Misuse of Drugs (Medicinal Cannabis) Amendment Bill

Misuse of Drugs (Medicinal Cannabis) Amendment Bill Departmental Report Prepared by the Ministry of Health 11 June 2018 1

Contents Introduction... 3 Submissions... 3 Overview... 3 Section One - Key topics that are relevant to the Bill... 4 Exception and Statutory Defence (clause 5 of the Bill, amending section 7 of the Act)... 4 Quality standards (clause 7 of the Bill, amending section 14 of the Act)... 9 Cannabidiol... 11 Section Two - Key topics raised in submissions that are outside the scope of the Bill... 15 Details relating to the setting of quality standards... 15 Recreational use... 16 Affordability of products... 16 Industry opportunities... 17 Regulation of the industry... 17 A review of the Misuse of Drugs Act and penalties... 19 Implications for Health Care Professionals... 20 Summary of recommendations for change... 21 Appendix One Current context and the Scheme... 22 Current context... 22 The Scheme... 22 2

Introduction 1. This report provides an overview of submissions made to the Health Select Committee on the Misuse of Drugs (Medicinal Cannabis) Amendment Bill (the Bill), and the Ministry of Health s recommendations on proposed changes to better reflect the intent of the Bill. 2. The Parliamentary Counsel Office has been consulted in the development of this report. 3. The Bill was introduced on 20 December 2017 and meets the Government s 100 day commitment to introduce legislation to improve access to medicinal cannabis. 4. The Bill is guided by the principles of fairness, quality and safety and compassion. 5. The Bill: introduces an exception and a statutory defence for terminally ill people to possess and use illicit cannabis and to possess a cannabis utensil provides a regulation-making power to enable the setting of standards that products manufactured, imported or supplied under licence must meet deschedule cannabidiol (CBD) so it is no longer a controlled drug. 6. The Bill supports the establishment of a Medicinal Cannabis Scheme (the Scheme) by allowing the setting of quality standards that all medicinal cannabis products must meet. The Scheme aims to improve access to quality medicinal cannabis products on prescription, including by enabling domestic cultivation and manufacture for commercial purposes. An overview of the current regime for accessing medicinal cannabis and the proposed establishment of the Scheme is provided in Appendix One. 7. This report is divided into two sections. Section one covers key topics that are relevant to the Bill. Section two covers key topics raised in submissions that are outside the scope of the Bill. 8. A summary of recommended changes is included on page 21. Submissions Overview 9. The Committee received 1611 1 written and supplementary written submissions. 10. There were 1539 submissions received from individuals and 72 from organisations including: 11 health care professional (HCP) bodies and medical associations 13 companies interested in being involved in the medicinal cannabis industry 48 other organisations such as patient support groups. 11. The Committee heard 158 oral submissions on 4, 11 and 30 April 2018 and 2, 3 and 9 May 2018. 12. The majority of submissions (88 percent) support individuals being able to use cannabis for medicinal use, with only one percent of submitters (including three HCP bodies) not in support. 1 The actual number of submissions received was 1697 but after adjusting for blank submissions, duplicates and supplementary submissions (all submissions received from the same submitter were counted as one submission), 1611 submissions were received. 3

13. Of the 778 submissions that commented on the Bill, 27 percent (209 submissions) supported the Bill in its entirety, 6 percent (43 submissions) did not support the Bill at all, and the rest were unclear. Fifty-two percent of submitters (402 submissions) who commented on the Bill (including the majority of individuals who were against the Bill) indicated that it did not go far enough. Section One - Key topics that are relevant to the Bill Exception and Statutory Defence (clause 5 of the Bill, amending section 7 of the Act) 14. The exception and statutory defence provisions for terminally ill people to possess and use illicit cannabis is intended as a compassionate measure until affordable quality products are available under the Scheme. 15. The provision is limited to the terminally ill, recognising that the risks and benefits of using illicit cannabis with no quality controls and without medical oversight is different for this group of patients. 16. The provision is not intended to encourage terminally ill people to use illicit cannabis. 17. Thirty-five percent of all submitters (571 submissions) commented on the exception and statutory defence provision. Of those 571 submissions: 33 percent (186 submissions) supported the provision four percent (25 submissions) (including three HCP bodies and two other organisations) were against the provision 63 percent (360 submissions) were unclear. 18. The majority of submitters that commented on the provision, regardless of whether they supported the provision or not, indicated that the provision does not go far enough. Suggestions for broadening the scope focussed heavily on providing protection for individuals suffering from other illnesses and to a lesser extent on enabling supply to, and self-cultivation by, those covered by the exception and statutory defence. Other reasons for not supporting the provision were: protection for owners of premises such as Hospices further protections for the terminally ill the need for good quality products problems with the definition or diagnosis of a terminal illness inadequate protections for individuals in possession of utensils concerns that the legislation is not well designed. Extending the exception and statutory defence to chronic pain and other conditions 19. Many submitters commented that the exception and statutory defence should be extended to more conditions. Of the 571 submissions that commented on the provision, the most commonly suggested conditions that the provision should be extended to were: pain, including chronic pain (174 submissions) severe and debilitating illness (44 submissions) cancer (22 submissions) epilepsy (16 submissions) multiple sclerosis (17 submitters). 4

