Medicinal cannabis workshops shine light on licensing for industry

In February, the Ministry of Health facilitated industry and stakeholder workshops across the country to introduce New Zealand's Medicinal Cannabis Scheme.

In February, we attended the Ministry of Health's Auckland workshop on the Medicinal Cannabis Scheme. It was a full house at the Jet Park Airport Hotel conference room, with many industry participants and stakeholders – from those just starting out, through to major players like Helius Therapeutics.

Andrea Eng, the Ministry of Health's Manager of Regulatory Practice & Analysis, led the workshop presentation and did well to field a wide variety of questions, from licensing fees to quality standards. The workshop included:

  • Background to the scheme

  • Context: international and New Zealand

  • Misuse of Drugs (Medicinal Cannabis) Regulations 2019

  • Licensing framework - Who can get a licence? - Activities - Fees

  • Cultivation activity

In this post we will share with you the slides covered in the main industry and stakeholder workshops with commentary.

The Ministry went through the background to the Scheme and the various steps that have led New Zealand to the forthcoming enactment of new regulations.

In December 2017, the Government committed to establishing a Medicinal Cannabis Scheme (the Scheme) to improve access to quality medicinal cannabis products through:

  • Establishing a licensing regime to enable the commercial cultivation of medicinal cannabis and the manufacture and supply of medicinal cannabis products in New Zealand; and

  • Setting quality standards for medicinal cannabis products to give prescribers, consumers and export markets confidence that the medicinal cannabis products available meet minimum standards of quality.

Without doubt, the Scheme is designed to help kiwi patients gain access to affordable, quality medicinal cannabis products. This will be achieved by establishing a new industry in New Zealand and supporting regulations to allow the cultivation and manufacture of locally-made cannabis products.

Quality standards have been set to ensure patient safety and to support prescribers.

New Zealand must follow the rules set out in the Single Convention, an international scheme that governs 'narcotics', including cannabis. This requires the New Zealand Government to establish a medicinal cannabis agency, within the Ministry of Health, to administer the licensing regime, oversee quality standards and ensure prescribers are informed about medicinal cannabis.

There are three key components to the regulations, which come into effect on 1 April 2020.

The Ministry made it clear, there will be no crossover between industrial hemp licenses and medicinal cannabis licenses. Industrial hemp must not be cultivated for the production of cannabis products. Only licensed medicinal cannabis companies can produce cannabinoid APIs, including CBD.

The Regulations provide for a single medicinal cannabis licence which authorises the licence holder to carry out one or more of the following types of licensed activity:

a) a cultivation activity

b) a nursery activity

c) a research activity

d) a possession for manufacture activity

e) a supply activity

You must apply for a medicinal cannabis licence and at least one of the above activities.

You can choose whichever activity or combination of activities for which you wish to be licensed. The licensing framework enables you to submit a single application to conduct multiple activities, with the intention of reducing the overall administrative burden on applicants.

To gain and maintain a cultivation license, the company (or individual) must be able to prove they have a purchaser for any product they produce. This is to avoid wasteful oversupply and mitigate diversion.

A nursery license can be used to breed cannabis cultivars, sell clones or seedlings to licensed producers or operate a cannabis seed bank.

The medicinal cannabis licence is valid for one year from the date of issue and may be renewed on application. The activities authorised under the medicinal cannabis licence will be valid for the period of the licence. This means that an activity that is added to the licence at the time the licence is issued is also valid for one year. You can apply for activities to be added to your medicinal cannabis licence at any time during the one year licence period, but the activities will only be authorised for the duration of the licence period, unless renewed.

To hold a licence, you must be 18 years or older and live in New Zealand. Ministerial approval is required to issue a licence if you have had a conviction under the Misuse of Drugs Act 1975; or have had a licence issued under the Misuse of Drugs Act 1975.

At least one activity must be included in an application for a medicinal cannabis licence. Further activities can be added once the licence has been issued but will only be covered by the licence for the remainder of the duration of the licence.

The medicinal cannabis licence can cover:

  • one activity at one site only; or

  • one or more activities at the same site; or

  • one or more activities at different sites.

Consideration of an application involves assessment of the activity and an assessment of the site (including an inspection of the site to verify security arrangements). A separate application is required for each activity and/or for each site.

