Medical cannabis became legal in Australia, but strictly controlled from November 2016.

The Narcotic Drugs Act was amended in parliament on 24 February 2016 to permit the legal cultivation of cannabis for the manufacture of medicinal cannabis products in Australia. The Amendment Bill essentially allows licensing and permit schemes to be established for the cultivation and production of cannabis and cannabis resin for medicinal and scientific purposes. Subsequently, the usage of medicinal cannabis was legalized at the federal level on 1 November 2016.

Medicinal cannabis can be prescribed in New South Wales and Western Australia from November 2016. NSW was the first state to have been given approval to grow cannabis under licence from the federal government as part of research into the best way to cultivate the plant.

Doctors are able to prescribe the medicinal use of cannabis without government approval in South Australia from April 2017.

The Public Health (Medicinal Cannabis) Act 2016 was passed by Queensland Parliament on 12 October 2016, and commenced on 1 March 2017.

Victoria has legalized medical marijuana from 2017 for patients with severe childhood epilepsy.

Tasmania will also legalize its use for a broader range of conditions.

To grow medical cannabis legally, you will need to apply for a manufacturer licence and then secure a permit. As explained in the Bill:

A manufacture licence may authorize the manufacture of a drug and activities related to such manufacture, including manufacture for the purposes of research relating to medicinal cannabis products. Before a licence holder can manufacture a drug, the licence holder must obtain a manufacture permit. Permits deal with matters such as the types and quantities of drugs that can be manufactured.   Certain conditions are imposed on all manufacture licence holders and the Secretary may impose additional conditions.

The new industry is regulated by the Office of Drug Control and the Therapeutic Goods Administration with individual states and territories having their own rules about who can prescribe it and which patients can access it.

Cannabis Licenses in Australia

There are three types of licences relating to the supply of medicinal cannabis products available:

  • medicinal cannabis licence authorising cultivation or production or both
  • cannabis research licence authorising similar process for research purposes
  • manufacturing licence authorizing the manufacture of a drug or product.

You need to apply to the Secretary of the Department of Health. The Department will then decide whether to grant, or refuse to grant, the licence.

Licence holders will need to ensure crops are carefully secured and accounted for so as not to be diverted to illicit uses. The Amendment Bill goes into greater detail and is essential reading for anyone who is considering applying for a licence.

Application Process:

  1. Potential growers have to pass is the Office of Drug Control‘s “fit and proper person” test
  2. Another thing the Office of Drug Control will consider is whether or not the business can stay stable and secure. For example, applicant must prove that he’s got agreements with manufacturers that are willing to take the raw cannabis crop and turn it into medical cannabis products.
  3. Additionally, there are strict regulations around how much security the crop will require – while it’s growing, being transported, and even analysed.
  4. The Office of Drug Control also issues permits which strictly outline the type (and quantity) of cannabis that can be cultivated.

As at 23 August 2017, a total of 18 licences have been issued under this scheme: eight medicinal cannabis licences (commercial cultivation and production), five cannabis research licences, and five cannabis manufacture licences. The Office of Drug Control (ODC) has another 49 licence applications under assessment.

Licensing Fees and Charges

The following fees apply to applications received by the ODC for licences and/or permits for the cultivation, production or manufacture of cannabis.

Assessment Fee ($)
Application for a medicinal cannabis licence 5,290
Application for a cannabis research licence 5,290
Application for a manufacture licence 0

In addition to licence fees and inspection fees (an average inspection fee is $7,050), there are statutory charges which are in place to cover non-direct cost recovery of activities associated with licences. This includes the conduct of unannounced inspections, administrative processing of minor operating procedure variations lodged by licence holders, and other activities need to maintain the licencing scheme.

The quantum of charge for a licence is as follows:

  1. for a medicinal cannabis licence – $27,360 for each period of 12 months, or part of a period of 12 months, for which the licence is in force;
  2. for a commercial cannabis research licence – $27,360 for each period of 12 months, or part of a period of 12 months, for which the licence is in force;
  3. for a non commercial cannabis research licence – $27,360 for the period for which the licence is in force.

To get ahead and be prepared for when the country will start licensing cannabis businesses, you should draft a Pre-Legalization Cannabis Company Business Plan so you can see and understand the costs associated with setting up a cannabis business, as well as projected revenues and financials that will allow you to decide whether this venture is for you or not.

See our Cannabis Business Plan Templates page for details and get a business plan to fit your needs and tailored Australian cannabis market projections.