20. In addition, 74 submissions that commented on the provision stated that anyone with a doctor s endorsement should be allowed to access illicit cannabis without fear of prosecution. 21. The exception and statutory defence provision is a compassionate response to the reality that some terminally ill people are using illicit cannabis, and are worried about potential criminal charges. The provision is limited to the terminally ill, recognising that the lack of efficacy data, and consideration of the risks and benefits of using illicit cannabis with no quality controls and without medical oversight, is different for this group of patients. 22. The Ministry considers that any other group of patients, such as those with chronic pain, should continue to be able to access quality medicinal cannabis products on prescription. The risk-benefit ratio for patients with other conditions is different to those who are terminally ill, as unlike the terminally ill, they may have many years of life ahead of them. 23. It is appropriate that people with other conditions, including chronic pain, receive medical advice about the use of medicinal cannabis products, including potential interactions with other medications and medical conditions. People with chronic pain, or other conditions, can be prescribed a medicinal cannabis product under the current legal pathway, if their medical practitioner supports its use for that individual. 24. Extending the provision to other conditions may also risk undermining the intent of the Scheme which is to improve access to quality medicinal cannabis products on prescription. 25. The Ministry does not recommend extending the exception and statutory defence provision to include people who are diagnosed with other conditions. Extending the exception and statutory defence provision to supply and cultivation 26. Of the 571 submissions that commented on the exception and statutory defence, submitters recommended the provision be extended to: growers (93 submissions) suppliers (such as green fairies who can also be growers) (172 submissions) friends and whānau (231 submissions) caregivers (130 submissions) nominated people (4 submissions) 2. 27. Less than one percent of submitters supported the terminally ill being able to grow cannabis for their own medicinal use. 28. Several submitters indicated that the Bill needed to establish a supply route. 29. Under the Act, a person who transports a controlled drug to a person who can possess it legally is not committing an offence. This provision could be used as a defence for people transporting cannabis to terminally ill people, as they will be able to possess it legally. 30. The defence provided by the Act would not protect the person against a charge of procuring the drug from a supplier. 31. Although we acknowledge that terminally ill people may rely on friends, whānau, and carers to source illicit cannabis for them, we do not recommend extending the provision to cover cultivation and supply. 32. The Office of the Clerk provided advice to the Health Committee that it is outside the scope of the Bill to extend the exception and statutory defence from possession and use to include 2 A number of submitters made more than one suggestion. 5

cultivation. This advice was provided on the basis that the Act treats cultivation very differently to possession and use and because the Bill s explanatory material clearly focuses on possession and use only. 33. Supply of a controlled drug is also a very different offence to possession or use and carries a much higher penalty. The Ministry understands that extending the exception and statutory defence provision to protect suppliers is also likely to be outside the scope of the Bill on the basis of the advice provided by the Office of the Clerk. 34. The provision is intended as a compassionate measure until the Scheme is established and should remain as an exception for extraordinary circumstances. 35. The Scheme is intended to enable the commercial supply of domestically produced medicinal cannabis products and will regulate all steps of production and supply through a licensing framework. 36. The Ministry does not recommend extending the exception and statutory defence provision to supply and cultivation. Protection for owners of premises (such as Hospices) 37. Several submitters raised concerns that owners of premises (such as Hospices) would be committing an offence under section 12 of the Act by letting individuals consume illicit cannabis on the premises. 38. A person who has a certificate stating that they have a terminal illness and possesses or uses cannabis will not be committing an offence under the Act. A person with a terminal illness who brings product onto a premises is not committing an offence and therefore the premises owner would not be committing an offence if they knew the person was using illicit cannabis. 39. The premises owner would only be committing an offence if they knew that a person was supplying cannabis to a terminally ill person, as that would remain an offence under the Bill. Just as we do not recommend changes to the Bill to protect individuals who are supplying the terminally ill with illicit cannabis, we do not recommend changes to the Bill to protect premises owners who are aware that individuals are supplying the terminally ill with illicit cannabis on their premises. 40. The Ministry does not recommend any changes to the Bill to protect owners of premises where illicit cannabis is used by the terminally ill because the premises owners are not committing an offence. Further protections for the terminally ill 41. Submitters were concerned about the risk that associating with drug dealers would pose to individuals accessing illicit product. 42. A number of submitters recommended that the terminally ill should be completely protected from the prospect of arrest and court appearances. 43. The Ministry acknowledges the risks associated with sourcing illegal product. The provisions are not intended to encourage terminally ill people to use illicit cannabis. 44. The Ministry will continue to work with enforcement agencies to ensure that the provision is implemented in line with the Bill s principles of fairness, quality and safety and compassion. 45. The Ministry does not recommend any changes to the Bill in response to these submissions. 6