The initial check is to confirm that an application appears to be in order. Incomplete applications will be returned and you will be advised that a new application will be required.

The fee for the initial check must be paid when the application is submitted. If the initial check verifies that the application appears to be in order then you will be invoiced and must pay the full application fee before your application can be considered.

During the assessment of an application, the Agency may need additional information and clarification. If further information is requested, a licence cannot be granted until that information has been provided and the Agency is satisfied that all concerns have been addressed.

The application fee is calculated on the cost of the medicinal cannabis licence plus the cost for each activity.

For example, if someone applies for a new licence for a cultivation and supply activity, they must initially pay $300 for the initial check of the application. If the initial check confirms that the application appears to be in order, the applicant must then pay $12,550, comprising –

(a) $2,250 for consideration of the new licence; and

(b) $10,300 for consideration of the 2 new types of licensed activity ($4,750 for

the cultivation activity + $5,550 for the supply activity).

If the application is for supply of a new dosage product, the applicant must also

pay a further $13,400. All amounts exclude GST.

Once you have submitted your application form and paid the required fee, your application cannot be altered. If you become aware that changes are needed, then you need to discuss those changes with the Agency. Minor changes such as correction of a phone number or misspelt address details may be allowed, however if you want to make substantial changes such as changes to site information that may affect the outcome of the consideration you may be asked to submit a new application and to pay the relevant application fee again.

The application fee is non-refundable.

This activity covers the cultivation of cannabis for therapeutic use, including growing, harvesting and drying cannabis plant material. It also envelops:

  • Procurement of cannabis: from a holder of a medicinal cannabis licence that authorises its supply no more than 50 seeds and 20 plants from each holder of a licence issued under the Misuse of Drugs (Industrial Hemp) Regulations 2006 that authorises its supply no more than 50 seeds and 20 plants (from any source) of a variety of cannabis that is established in New Zealand and that the applicant has declared under regulation 35 import under a MoDA licence to import controlled drugs.

  • Production of starting material, including by harvesting or drying cannabis.

  • Supply within New Zealand to a person who is authorised to receive it.

  • Possession of cannabis.

Activities are usually site specific. If you intend to conduct licensed activities at more than one site, a separate application must be submitted for each site.

The following information is required for the site at which the activity will be carried out:

  • Physical address.

  • Legal description and area of land and premises.

  • Geographical coordinates for the site.

  • A plan or map, if required to identify the location.

  • Attach a geographical plan of the site showing those areas where the cannabis is proposed to be grown or stored. Provide a full description of the geography of the cultivation area, including natural features, structures (for example, fence lines, buildings or sheds), roads or paths present.

It would also be helpful to include clearly marked maps and Land Information New Zealand (LINZ) photographs of the site showing:

  • The property with GPS coordinates marked.

  • Fence lines.

  • Roads, buildings, residences and any publicly accessible areas.

  • Storage and processing areas.

  • The paddocks, blocks or glasshouses intended for cannabis cultivation.

For buildings, include details of the nature of the construction of the facilities, access points such as windows and doors, and restricted areas of access. Floor plans and photographs of the buildings and facilities (if relevant) should also be included.

You must ensure that your application includes details of the security arrangements in place to minimise the risk of diversion of cannabis to illicit use. The Agency will take into account a range of factors in determining whether your security arrangements are adequate for the activities you wish to undertake.

This includes, but is not limited to, the nature and size of the crop, physical site security, operational procedures and personnel security arrangements.

Manufacturing medicines is a complicated business, requiring advanced licensing and GMP certification for production. It's expected that very few companies in New Zealand will have the resources and capability to manufacture cannabis medicines.

However, vertically-integrated companies like Helius will offer contract processing and manufacturing services to other business who wish to cultivate only. This means, supply arrangement can be entered into where Helius will extract and manufacture products to another company's requirements.

Today, prescribing medicinal cannabis remains highly restricted, particularly for products containing THC.

After 1 April, doctors will have much more scope to prescribe cannabis medicines, including New Zealand made products, and THC products that have been assessed as meeting the quality standards.

Current product importers will be required to prove their products meet the new standards before doctors can prescribe them, after 1 April.

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