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2013-2014
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
Regulator of Medicinal Cannabis Bill 2014
EXPLANATORY MEMORANDUM
(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.
2. NOTES ON CLAUSES
The Bill is divided into Five Parts:
PART 1 - PRELIMINARY OUTLINE
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
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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.
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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 - MEDICINAL CANNABIS
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
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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
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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, the
Narcotics 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.
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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.
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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.
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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.
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Conclusion
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
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