The definition of terminal illness (clause 4 of the Bill to amend section 2 of the Act) 46. Of the 3 percent of submissions (54 submitters) that commented on the definition of terminally ill: two submitters agreed with the definition 29 submitters disagreed with the definition 23 submitters were unclear. 47. The key themes raised were that: the person may live longer than a year after the diagnosis of a terminal illness. Submitters asked what the process is if the person lived longer than a year, and if they can still access medicinal cannabis it is difficult to predict when a person has a year to live. Medical associations and several others raised concerns that terminal illness is difficult to define, as it is not a medical condition the time period should be extended. 48. The definition of terminally ill is consistent with the New Zealand Palliative Care Strategy which states that palliative care should generally be available to people whose death from progressive disease is likely within 12 months. While the Ministry acknowledges that it can be difficult to accurately predict how long a person has left to live, doctors already provide their expert opinion on the matter for life insurance and other purposes. 49. The Ministry intends to provide guidance to the public and health practitioners on implementing this provision. 50. The Ministry does not recommend any changes to the definition of terminal illness. The diagnosis of terminally ill 51. The Royal Australasian College of Physicians recommended that nurse practitioners should not be allowed to diagnose a terminal illness because it is not part of their training or expected curriculum. 52. Nurse practitioners are qualified to diagnose conditions under their scope of practice that are within their area of expertise. Some nurse practitioners work specifically in the areas of palliative and aged care. 53. The Ministry does not recommend any changes to the Bill as a result. The terminally ill need good quality products 54. Several submitters considered either that quality product should be provided to terminally ill people, or that individuals should only be able to access quality product. 55. Many health care practitioners and medical associations were concerned about the exception and statutory defence provision because they consider that medicinal cannabis products should be regulated in the same way as other medicines. 56. Submitters raised concerns that the use of medicinal cannabis products could be harmful without medical oversight. 57. A number of submitters felt that the terminally ill are vulnerable and should not receive a lesser standard of care than other population groups. 7

58. A number of submitters were concerned about the exception and statutory defence provision because they consider that there is not enough evidence to support the use of medicinal cannabis. 59. The Ministry agrees that it is important that people have access to quality products, which is why the Bill provides for the setting of quality standards. 60. The Ministry considers that it is appropriate that all individuals, including the terminally ill, receive medical advice about the use of medicinal cannabis products. The Ministry strongly encourages all individuals to seek medical advice when considering the use of licit or illicit cannabis for medical reasons. 61. The exception and statutory defence is limited to the terminally ill, recognising that the significance of a lack of efficacy data, and consideration of the risks and benefits of using illicit cannabis with no quality controls and without medical oversight, is different for this group of patients. 62. The provision is intended as an interim, compassionate, measure until the Scheme is established, and quality product is supplied. 63. The Ministry does not recommend any changes to the Bill to remove the exception and statutory defence provisions. Exception provision for cannabis utensils (clause 6 of the Bill to amend section 13 of the Act) 64. The Royal Australasian College of Physicians was also concerned that the Bill currently provides an exception and statutory defence for the possession and use of illicit cannabis but only provides a defence for possession of cannabis utensils. 65. It is an offence to possess a drug utensil for the purpose of using an illicit controlled drug. Since a terminally ill person who has a certificate is not committing an offence by possessing or using illicit cannabis, it is also not an offence for that person to be in possession of a utensil. 66. The exception provision in the Bill therefore already protects the terminally ill against the offence of being in possession of a utensil and no changes to the Bill are needed or recommended as a result. Design of the exception and statutory defence provision 67. The Legislation Design and Advisory Committee raised concerns that the exception and statutory defence does not comply with the Legislation Advisory Committee Guidelines 3. This is because the provision relies on the non-enforcement of prohibitions that already exist in the Act against the supply and cultivation of cannabis so that a terminally ill individual can source product. As a result, the Committee recommended that the provision not proceed until a scheme for regulating the legal production and supply of medicinal cannabis is ready to be enacted. 3 The Legislation Advisory Committee Guidelines provides guidance to determine if legislation is well designed and consistent with legal and constitutional principles. 8

