medicinal cannabis

Medicinal cannabis licensing and regulations in a (large) nut shell

The recent scheduling changes to medicinal cannabis, which includes cannabidiol (abbreviated as “CBD”) and tetrahydrocannabinols (“THC”), moving it from Schedule 9 (prohibited substance) to Schedule 8 (controlled substance). This change, coupled with the rapidly evolving legislative changes around both cultivation and patient access to medicinal cannabis, have many Australian cultivator and manufacturing innovators on high alert.

So what medicinal cannabis licensing is required to participate as a cultivator or manufacturer in the fledgling Australian medicinal cannabis market?

Licensing and regulatory overview of medicinal cannabis

This is a fast-changing landscape and it is advisable to seek legal professional advice on current licensing requirements. The following is an overview only.

Approval for cultivation and manufacturing of medicinal cannabis products will be based on patient demand, i.e. therapeutic need. The number of cultivators and manufacturers required to meet likely demand is not yet known.

There are many regulations involved when it comes to cultivating, manufacturing and supplying controlled substances.

International responsibilities

Australia is party to the Single Convention on Narcotic drugs. This is an international treaty to prohibit production and supply of specific drugs except under licenses for specific purposes, the scope of this includes cultivation and manufacture of cannabis.

So, in addition to national and state controls we also have an international commitment to oversee there is no excess of supply of cannabis products.

Therapeutics Goods Act 1989

The role of the TG Act relates to the regulation of the supply of therapeutic goods and works conjunction with state and territory legislation on the access to scheduled substances.

Medical practitioners/researchers are required to adhere to both federal and state and territory Poisons Standard legislation regarding the possession, storage, prescribing and dispensing/supply of therapeutic goods when accessing medicinal cannabis.

Office of Drug Control (ODC)

Commonwealth (Cth) Licenses

In Australia, under the Narcotic Drugs Amendment Act 2016 (NDAA), the Office of Drug Control (ODC) is responsible for requirements for importation, cultivation, production and manufacture of medicinal cannabis products.

Cultivators and manufacturers are required to obtain a licence for the cultivation of cannabis plants and the production of cannabis extracts (for use in the manufacture of medicinal cannabis products, these are referred to as the Cth Licences.

Commonwealth (Cth) Permits

A Cth Licence holder must additionally obtain a permit to either:

  • cultivate cannabis plants: Cultivation Permit
  • produce cannabis or cannabis extract: Production Permit or to
  • manufacture a product containing medicinal cannabis (Manufacturing Permit),

Applicants will be required to provide evidence of the entire proposed supply chain in which their medicinal cannabis cultivation and production activities are intended to operate including quantity and recipients in the supply chain.

Schedule 8 licensing

The Poisons Standard (commonly referred to as the Standard for the Uniform Scheduling of Medicines and Poisons ((SUMP)) revised scheduling for medicinal cannabis take effect in November 2016. The changes in the SUMP will then adopted through state and territory government legislation and specific licenses will be required at State and/or Territory level.

Manufacturing option 1: Pharmacy Supply Scheme

Licensing requirements under the Therapeutic Goods Regulations 1990 (TGR) provides an exemption from the requirement for Good Manufacturing Practice (GMP) for the manufacture of therapeutic goods by a pharmacist (Pharmacy Supply Scheme) for the supply of products to named patient. This scheme cannot be used to manufacture bulk API for unknown patients, i.e. stock.

Manufacturing option 2: API GMP manufacturing license

Manufacturers of active pharmaceutical ingredients (API) in Australia must obtain a GMP license through the TGA and meet the PIC/S, Guide to Good Manufacturing Practice, Part 2 requirement.

There is an exemption under the Therapeutic Goods Regulations 1990 Schedule 7, 2B in which [pharmaceutical products/oils] …. ‘extracted from herb, the sole therapeutic use of which is as starting materials for use by a licensed manufacture.’

Under this exemption a compounding pharmacy (or manufacturing facility) with a GMP manufacturing license would not need to source the API from a GMP licensed API manufacture.


Supply of medicinal cannabis may only be performed by an Authorised Prescriber for named patients, with clinical justification for receiving the product.

Export is not currently permitted.

Supply vs demand

Licensing to cultivate and manufacture medicinal cannabis products will be based on patient therapeutic needs. The number of cultivators and manufacturers required to meet likely demand is not yet known.

Until the supply vs demand ratio is more defined we may see an unwillingness by the ODC, TGA, State and Territories to approve licenses.

The race is on

Whilst innovators race to market it is important we remember that the evidence for the efficacy for medicinal cannabis is both mixed and incomplete and trials to date have been limited due to the scheduling of cannabis.

With initial patient groups including children with severe epilepsy we need to ensure, amongst all these regulations, that providing a safe product is equally important in our supply chain as assurance against excess of supply.

Cannabis legislation and regulations are still unfolding. Please get specific professional advice applicable to your circumstances as the advice above is general only.

Page last updated July 31, 2019.