the terminology used in the ND Act.
Second Stage
The second stage, which will implement the remaining recommendations, has commenced and amendments to both the Act and the Regulation are being considered. The amendments being considered would bring into effect a single licence model which would replace the current three licence structure.
In December 2019, the Australian Government prepared a consultation paper which detailed the proposed single licence model and related reforms and released the consultation paper to the public for feedback.
The consultation paper outlined a high-level design for the proposed single licence model that envisaged the model being flexible, to accommodate licence holders with single sites and those with broader interests and multiple sites. The proposal also envisaged that the licence would authorise an entity to undertake any one or more of the primary activities (ie, cultivation, production, manufacture and research), and also specify relevant ancillary activities (ie, activities that support the conduct of the primary activities) and security arrangements for each site or facility.
The single licence model would require a single medicinal cannabis licence application, replacing the three different application forms currently required. The single form would require the applicant to specify all activities they propose to undertake in relation to cultivation, research and/or manufacture of medicinal cannabis.
Related reforms detailed in the consultation paper include:
- clarifying the meaning of certain terms in the ND Act to reflect the language used in the medicinal cannabis sector (eg, "cultivation" would be clarified to include "harvest", "manufacture" would be extended to include "production", and "research" would be considered both a primary and ancillary activity);
- restructuring the assessment of a medicinal cannabis licence into a 2-step process, to reduce the regulatory burden on applicants and allow the ODC to redirect its resources and achieve efficiencies in licence application processing time; and
- revising the period of the licence to either a perpetual licence or a licence with a maximum 5-year term.
Feedback on the consultation paper was due on 3 February 2020. The Australian Government is considering stakeholder feedback on the consultation paper which will inform the legislative drafting process. Transitional arrangements are expected for existing licences, permits and applications.
Cost Recovery Framework
In addition to seeking feedback on the proposed single licence model and related reforms, in March this year, the Australian Government prepared a consultation paper and sought feedback from stakeholders on the ODC's Medicinal Cannabis Cost Recovery Framework.
The Australian Government charges the non-government sector some or all of the efficient costs of specific government activities. In particular, the ODC implements cost recovery for regulatory activities associated with the direct costs of processing licence and permit applications for the cultivation of medicinal cannabis and the ongoing monitoring and compliance of the regulatory scheme.
The consultation paper outlined proposed amendments to the Cost Recovery Framework, which seek to:
- extend cost recovery to medicinal cannabis manufacture licences;
- amend fees;
- amend annual charges; and
- index fees and charges.
Feedback on the consultation paper was due on 20 March 2020. The Australian Government is considering stakeholder feedback on the consultation paper which will inform amendments to the Regulation and the Narcotics Drugs (Licence Charges) Regulation 2016. The ODC has indicated that it is possible the proposed changes will be implemented with effect from 1 July 2020.
Authors: Anita Cade, Partner; and Caroline Christian, Lawyer.
