Mutterings within Australia’s legal marijuana industry have grown over the last 12 months against the red tape perceived to be at the heart of why the local industry is growing so much more slowly than in other countries, such as Germany.

Industry, health and policy people voiced these mutterings to a statutory review between February and April, with the main demand being for change to the complex licensing system.

Twenty organisations and people proposed a shopping list of changes for the report, due on October 29, to include or discard.

Almost all of the 17 public submissions identified burdensome regulation as the key issue they want changed.

“Anecdotal evidence, along with data available, is indicating a sector that is overwhelmed at every level,” said LeafCann, a company looking to list over the next 18 months.

“While there has been improvement over the last 12 months this is still a major concern for those in the sector, that there is still some way to go before Australia has an efficient and effective regulatory system in place.”

What the review covered

The review, led by Australian National University Professor John McMillan AO, looked at the efficiency around the licensing and permitting regimes, the general red tape burden, and whether the compliance and enforcement processes were appropriate.

It did not consider patient access or whether the Pharmaceutical Benefits Scheme (PBS) should subsidise medical cannabis, recreational use, State and Territory regimes, or drug registration.

The carve-outs were scorned by United in Compassion (UIC), a patient access organisation whose data was cited by several other submitters.

“This we believe to be nonsensical – and an attempt by officials to limit the damage and embarrassment such a Review Process may cause by casting light upon what has been, from the outset, disastrous legislation and execrable public policy causing untold damage to sick Australians,” the UIC submission opened with.

Of course, a number of submissions pressed for the review to incorporate one or more of these.

It also outlined what applicants are paying for the privilege of working with medical marijuana: $27,380 a year for a licence, $5040 per licence application, and $1830 for a permit application, the certification that allows commercial or research activities to actually start.

Permit/licensing system

The key issue for the corporations offering opinions to the review was the licensing system, a process that can take up to two years from application to receiving certifications that will allow them to grow or manufacture product.

Currently companies must apply for a cultivation licence to grow, an R&D licence to undertake research, and a manufacturing licence if they want to make products. In order to start commercial operations they also need a permit.

Industry bodies want existing licence holders to get priority for new applications and licence changes.

Tasmanian Alkaloids summed up the key friction points:

  1.  Pre-screen applications to free up the broader application system.
  2. Create a risk based assessment system to allow companies to make minor changes to the licences or permits, without having to go through the whole process again.
  3. Trim the three licences into a single certificate to remove duplication of processes and the information required for each application.
  4. Nix the requirement to give specifics on the number of plants and naming individual plants by strain name and source, and replace that information with simply the amount of active ingredient in the plant “to allow transparency of reporting across all licence holders”.
  5. Allow sub-1 per cent THC cannabis seeds to be grown under a hemp licence, but let growers and manufacturers still use the leaves if they have a medical cannabis licence.
  6. Let licensed manufacturers apply to hold Schedule 9 materials where there is clear evidence of a link to medical research and potential commercial opportunity.
  7. Use a risk based approach to supporting information for an application or variation submission. If it is not critical to the approval of the application the company should get 10 business days to deliver it without incurring the current 30 days reset before any further review.
  8. Once an entity has shown adherence to monthly reporting for a trial period, allow an option to move to quarterly reporting.

Sydney University’s Lambert Institute added there should be minimum turnaround times for applications, each one should have a case manager to avoid applicants having to deal with multiple people, and there should be an online portal through which applicants can share information with the Office of Drug Control (ODC).

Industry lobby group Medical Cannabis Industry of Australia (MCIA), which consists of Althea (ASX:AGH), Cann Group (ASX:CAN), AusCann (ASX:AC8), Cronos Australia, MedCann, Med Releaf, THC Global (ASX:THC) and LeafCann, said its members had problems with the ODC’s lack of transparency; the inability to track the progress of a submission and online portal; and the lack of timelines as the TGA has.

“The Narcotics Drugs Act [the legislation that manages the medical cannabis industry] is also being operationalised in isolation,” MCIA said.

“There is no recognition that the industry operates in a well-established regulatory framework which is proficient in dealing with controlled good phyto pharmaceuticals (e.g. poppies and thebaine).”