68. If the provision is retained, the Legislation Design and Advisory Committee suggested that the exception be moved to section 8 of the Act to be consistent with how other exceptions are treated. 69. The provision is not intended to encourage the use of illicit cannabis, rather it acknowledges that some terminally ill people choose to self-medicate with illicit cannabis that is not prescribed. The provision is intended as an interim, compassionate, measure until the Scheme is established, and quality product is supplied. For these reasons, the Ministry does not consider there is a need to remove this provision. 70. Moving the exception to section 8 of the Act has no effect on policy but the Ministry agrees that it makes the Act easier to navigate and understand. Recommendation I: The Ministry recommends the exception for the terminally ill to be able to possess and use cannabis be moved to section 8 of the Act. Quality standards (clause 7 of the Bill, amending section 14 of the Act) 71. The Bill supports the Scheme by allowing the setting of quality standards that all medicinal cannabis products must meet. The Scheme aims to improve access to quality medicinal cannabis products on prescription. Further detail of the Scheme is provided in Appendix One. 72. Thirty percent of all submissions (476 submitters) commented on the regulation making provision in the Bill. This provision will enable the Ministry to require all medicinal cannabis products manufactured, imported or supplied under a licence granted under the Act to meet quality standards. The majority of submitters (1135) did not comment on this provision of the Bill. 73. Of the 476 submissions that commented on the provision: 95 percent supported the provision 0.5 percent did not support the provision 4.5 percent were unclear. 74. Key themes identified were: minimum standards should be well regulated products should be able to be advertised. Products should be well regulated 75. A number of submitters commented that products need to be well regulated to ensure public safety, that the content should be known and that there should be confidence in prescribing and using the product. Several submitters supported a legislative rather than voluntary approach to products meeting standards. 76. The Ministry agrees that standards need to be compulsory and enforced. The mechanism will be enabled through clause 7 of the Bill which allows for the setting of minimum quality standards which all products or classes of products must meet. Enforcement of the standards is part of the Scheme and outside the scope of the Bill. 77. The Ministry does not recommend any changes to the Bill. 9

Extending the setting of quality standards to include cultivation and manufacture 78. Currently, clause 7 of the Bill only allows the setting of quality standards that all products that are manufactured, imported or supplied under a licence granted under the Act must meet. The Ministry considers that the provision needs to be broadened to include regulations to be made regarding minimum standards for all stages of cultivation, production and manufacture (see Recommendation II). 79. Without the ability to set these additional standards, there is a risk that the Scheme will not be able to ensure products are consistently of an acceptable quality and can be prescribed with confidence. The process for setting quality standards 80. Because of their highly technical nature, the Ministry considers that it would be more appropriate for the technical details of quality standards to be published by the Director- General of Health. This will give the regulator the ability to respond to changes in technology, an evolving safety profile and keep pace with an emerging industry. 81. This is particularly important for medicinal cannabis because the industry is still quite new and international standards and regulation are still developing. This amendment will help the right regulatory balance to be found more quickly. 82. The Ministry intends to consult publicly before setting or making any changes to quality standards. The proposed change is not dissimilar to how quality standards are currently made and amended for medicines. Recommendation II: The Ministry recommends that clause 7 of the Bill (to amend Section 14 of the Act) is amended to allow regulations to prescribe standards for all stages of cultivation, production and manufacture, and criteria for when the regulations will apply. The technical detail of the standards will be published by the Director-General of Health. Making information about products that meet the quality standards available 83. Several submitters raised concerns that medicinal cannabis products will not be able to be advertised so people will not know what is available and the industry will find it difficult to establish themselves in the market and make their investment viable. 84. In addition to being regulated under the Act, medicinal cannabis products used for a therapeutic purpose are also regulated under the Medicines Act 1981. The Medicines Act allows medicines that have not received consent for distribution from Medsafe 4 to be prescribed, but does not allow them to be advertised. This is because the safety, efficacy, and quality of the products has not been assessed, so they should not be widely available. 85. The Scheme will mitigate some of these concerns by ensuring that products meet a minimum quality standard. It is unlikely that the Scheme can achieve its objective of improving access to quality medicinal cannabis products if doctors have no way of knowing which products meet the quality standards and how to access them. 4 Medsafe is the New Zealand medicines regulator and sits within the Ministry of Health 10

