The new just announced regulatory scheme for cannabis based medicines is generally positive. But the government may be significantly underestimating the demand for licenses, raising the spectre of an underfunded industry regulator.

What is good about the new regime is the requirement that medicinal cannabis producers meet Good Manufacturing Practice (GMP) quality thresholds. This will ensure cannabis-based medicines meet the same high standards as all other pharmaceutical products. That high quality standard will be good news for patients. Provisions allowing  the rapidly developing industry to access the vast knowledge and cannabis cultivars that already reside in the underground medical cannabis community are both positive and sensible. And the licence fee structure being proposed is broadly supportive of the industry and should not inhibit its development.

The Ministry of Health says its expects to issue 110 medicinal cannabis licences in the first year, while at the same acknowledging the inherent difficulty in estimating the number of industry participants in what is an emerging NZ industry. There has to be some concern, therefore, that the Ministry of Health may not be able to cope any unexpected surge in licence applications. Moreover, there is the additional risk the Ministry may have underestimated the time and cost of monitoring - especially planned and unplanned surveillance audits – and subsequent enforcement action where breaches and/or illegal activities are identified. It would be a major concern if the implentation of the new regime were to fall down or become subject to substantial delay because the regulator’s office was inadequately resourced.

However, so long as long as the government remains committed to quickly resourcing the new regulatory agency to meet actual demand, then the regime should be introduced relatively smoothly. But, the absence of appropriate resourcing would likely create a significant bottleneck to industry growth, especially if the numbers of applications are consistent with market expectations and not the Ministry’s more conservative estimates.

If there are bottlenecks which lead to significant delays New Zealand patients will be the loser. At best, this will mean local patients will be paying more for relatively expensive overseas products. At worst, patients with limited financial means may continue to suffer unnecessarily or turn to the black or grey market,which is precisely what the Ministry is trying to avoid.

One disappointment is that that the government has decided to leave the cannabis extract Cannabidiol (CBD) as ‘Prescription Drug’ rather than ‘Pharmacist Only’. CBD is non-psychotropic and non-addictive and there is a strong body of evidence that it can provide safe and effective relief for a number of conditions including inflammatory pain and sleep disorders. It has been reported that 230,000 New Zealanders were prescribed drugs for sleep disorders in 2018, and with an estimated 700,000 New Zealanders suffering from arthritis, there is a strong and growing demand for cannabis-based alternatives to mainstream drugs, which can be addictive and cause unwanted side effects. CBD products have a role to play here, and it is to be hoped that they will become generally more available both as ‘Pharmacy Only’ medicines and eventually as ‘Over The Counter’ (OTC) medicines, depending on their potency.  

Overall, the new scheme will open the door to offering many New Zealanders relief from chronic pain and other symptoms, with non-addictive cannabis-based medicines. Cost-efficient New Zealand medicinal cannabis producers should enjoy a strong cost advantage and, in some cases, quality advantage relative to offshore-based providers of these cannabis-based medicines.

While the potential is there to establish a quality cannabis based medicines industry in New Zealand, progress could still be frustrated if the government does not put in place the appropriate infrastructure and oversight to allow medicinal cannabis products to be developed and brought to market in a timely manner. It has already taken two years to achieve regulatory certainty, and there is no excuse for further delay or uncertainty.

By way of disclaimer, I am Chair of SETEK Therapeutics, one of the new companies becoming involved in this market. SETEK is a New Zealand owned bioscience company looking to cultivate, process and manufacture pharmaceutical grade, pure organic, cannabis-based medicines and cannabis-infused skincare and wellbeing products for New Zealand, Australia, the Asia Pacific region and beyond.

My comments, however, are made from the perspective of someone with a long interest in this issue, who began the process of making access to cannabis based medicines more available to New Zealanders over five years ago (including declassifying CBD under the Misuse of Drugs Act), and who is generally pleased with the progress made subsequently. Interest, tolerance and understanding, both within government and the public, have grown considerably in that time, and the opportunity now exists to establish a viable cannabis based medicines sector in New Zealand.

On that note, Dunne Speaks takes its leave for 2019. Best wishes to everyone for a safe, and happy Christmas with family, friends, and those dearest to you. 2020 will offer a whole fresh set of challenges and opportunities, and Dunne Speaks will be back in a few weeks to comment on those as the year unfolds. Meantime, Merry Christmas!