Title Regulator of Medicinal Cannabis Bill 2014
Database Explanatory Memoranda
Date 08-02-2016 02:50 PM
Source Senate
System Id legislation/ems/s987_ems_c8ebba75-32ee-4174-85e4-f749d8e8b3d8

Regulator of Medicinal Cannabis Bill 2014




















Regulator of Medicinal Cannabis Bill 2014












(Circulated by authority of Senator R Di Natale, Senator I Macdonald, Senator D Leyonhjelm, and Senator A Urquhart)



Regulator of Medicinal Cannabis Bill 2014



1. General Outline


This Bill establishes a Regulator of Medicinal Cannabis (the Regulator).

The Regulator will be responsible for formulating rules for licensing the production, manufacture, supply, use, experimental use and import and export of medicinal cannabis. The Regulator has powers to monitor compliance with this Bill and also to investigate breaches.

The Regulator may approve medicinal cannabis products for inclusion in the register of regulated medicinal cannabis products. Products included in the register are regulated under this Bill, rather than under the Therapeutic Goods Act 1989 (the TGA).

This Bill provides for a system of regulating medicinal cannabis that is entirely separate from the TGA. A number of provisions of the Bill make it clear that the TGA does not apply to things done in accordance with licences or authorisations issued by the new Regulator of Medicinal Cannabis. However, this would not prevent pharmaceutical companies applying to the Therapeutic Goods Administration to sell medicinal cannabis instead of using the scheme established by this Bill. They will effectively have a choice about which system to use (although the cultivation of medicinal cannabis will only be covered by this Bill).

The Narcotic Drugs Act 1967 (Narcotic Drugs Act) provides for a mechanism for authorising the cultivation and production of drugs (including cannabis) in accordance with the Single Convention on Narcotic Drugs. The Tasmanian poppy industry, for example, operates in accordance with the Narcotic Drugs Act, although it is also subject to significant State based regulation. This Bill is designed to be a parallel system for authorising the cultivation and production of cannabis for medicinal use and research.





The Bill is divided into Five Parts:



Clause 2 of the Bill provides for the Bill to commence by Proclamation, with automatic commencement after 6 months if not proclaimed earlier. This delayed commencement is intended to give time for Government to prepare for the establishment of the Regulator, as well as for arrangements to be made with the States and Territories.

The objects of this Bill (set out in clause 3) are to establish a Regulator of Medicinal Cannabis to regulate medicinal cannabis in the way set out in the Single Convention on Narcotic Drugs 1961 (Articles 23 and 28 of the Convention require cannabis to be treated in basically the same way as opium), and to provide for a national system (to apply in participating States and Territories) for regulating the cultivation, production and use of medicinal cannabis. The Bill is based on the treaty implementation aspect of the external affairs power in paragraph 51(xxix) of the Constitution.

Clause 4 contains a simplified outline. While simplified outlines are included to assist readers to understand the substantive provisions, this outline is not intended to be comprehensive. It is intended that readers should rely on the substantive provisions.

Clause 5 contains definitions. Some of the significant definitions are:


cannabis – has the same meaning as in the Convention, and also includes cannabis resin and cannabis plants (within the meaning of the Convention). The Convention defines “cannabis” to mean “the flowering or fruiting tops of the cannabis plant (excluding the seeds and leaves when not accompanied by the tops) from which the resin has not been extracted, by whatever name they may be designated”. The Convention defines “cannabis plant” to mean “any plant of the genus Cannabis”, and “cannabis resin” to mean “the separated resin, whether crude or purified, obtained from the cannabis plant”.


cannabis product – means

(a)       Cannabis, or a product derived from cannabis, that is intended for medicinal use; or

(b)       A synthetic version, that is intended for medicinal use, of a product derived from cannabis.


label –means a display of printed information:

(a)       on or attached to the goods; or

(b)       on or attached to a container or primary pack in which the goods are supplied; or

(c)       supplied with such a container or pack.


manufacture – in relation to cannabis products, means:

(a)       to produce the goods; or

(b)       to engage in any part of the process of producing the goods or of bringing the goods to their final state, including engaging in the processing, assembling, packaging, labelling, storage, sterilising, testing or releasing for supply of the goods or of any component or ingredient of the goods as part of that process.


medical practitioner – means a person who is registered, in a State or internal Territory, as a medical practitioner.


quality – in relation to cannabis, includes the composition, strength, potency, stability, sterility and purity of the products.


rules – defined in clause 64 to allow the regulator to make rules that are necessary to give effect to the Bill. The rules must be consistent with the Convention.