86. Regulations can be made under section 37(1)(o) of the Act to regulate the advertising of medicinal cannabis products that meet the quality standards. 87. The Ministry recommends that the Bill is further amended to explicitly provide that regulations made under section 37(1)(o) of the Misuse of Drugs Act are intended to override the provisions of section 20 of the Medicines Act 5. The Ministry recommends the new clause allows the making of regulations enabling the provision of information about the availability of medicinal cannabis products to appropriate health professionals. 88. The details of what should be advertised are yet to be worked through. 89. The details of who advertising of controlled drugs should be restricted to are yet to be worked through but is likely that they will be at least as restrictive as regulation 50 of the Misuse of Drugs Regulations 1977, which restricts advertising of controlled drugs to practitioners and pharmacists. 90. The Ministry does not recommend broadening the advertising provisions further because that would be likely to undermine the medicines framework. 91. The Ministry acknowledges that enabling regulations to override the prohibition in section 20(2)(c) of the Medicines Act should only be done where: there is a strong need or benefit to do so the empowering provision is as limited as possible to achieve the objective, and there are safeguards to reflect the significance of the power. 92. The Ministry is satisfied that these requirements are met as the regulations will only allow the most limited advertising necessary to enable the Scheme. Enabling such provision of information is essential to ensuring the scheme can function but the information should be limited to the smallest possible audience. Recommendation III: The Ministry recommends that a new clause is added to amend the Act to make it clear that regulations made under section 37(1)(o) are intended to override section 20 of the Medicines Act by allowing regulations enabling the provision of information about the availability of medicinal cannabis products to appropriate health professionals. Cannabidiol 93. Removing CBD and CBD products from being captured under the Act is required in order to regulate these products in line with their risk profile. 94. Twenty-three percent of submissions (369 submitters) commented on the cannabidiol (CBD) provision. Of these: 81 percent supported removing CBD from the Act two percent opposed removing CBD from the Act 17 percent were unclear. 95. Of the 369 submitters who commented on the provisions, 49 percent felt that the provision did not go far enough, regardless of whether they supported the provision or not. 96. The key themes identified were: concerns with the appropriateness or necessity of removing CBD from the Act the benefits of CBD the definition of CBD product 5 Section 109 of the Medicines Act already provides that where the two Acts are inconsistent, the provision of the Misuse of Drugs Act prevail. 11

removing other cannabinoids from the Act. Descheduling of CBD 97. A number of submitters noted that they do not believe CBD is an isomer 6 of THC 7. 98. One submission from an HCP body stated that there is insufficient evidence of the efficacy of CBD to justify removing it from the Act. A further submitter commented that a full risk assessment of CBD should be undertaken before it is removed from the Act. There were 114 individuals who submitted the same or a substantially similar submission (known as a form submission). The form submission noted that CBD should be treated the same as other non- THC cannabinoids (in other words it should not be a controlled drug). 99. The Ministry s position is that CBD is captured under the Act as an isomer of THC. 100. The Expert Advisory Committee on Drugs (EACD) advises the Minister of Health on drug classification matters. Based on its assessment of CBD's risk profile, lack of psychoactive properties and potential therapeutic value, the EACD advised that it would support a decision by the Minister to deschedule CBD from the Misuse of Drugs Act. 101. The Ministry considers that CBD should not continue to be captured under the Act. 102. The Ministry does not recommend any changes to the Bill in response to these submissions. Benefits of CBD 103. A number of submitters noted that CBD has health benefits and therapeutic value. Of the 369 submissions that commented on the CBD provision, four percent (13 submitters) felt that CBD is an effective treatment for pain. Submitters also commented that CBD could be an effective treatment for inflammation (one submitter), cancer (one submitter), anxiety (one submitter), neuropathy (one submitter), fibromyalgia (one submitter), and Parkinson s disease (one submitter). 104. Of the 369 submissions that commented on the CBD provision, two percent recommended that CBD be more available (five submitters recommended that CBD should be available over the counter, and one submitter recommended that CBD should be available on prescription). 105. The Ministry agrees that CBD has potential therapeutic value and has no or little psychoactive effect, and supports the removal of CBD from the Act. 106. CBD is also scheduled as a prescription medicine under the Medicines Act 1981. If CBD is removed from the Act, the Ministry intends to refer CBD to the Medicines Classification Committee 8 to consider whether the prescription medicine status of CBD remains appropriate. 107. The Ministry does not recommend any changes to the Bill to make CBD or CBD products more readily available. 6 Substances are isomers of each other when they contain the same number and type of atoms (eg tetrahydrocannabinol and CBD both have 21 carbon atoms, 30 hydrogen atoms and two carbon atoms) but the atoms are arranged in a different order. In other words the substances look different even though they are made up of the exact same building blocks. 7 THC refers to 9-tetrahydrocannabinol which is the main psychoactive component found in cannabis. 8 The Medicines Classification Committee makes recommendations to the Ministry (as the delegate of the Minister of Health) on the classification of medicines under the Medicines Act 1981. 12

