Medicinal Cannabis – Cultivation, Production, Manufacturing and Use

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Medicinal cannabis and its cultivation, production, manufacturing, and use are highly regulated in Australia and subject to strict compliance measures.

Medicinal cannabis is also sometimes referred to as medical cannabis or medical marijuana. Of course the cultivation, production, manufacture, and use of medicinal cannabis is a contentious issue because it is based on the marijuana plant, which is also an illegal recreational drug.

Medicinal cannabis and cannabis in general are proven to relieve pain and reduce nausea, as well as having anti-inflammatory and antioxidant properties.

The purpose of this article is to briefly outline the strict regulatory controls applying to the cultivation, production, and use of medicinal marijuana at both the State and Federal levels.

Current Access to and Use of Medicinal Cannabis

In NSW, doctors can legally prescribe medicinal cannabis for their patients. However, before doing so they need approval from both the Commonwealth Therapeutic Goods Administration and NSW Health to prescribe an unregistered cannabis-based product. These requirements were imposed by amendments made to the Poisons and Therapeutic Goods Regulations in 2016. Prior to that, patients could only access cannabis-based medicines by participating in clinical trials.

The purpose of loosening the regulations was to allow seriously ill patients to access medicinal cannabis for treatments like pain relief for cancer, joint destruction suppression for arthritis, and inhibition of brain degeneration for Alzheimer’s disease.

In 2016 the Medicinal Cannabis Compassionate Use Scheme was also established by the NSW Government to provide guidelines to NSW Police about using their discretion to not charge adults with a terminal illness and up to three carers for possession of cannabis not lawfully prescribed if they are registered with the scheme. Currently, NSW residents who are over 18 years old and have a terminal

illness are eligible to be registered with the Scheme. The Scheme does not cover offences related to the supply of cannabis or cannabis products.

Cultivation, Production, and Manufacture of Medicinal Cannabis

The cultivation, manufacture, and production of medicinal cannabis in NSW and Australia-wide is mainly regulated by Commonwealth legislation, including the Therapeutic Goods Act 1989 (Cth) and Narcotic Drugs Act 1967 (Cth), recently amended by the Narcotic Drugs Amendment Act 2016 (Cth). This legislation was passed by the federal parliament in 2016 and provides a detailed regulatory framework for applications for licences and permits for the cultivation, production, and manufacture of medicinal cannabis products for both medicinal use and research. The Office of Drug Control and the Therapeutic Goods Administration (TGA) are the federal regulatory bodies which govern, regulate, oversee, and enforce the medicinal cannabis legal framework. The TGA also makes sure that any manufacturers of medicinal cannabis products comply with Good Manufacturing Practice (GMP).

All medicinal cannabis cultivated and the associated products are subject to tight security and quality control measures. There is a licensing and permit system in place for cultivation, production, and manufacturing of medicinal cannabis. The following licences can be granted:


  1. Medicinal Cannabis Licence, authorising cultivation or production or both;
  1. Cannabis Research Licence, authorising cultivation and/or production for research purposes;
  1. Manufacturing Licence, authorising the manufacture of a cannabis drug or product.


Before you begin any activity under any of the above licences, you are also required to obtain a permit which sets out various restrictions on the implementation of the licence, including the types and quantities of cannabis that can be cultivated, produced, or manufactured under the licence.

In order to successfully obtain a licence or permit to cultivate, produce, or manufacture medicinal cannabis and its associated products, you must pass a ‘fit and proper person’ test. After paying an initial application fee and lodging the application with the Office of Drug Control, an assessor will consider your criminal

history, financial viability, business history, and capacity to comply with licensing requirements. Even if you are granted a licence or permit, there are ongoing fees payable and compliance checks to ensure that you have adequate security measures in place and that you are complying with the licence or permit. Providing sufficient security to properly secure a cultivation site is quite burdensome for applicants, particularly securing crops against theft by black market operators.

It is also important to remember that there are strict regimes in place for international import and export of medicinal cannabis which are not discussed here.

The Industrial Hemp Licence Distinguished from the Medicinal Cannabis Licence

In New South Wales it is also possible to obtain an industrial hemp licence under the Hemp Industry Act (NSW) 2008. This licence effectively allows farmers to grow low-THC hemp crops for fibre, seed, and oil production while limiting any risk to drug law enforcement. The NSW Department of Primary Industries (NSW DPI) regulates and oversees this low-THC licensing regime. It is important to note that this regime is separate and distinct from the medicinal marijuana regime. We will cover industrial hemp regulation in a future article.

Possible Future Developments

There is currently an extremely tight regulatory regime covering the cultivation, production, manufacture, and use of medicinal cannabis. Whether there will be future further loosening of the regulatory controls implemented by both state and federal governments remains to be seen. However, with pressure being placed on governments by both lobby groups and the general public, I believe there will be further loosening of the regime as more is understood about the use of medicinal marijuana as a natural remedy and pain management treatment.



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Raea Khan Circle
Director Lawyer
Raea Khan

Raea is Managing Director and Principal Lawyer for PBl Law Group. Raea assists clients with major projects, property developments, construction and strata law.

He has worked in Western Australia and Queensland assisting with expansion projects in the energy and resource sector and now predominately advises clients in Strata and Community Association matters.

He is a member of the Australian College of Strata Lawyers where majority of his work is advising developers and owners corporations with dispute related minor and major defects, strata governance and common property litigation. He is proficient at leading negotiations and meetings.

Raea has a particular interest in the commercial aspect of any dispute and always tries to weigh up the risk, reward and benefit of legal proceedings at each different stage.

Raea enjoys all forms of competitive sport, including Crossfit and actively participates in Triathlons, representing Australia as an age group athlete. He was a member of Red Head Surf Lifesaving club.

  • Strata Law
  • Construction & Major Projects
  • Commercial and Business Law
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