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OPINION: Medical marijuana - where is the regulator?

May 07, 2019

Contacts

Partners Sally McKechnie

Government reform and public policy Public law

In New Zealand right now, there is intense discussion about the wording of the referendum on the personal use of marijuana.

In the meantime, the already-decriminalized part of the industry continues to wait and wannabe medicinal cannabis providers remain in the dark about the likely nature of their regulation.

We have the legislation, so what’s the holdup?

There are whispers that investors have been pouring millions into medicinal cannabis start-ups since the Misuse of Drugs (Medicinal Cannabis) Amendment Act was passed in December last year. The industry is certainty huge overseas, with Canada benefiting from a “green wave” after its law reform.  

However, despite this hype, the industry in New Zealand still lacks definitive guidelines on how it will be regulated.

Licencing scheme delays

Currently, licences can only be issued to cultivate or extract cannabis for medical or scientific research. Commercial cultivation is not permitted. Three companies have now been granted licences to cultivate cannabis for research and development purposes.

The Ministry of Health is developing a “Medicinal Cannabis Scheme” to enable domestic cultivation and manufacture of medicinal cannabis. This will include introducing a licencing regime, creating quality standards for the production of cannabis, and establishing a medicinal cannabis agency. The Scheme aims to remove barriers for patients wanting to access medicinal cannabis, so that health practitioners “will be able to prescribe these products with confidence”.

In terms of timeframes, the Act requires that all regulations be made no later than one year after its Royal assent. The Scheme will therefore need to be in place by 17 December 2019. However, given that the Minister of Health is introducing legislation to repeal and replace the Medicines Act 1981, the passing of regulations creating the Scheme may be pushed further down the agenda.

A loophole?

There is currently what appears to be a loophole in the licensing system: companies have been able to launch their facilities and cultivation processes in the context of scientific research. They may then get a jump on competitors and hit the ground running if and when licenced commercial cultivation is legalised.

An example of this loophole in action might be Ruatoria-based company Hikurangi Cannabis Company - the second to receive a licence to cultivate cannabis for research and development purposes. It indicated to the media last August that it would want to sell cannabis products to the terminally ill, if and when legalised.

Looking forward

Given the amount of investment in this area already, New Zealand is poised to catch the “Green Wave”. However, uncertainty has a well-documented negative impact on investor enthusiasm, and start-ups and investors could be unwilling to make long-term decisions without knowing more. 

But, for now, it remains a waiting game.

Contributors fiona.thorp@simpsongrierson.com