Status of other cannabinoids under the Act 108. Eleven submitters recommended that other non-psychoactive cannabinoids should not be captured by the Act on the basis that they believe these cannabinoids are or could be of therapeutic benefit and there is no risk associated with them. 109. The Act currently schedules tetrahydrocannabinols (THCs 9 ) as controlled drugs because these are specifically listed in the Act. The Act does not capture other cannabinoids in general because they are not specifically listed in the Act. No changes are required to remove all cannabinoids (such as cannabigerol, which is found in cannabis) in general from the Act. 110. However, the Act then has provisions to capture a number of substances that have similar structures to those specifically listed in the Act or that can be easily converted to the substances listed in the Act. These provisions are referred to as the related substances provisions. 111. A number of cannabinoids (such as CBD and cannabichromene, which are both found in cannabis) will be captured under the Act as substances that are related to THCs. 112. A number of these substances that are captured as substances related to THCs will have little to no psychoactivity and many have potential therapeutic benefits (such as CBD). The Ministry understands that at least one other cannabinoid with little to no psychoactivity is currently being investigated for therapeutic use. 113. The Ministry considers that it is reasonable that substances that are related to THCs should not be captured under the Act where there is evidence that the substances have little or no psychoactivity. Recommendation IV: The Ministry recommends revising the Bill so that substances related to tetrahydrocannabinols that are naturally found in cannabis are no longer captured under the Act where there is evidence that they have little to no psychoactivity. Definition of CBD product (clause 4 of the Bill, amending section 2 of the Act) 114. The Bill currently allows not more than two percent of the total cannabinoid content of CBD products to consist of other cannabinoids usually found in cannabis. 115. Of the 369 submissions that commented on the CBD provision: less than one percent (three submitters) suggested that the two percent allowance in CBD products of other cannabinoids should be replaced with a two percent allowance of THC two percent (nine submitters) recommended that the definition of CBD product should be changed to increase the THC content on the basis that it is likely to be more effective less than one percent (two submitters) suggested not restricting THC content at all. 116. The Act currently schedules THCs as controlled drugs but not other cannabinoids. Most cannabinoids have little to no psychoactivity (eg CBD, cannabichromene and cannabigerol) unless they are also THCs. 9 THCs are a family of largely psychoactive substances that share similar structures and are a subset of the cannabinoid family of substances. 13

117. The Ministry recommends that the two percent allowance in CBD products should only apply to THCs and their psychoactive related substances that are naturally found in cannabis, as this is in line with how cannabis preparations are treated under the Act (see point 118). 118. The change means that the amount of cannabinoids in CBD products will not be restricted unless they are also THCs. 119. In other words, a much smaller set of substances will be controlled in CBD products than the provision originally proposed. Recommendation V: The Ministry recommends revising the definition of CBD product (clause 4 of the Bill) to allow not more than two percent of the total CBD, THCs and related psychoactive substances content to consist of THCs and related psychoactive substances that are naturally found in cannabis. 120. There is no single internationally accepted allowance of other cannabinoids in CBD products. In Australia, the allowance is two percent. In the United States of America, some States specify an allowable THC level in CBD products. Levels range from zero point three percent to eight percent 10. 121. The two percent allowance was proposed to reduce barriers to accessing CBD products (because it is difficult to obtain a pure product from cannabis) and align with Australia. The EACD does not consider an impurity level of up to two percent of other cannabinoids to be clinically significant 122. Products containing CBD and more than two percent psychoactive tetrahydrocannabinols will still be available on prescription but will be subject to the requirements of the Act. 123. The Ministry does not recommend any further changes to the definition of CBD product to alter the two percent allowance. Two percent allowance for other non-psychoactive substances found in cannabis 124. The form submissions received from 114 individuals also commented that medicinal cannabis products should be controlled by the level of THC they contain, not other non-psychoactive cannabinoids. 125. The Ministry recommends in Recommendation IV that non-psychoactive substances that are naturally found in cannabis and that are captured under the Act as substances related to THCs, should no longer be captured under the Act. 126. The Ministry acknowledges it is difficult to isolate a pure substance from cannabis, but considers that the question of whether an allowance for contaminants should be permitted in substances other than CBD should be considered by the EACD. 127. The Ministry does not consider that a two percent allowance of THCs and psychoactiverelated substances that are naturally found in cannabis should be applied to the substances described in recommendation IV. 128. Products containing substances related to THCs, with little to no psychoactivity, that are naturally found in cannabis and any THCs or psychoactive-related substances that are 10 https://medium.com/cbd-origin/is-cbd-legal-legal-status-of-cbd-2018-d1b4a0ed42df 14

