Kristin Wilson, Senior Associate at Bell Gully, discusses the possible impact of implementing the Misuse of Drugs (Medicinal Cannabis) Regulations 2019 which will come into force on 1 April 2020, ahead of her presentation at the upcoming Medicinal Cannabis: Legal Issues seminar where she will delve into legal advice for cannabis businesses.
The Misuse of Drugs (Medicinal Cannabis) Regulations 2019 will come into force on 1 April 2020, opening up new avenues for patients to access medicinal cannabis, and new opportunities for business.
The purpose of the new regulations is to enable the research, manufacture, and supply of medicinal cannabis products and related ingredients, and the cultivation of cannabis for the products and ingredients, by providing for:
- a minimum quality standard for cannabis, ingredients and products; and
- a licensing regime that ensures that cannabis intended for other purposes is not cultivated or supplied under the guise of this purpose.
Currently in New Zealand cannabis is a class B controlled drug, and ministerial approval is required to prescribe, supply, or administer it. There are 20 companies licenced in New Zealand to grow cannabis for research purposes, with 238 growing industrial hemp. Medical practitioners can prescribe cannabis products, however patients can only obtain these prescribed products from overseas, which is a considerable barrier to prescribing and obtaining these products. In December 2018, the Misuse of Drugs (Medicinal Cannabis) Amendment Bill came into effect, which paved the way for the upcoming regulations, while also making people requiring palliative care eligible for exemption from prosecution for possessing illicit cannabis, and ruling that cannabidol (CBD) products containing up to 2 percent of other cannabanoids are no longer controlled drugs, but rather medicines regulated under the Medicines Act.
The new medicinal cannabis scheme will allow for greater access to medicinal cannabis products, and new opportunities for cultivation and research. Medicinal cannabis products are defined in the regulations as either dried cannabis, or derivatives of cannabis in pharmaceutical dosage form, which have therapeutic purpose. The products must not contain other prescription medicines or other controlled drugs, and the scheme does not include medicinal cannabis products manufactured from synthetic cannabinoids. Medicinal cannabis products cannot be in a form intended for smoking, a food, or be in sterile dosage form (for example eye drops).
All medicinal cannabis products (including products that meet the definition of a CBD product) are to be prescription medicine. From 1 April, all medical practitioners can prescribe approved medicinal cannabis products, or unapproved products that have been assessed by the Ministry of Health as meeting the relevant quality standard without ministerial approval.
The licensing regime will allow people to apply for a single overarching medicinal cannabis licence, under which it will be specified what activities can be undertaken pursuant to the licence (with each activity subject to its own application and fees). Activities that may be permitted under medicinal cannabis licences include:
- Possession for manufacture
There are strict rules that dictate how each of these activities can be conducted.
The regulations place considerable emphasis on security, and that there will be extensive record keeping obligations, stocktake obligations and audits. Applications for licenses must detail arrangements for physical security, procedural security, and the security of staff members. Licence holders will be required to effectively guard against the risk of misuse for unlawful purposes, and it will be difficult for applicants to obtain licenses if they have any previous drug convictions.
The medicinal cannabis scheme offers considerable opportunities for New Zealand businesses, and may stimulate the New Zealand economy as a whole, as well as offering patients the opportunity to more safely, easily, and cost-effectively access medicinal cannabis products. There will however be several key issues that businesses in this space will need to have at front of mind.
In particular, businesses will need to consider intellectual property implications as this industry grows in New Zealand. Businesses will need to have an overall plan and strategy in place for how intellectual property will be managed, from trade marks to patents, to plant variety rights applications. It will be important for business to adequately protect their own rights, as well as ensuring that they do not infringe on the rights of any existing operators in the local or international medicinal cannabis industry, many of which will be large, well-resourced, and protective of their intellectual property rights.
In addition, it remains unclear how these regulations will be managed and enforced in practice, including how licence applications will be determined, and the extent of any auditing that may occur. This uncertainty gives rise to risk. All businesses operating in this space will need to give considerable thought as to how they will demonstrate diligence and compliance with the terms of their licences and the spirit of the medicinal cannabis scheme.
It is estimated that the global cannabis market will be valued at USD$66 billion by 2025, and there have been estimates that the national medicinal cannabis national market in New Zealand could be worth NZD$1 billion. While there is still considerable uncertainty as to how the medicinal cannabis scheme will operate in New Zealand, there are opportunities for businesses to grow and succeed in this space.
Kristin is an experienced litigator with particular expertise in advertising, food law, privacy (including cyber security), media law and intellectual property. She prides herself on providing pragmatic, commercial and timely advice to clients.
She advises on a wide range of food law issues, including marketing, export and import requirements, and regulatory compliance including advising on the Food Standards Australia New Zealand (FSANZ) Code, the Food Act, the Wine Act and related regulations and industry codes. She regularly assists clients with product formulation and labelling queries, advertising and marketing considerations and contractual issues including licensing and complex distribution agreements.
Kristin is also very experienced in advising national and international clients on privacy law and data protection issues.
In addition, Kristin provides general advice on commercial and contractual disputes and litigation with successful outcomes for her clients.