Clause 6 extends the Bill to every external Territory.


Clause 7 provides for the Bill to apply only in participating States and Territories.


The medicinal cannabis system set up by the Bill is to be implemented cooperatively between the Commonwealth and the States and Territories. The States and Territories are likely to have to change their own laws relating to cannabis if they wish to participate.

The Minister may make a determination that a State or Territory that has entered into an arrangement with the Commonwealth to participate in the system is a participating State or Territory. The Ministerial determination is a legislative instrument, but is not subject to disallowance. This reflects the fact that it represents the existence of an agreement between a State or Territory and the Commonwealth.


Clause 8 provides for the concurrent operation of State and Territory law. This Bill is not intended to override State and Territory laws.


Clause 9 is a standard provision that binds the Crown but does not make it liable for an offence, and clause 10 provides for the Minister to arrange with State and Territory governments for those governments to do things under the Bill. Subclause 10(2) is intended to make it clear that the Commonwealth may pay the States and Territories for this. Any such payments will need to come from money appropriated by the Parliament for this purpose (as this Bill does not contain an appropriation).



Part 2 is comprised of seven divisions.

Division 1 outlines the responsibilities of the Regulator which are to maintain a register of approved regulated cannabis products and authorise a licensing scheme for cultivators, producers, authorised users, researchers and importers and exporters.


Division 2 explains how the regulation of medicinal cannabis will operate. The Regulator will create and maintain a register of regulated medicinal cannabis products. To be included on the register, the Regulator must be satisfied that the cannabis product is suitable for medicinal use, that it meets the appropriate standards, and that all designated requirements are met. The register is modelled on the Australian Register of Therapeutic Goods.

The registration process and the register will have a number of rules prescribed for those people applying to be included on the register. The Regulator will have the power to remove or vary registration. 

The Bill leaves detail, such as the manner in which the register is to be maintained, to the rules rather than setting it out in the Bill. The rationale for the register being set out in the rules is to give the Regulator the flexibility to make arrangements appropriate for a new medicinal cannabis industry and to allow the Regulator to align the register with the Australian Register of Therapeutic Goods, as appropriate.

Clause 15 is based on subsection 16(1) of the TGA.


The licensing scheme for medicinal cannabis is outlined in Division 3. Rules prescribe how the scheme will operate for producing cannabis for medicinal or experimental purposes, the transporting of cannabis, its manufacture, and distribution to authorised users. The Regulator will issue licences that allow authorised persons to grow, manufacture, transport or provide medicinal cannabis products. Those people authorised by the Regulator will be provided with a medicinal licence that is subject to strict conditions. The licensing scheme ensures that all standards and regulations are complied with. The regulator is required to prepare and administer the licencing scheme in accordance with the Single Convention on Narcotic Drugs 1961.


Subclause 16(5) allows for cannabis to be produced under a medicinal licence and then used in the manufacture of cannabis‑based medicines that are regulated under the Therapeutic Goods Administration (TGA) instead of under this Bill.

The medicinal licence that will be issued will therefore sit outside of the scope of Narcotics Drug Act and the TGA. This does not stop applications to the TGA in relation to the manufacture of cannabis-based medicines.


The penalties for failing to comply are set out in Division 3. It is important to note that State and Territory criminal sanctions relating to illegal substances and drug use may apply to anyone who misuses medicinal cannabis or contravenes this Bill or conditions of a licence under this Bill. For example, if an authorised cultivator or manufacturer was to sell medicinal cannabis in any way not prescribed by the Regulator, or an authorised user was to sell or supply medicinal cannabis, they would be subject to the criminal sanctions that apply in the relevant State or Territory the offence was committed in.

The Regulator will maintain a register of all licences, however this register will not be a public document and all relevant privacy provisions will apply to the register.