naturally found in cannabis will still be available on prescription. However, these products will be subject to the requirements of the Act. Section Two - Key topics raised in submissions that are outside the scope of the Bill Details relating to the setting of quality standards 129. A number of submitters felt that we should review and adopt overseas quality standards. 130. One submitter suggested that an independent commission for the development of the industry be established with public consultation on all requirements. 131. Several submitters commented that they wanted public consultation on the standards and/or that the standards should be specified in the Bill. 132. Of the 476 submissions that commented on the quality standards, 109 commented on the type of quality standards that medicinal cannabis products should meet. Of these 109 submissions: 49 stated the standards should identify the composition of cannabinoids in a product 33 stated products should meet medicine standards 10 wanted a range or mix of grades including pharmaceutical 14 stated standards should be food or herbal or organic grade or a mix of these 3 had other suggestions. 133. Approximately one quarter of submitters who commented on the quality standards provision stated that the level of THC in a product should be controlled. 134. Two submitters opposed product testing, with one submitter concerned that rigorous testing would unnecessarily delay the availability of products and increase their price. 135. Regular testing or testing of products before sale was recommended by 161 submitters. There was concern that composition and contaminants should be known. Some noted the need for labelling of THC and CBD levels. About a quarter of these submitters noted the need for testing to be by an approved/accredited laboratory. 136. Several submitters commented that the process from planting to manufacture should be controlled. 137. Several submitters commented that standards should be similar to Canada s Good Production Practices. Several submitters commented that product should be pesticide-free and organic, while another commented that products should be safe and sterile. Several submitters commented that they wanted simple or whole plant preparations rather than highly processed and expensive pharmaceuticals. 138. A third of submitters stated that there should be regular testing of products to verify composition and contaminant levels. 139. The Ministry is currently reviewing the standards that apply in other jurisdictions. The process for setting or making changes to quality standards will follow a robust process that will include the opportunity for public comment. 15

140. A product with high levels of THC may be clinically indicated for a particular patient and/or may be administered at a low dosage level. The key concern around product quality is that the composition is as stated so that dosage can be accurately calculated and that contaminant levels are safe. As such, the Ministry does not recommend restricting the level of THC in medicinal cannabis products in general. 141. In line with how other medicines are treated, quality standards are necessary to reduce the risk to the public that product is poorly grown or manufactured, and as a result, for example, contains harmful pesticides and heavy metals. 142. The development and setting of quality standards is outside the scope of the Bill. Work on the quality standards is ongoing, but will take account of international practices and the Ministry s experience in dealing with similar products. The Ministry intends to publicly consult on the quality standards. 143. As part of the development of the quality standards, compliance and monitoring requirements, the Ministry will give careful consideration to when, and how often, products will need to be tested. Recreational use 144. Twenty-nine percent of the submissions mentioned recreational use, and the large majority of these submissions supported the legalisation or decriminalisation of cannabis for recreational use. 145. Legalisation or decriminalisation of cannabis for recreational use is outside the scope of the Bill, but will be the subject of a referendum to be held by 2020. Affordability of products 146. A number of submitters commented that products need to be affordable, with several submitters concerned that pharmaceutical grade products will be too expensive. 147. A number of submitters suggested that we could ensure products are affordable by accepting herbal or food grade standards, rather than requiring products to meet pharmaceutical standards. 148. Ten percent of submissions mentioned concerns about the cost of accessing products. Sixtysix percent of those submissions (including one submission from a HCP body, two submissions from industry and nine submissions from other organisations) asked for the Bill to ensure products are reasonably priced or specifically recommended that products be subsidised. 149. The Ministry acknowledges the demand for affordable products and will take this into consideration when developing the regulatory framework, and setting the quality standards. However, as with regulation of any good or service, the Ministry s primary focus will be on ensuring that regulation is risk proportionate. 150. Subsidising products is outside the scope of the Bill. 151. Industry has indicated that they expect to be able to produce quality products in New Zealand for significantly less than the current cost of imported products. One company has indicated they expect to be able to produce product in New Zealand at or near the current black market prices. The price of domestically-produced product will be affected by the requirements of the 16

Scheme, including the cost of compliance in New Zealand, and this will be carefully considered when establishing the quality standards and the regulatory scheme. Industry opportunities 152. Numerous submitters from the public, industry and other organisations commented that enabling a domestic market would create jobs, drive economic growth and support regional development. Ways to support the industry 153. Two percent of submitters (eighteen from the public, three from industry, four other organisations) recommended that financial support should be provided to help the industry develop. 154. Several submitters suggested that the Scheme should enable a cottage industry 11. 155. Financial support for the industry is outside the scope of the Bill. The Ministry will consider ways to minimise costs to industry when establishing the Scheme and make the requirements of the Scheme workable for all of industry (big or small). However, as with regulation of any good or service, the Ministry s primary focus will be on ensuring that regulation is risk proportionate. Not-for-profit model 156. Several organisations (and numerous supporters of those organisations) suggested that the industry should only consist of licensed not-for-profit organisations such as community trusts, in a similar way to how gambling is regulated in New Zealand. 157. Setting up a not-for-profit model would require legislative change, but is outside the scope of the Bill because the Bill does not establish the licensing framework. Regulation of the industry 158. Twenty percent of submitters commented that they supported regulation of the medicinal cannabis industry in some form. All industry individuals or bodies were in favour of regulation of some sort. 159. Suggestions ranged from controlling just the sale of seed or licensing individuals to grow their own to licensing commercial growers and dispensaries and issuing users with a medical card to be able to access products. A number of submissions referred to the models used in Canada and various states of North America as good examples of regulatory frameworks. 160. Under the Misuse of Drugs Act, almost all activities involving controlled drugs must be carried out under a licence issued by the Ministry of Health. This framework is necessary to support access to controlled drugs for medicinal use while reducing the likelihood of diversion and for New Zealand to meet its international obligations under the United Nations Conventions. Utilising the framework that is already in use is also expected to be more efficient than 11 A cottage industry is a business or manufacturing activity carried out in people s homes. 17