Division 4 creates a scheme for authorised patients, carers and medical practitioners to access medicinal cannabis. Patients and others will be authorised by the Regulator to access and use medicinal cannabis as will carers and medical practitioners. Subject to the conditions and regulations, an authorised carer will be able to assist an authorised person in accessing and using medicinal cannabis.

The Bill is intended to operate in conjunction with medical practitioners, who can apply to the Regulator on behalf of a patient or carer to whom they intend to prescribe medicinal cannabis products.

Division 5 sets out the rules for experimental cannabis licences.

Research and development of medicinal cannabis is a growing field of science. It is important that research into types and strains of cannabinoids and medicinal cannabis be encouraged and furthered by the Regulator. The experimental cannabis licensing scheme will allow authorised persons to develop, evaluate, test and improve cannabis products for medicinal purposes. The Regulator will also be responsible for issuing licences and prescribing a scheme for research and experiments with medicinal cannabis.

For example, an experimental purpose may include experimentation in the development of cannabis products, and varieties of cultivated cannabis, that have reduced psychoactive effects while still having therapeutic effects.


These rules mirror those set out for authorised cultivators and manufacturers, however they also include areas such as experimenting with improved methods of cultivation, evaluating efficacy and safety, improving delivery methods (e.g. how medicinal cannabis is taken by an authorised patient) and performing other clinical trials.

For example, an experimental licence authorising clinical trials of a cannabis product for medicinal use may authorise test subjects to use the cannabis product and staff to possess and administer the cannabis product.

Clause 22 provides for an offence of failing to comply with a condition of an experimental licence, and as with other prescribed rules established by the Act, those failing to comply with the experimental licencing scheme may be subject to state and territory criminal sanctions.

Under Division 6 the regulator may determine standards for medicinal cannabis. These standards are designed to allow the Regulator to specify the quality and quantity of medicinal cannabis and ensure the product complies with recognised characteristics. Prescribing standards means that authorised users of medicinal cannabis will be able to access a labelled and consistent product for use, similar to other available medicinal products. Clause 24 is based on Section 10 of the TGA.

Division 7 provides for the regulator to prescribe a scheme to regulate the import and export of cannabis and cannabis products. The Regulator will be able to issue an export or import licence and maintain a public register of authorised importers and exporters. The importing and exporting of medicinal cannabis will be undertaken in accordance with the Single Convention of Narcotic Drugs, 1961, however as with other Divisions in the Bill, theNarcotics Drugs Act and the TGA will not apply to authorised licence holders.

Clause 26 provides for an offence of failing to comply with a condition of an import licence or an export licence,


Part 3 - Regulator of Medicinal Cannabis


The structure of the Regulator for Medicinal Cannabis as a statutory agency and the arrangements outlined in the Bill are set out in Part 3. The structure is based on similar arrangements for other agencies.


Clause 31 stipulates the functions and powers of the regulator which include entering into contracts with medicinal licence holders, supplying medicinal cannabis products, investigating whether the Act or the rules are being complied with, advising the Minister on matters relating to medicinal or experimental cannabis products, analysing statistics relating to medicinal cannabis products and educating patients and health workers about the use of regulated medicinal cannabis products.


To ensure that the decisions of the regulator are evidence based, clause 32 stipulates that the regulator is not subject to direction from anyone in relation to the performance of its functions or the exercise of its powers. However, the Minister will be able to give directions where necessary to ensure that Australia complies with the Convention.


The Regulator is established under the Public Governance, Performance and Accountability Act 2013. The Regulator will be a listed entity with codified functions and powers, such as a Board, Chief Executive Officer and staff. The Office of the Regulator will comprise a Chair and five other members. The Minister will appoint the Chair and qualified members. As the authorisation of medicinal cannabis necessitates expertise in a number of areas – plant cultivation, pharmacy, medicine, legal implications and criminality – to be a member of the Regulator a person must be qualified or an expert in one of the following fields:

·         Medicine

·         Pharmacology

·         Palliative Care

·         Botany

·         Horticulture

·         Law

·         Law enforcement

·         Advocacy for patients and other users of medical services

The membership must include at least one medical practitioner, one member of the AFP and one person representing patients and users. This provides a balance of interests and ensures law enforcement is at the centre of decision making by the Regulator.

The remainder of this part deals with procedures of the regulator, the role of the Chief Executive Officer and staff and persons assisting the regulator.

Clause 53 stipulates that the regulator may be assisted by officers or employees of a participating State of Territory. This assistance might include keeping the regulator abreast of state legislative developments.


Part 4 - Monitoring and investigation powers

Cannabis is a drug that is not legal in Australian states and territories. As with the Australian poppy industry, cannabis can be used for medicinal purposes as well as being a drug that is not legally available and carries criminal sanctions for cultivation, transport, possession and trafficking. It is necessary that sanctions and penalties apply to any authorised person who abuses or misuses their obligations to the Regulator to provide, supply or use cannabis for medicinal purposes.

Both the public and law enforcement agencies must be confident that there are strict provisions in place so that only those authorised have access to medicinal cannabis and that manufacture and use is conducted under strict guidelines.

The monitoring and investigative powers in the Bill apply only to people authorised by the Regulator to cultivate, supply, import, export or experiment with medicinal cannabis. A person or persons applying to the Regulator for a licence will be advised of the monitoring and investigative powers.

That is why this Bill takes the approach of applying the Regulatory Powers (Standard Provisions) Act 2014 (the RP(SP) Act) to give the Regulator certain monitoring and investigation powers. The RP(SP) Act provides a set of standard powers that other Acts establishing regulatory agencies can apply.

The powers conferred by these provisions, such as search, entry and seizure powers, may appear intrusive; however they only apply to people who have applied to become licence holders or authorised users of medicinal cannabis. The powers in the provisions do not apply to the general public or anyone not licenced or authorised by the Regulator.


Part 5 - Miscellaneous


Part 5 deals with a range of miscellaneous matters, including the process for reviewing decisions, powers of delegation and protections.


A process for reviewing decisions ensures applicants denied a licence (for example, denied an application as a cultivator, exporter or importer or authorised patients or their carer) or who have had their licence revoked or the conditions of their licence altered, the opportunity to appeal to the Administrative Appeals Tribunal (AAT).


The delegation powers are based on standard delegation provisions, except that it provides for the delegation of functions and powers to senior officers or employees in State or Territory governments or government authorities. This is appropriate considering the cooperation that is likely to be required to make the medicinal cannabis scheme work. Subclause (2) does prevent some decisions being delegated as it is reasonable for certain decisions to be required to be made by the board of the Regulator.



Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011


Regulator of Medicinal Cannabis Bill 2014


This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.



Overview of the Bill

This Act sets up the Regulator of Medicinal Cannabis to perform the functions of the agency referred to in Article 23 of the Single Convention on Narcotic Drugs, 1961 in relation to cannabis.

The Regulator may approve medicinal cannabis products for inclusion in the register of regulated medicinal cannabis products. Products included in the register are regulated under this Act, rather than under the Therapeutic Goods Act 1989.

The Regulator may make rules for licensing the production, use, experimental use and import and export of medicinal cannabis. The Regulator has powers to monitor compliance with this Act and the rules, and investigate breaches.

This Act applies only in participating States and Territories. A State or Territory may enter into an arrangement with the Commonwealth to become a participating State or Territory.


Human rights implications

The Bill engages the right to privacy by virtue of the Regulator being required to maintain a register of medicinal licences. The register must not be made available to the public and any deprivation of privacy will be in accordance with the law.

Part 2 of the Regulatory Powers Act creates a framework for monitoring whether provisions of the Bill have been complied with and includes powers of entry, search and inspection. However no provisions limit the acquitted person’s right to a fair hearing.

For the legitimate objectives of the Bill to be fulfilled, a degree of monitoring and compliance is necessary. The monitoring and compliance provisions are reasonable and proportionate to ensure the safe and effective regulation of medicinal cannabis. Notably, these provisions would not apply to the public at large but would be limited to those individuals, organisations or corporations that opted to participate in the medicinal cannabis licensing scheme.



The Bill is compatible with human rights because to the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate.



Senator Di Natale, Senator Macdonald, Senator Leyonhjelm and Senator Urquhart