implementing a new framework, which will deliver savings to industry and the public and make it less complicated for industry. 161. Other jurisdictions have implemented comprehensive medicinal cannabis schemes. The Ministry will look to learn from the experiences of other jurisdictions and incorporate relevant and reasonable initiatives at an operational level to simplify and strengthen the medicinal cannabis scheme. Regulating in line with the alcohol model 162. A number of submissions recommended regulation of medicinal cannabis should be similar to regulation of alcohol. 163. This is more in line with recreational use and is not suitable for a medical model, particularly given that the main constituents of medical interest in cannabis (THC and CBD) are both prescription medicines at this time and THC will continue to be a controlled drug. This suggestion would also require legislative change that is outside the scope of the Bill. Age restrictions 164. A small number of submissions suggested an age restriction ranging from 18 to 25. 165. The risks associated with use by individuals under the age of 18 will be appropriately managed under the Scheme, as products will only be accessible with clinical oversight or when the individual is terminally ill (as the risk-benefit analysis for the terminally ill differs from other patient groups). Clinical trials are currently under way to investigate the use of cannabis-based products for the treatment of childhood conditions (eg Dravet syndrome, a severe form of childhood epilepsy) and these studies will help inform safe prescribing practice. An age restriction for medical use is not recommended. Use of taxes to subsidise products or pay for education and treatment 166. A number of submissions commented on the benefits to New Zealand of having a regulated industry paying tax, such as the ability to use these funds to subsidise products for those in need, or contribute to education and treatment services. 167. Education and treatment services would largely be in response to illicit use and it is not appropriate for the legitimate medicinal cannabis industry to be funding these services. Using taxes from the industry to subsidise products is also likely to increase the cost of products to individuals which goes against the Government s aim of improving access to these products. Enabling export 168. Fourteen percent of submissions supported an export market for medicinal cannabis products or requested that the Bill be amended to explicitly allow export. 169. The Ministry s position is that the Act and associated regulations already allow export of controlled drugs (including medicinal cannabis products) under a license issued by the 18

Ministry of Health. The Ministry does not recommend changes to the Bill to explicitly allow export. 170. The Bill allows for the setting of quality standards that all products that are manufactured, imported or supplied must meet. The Ministry does not support extending this section to include export because the importing countries are likely to have their own requirements and New Zealand exporters should have the flexibility to meet these requirements. Export will not be prohibited if clause 7 of the Bill is not extended to include export. Previous convictions 171. Eleven percent of submissions raised concerns about whether individuals with previous drug convictions should be able to work in the medicinal cannabis industry. Of those submissions, 95 percent (including submissions from the public, industry and other organisations) supported these individuals being able to work in the cannabis industry. Only one percent of submissions that mentioned the issue were against these individuals being able to work in the cannabis industry. 172. Medicinal cannabis products are medicines and most are currently either controlled drugs or substances capable of producing a psychoactive effect. The Ministry considers that the requirements for issuing licences for medicines, controlled drugs and psychoactive substances are all relevant for determining the licensing requirements for medicinal cannabis products. 173. The licensing requirements are likely to be at least as strong as the Misuse of Drugs (Industrial Hemp) Regulations 2006, which are made under the Act. The Hemp Regulations prevent licence holders, directors and responsible people from having drug or dishonesty convictions. 174. In addition to these requirements, under the Psychoactive Substances Act the Psychoactive Substances Regulatory Authority must take into account whether the applicant has convictions under the Medicines or Psychoactive Substances Acts. It is likely that the licensing requirements for medicinal cannabis products will also prevent licence holders, directors and responsible people from having medicines and psychoactive substances convictions. 175. Neither the Misuse of Drugs Act, nor the Psychoactive Substances Act extend these requirements to all staff and it is unlikely that the fit and proper person test would be extended to all staff under the Medicinal Cannabis Scheme. A review of the Misuse of Drugs Act and penalties 176. Three percent of submissions specifically recommended changes to the penalties imposed by the Act. 177. An additional fourteen percent of submissions (22 submitters) recommended a full review of the Act. 178. Both a change to the penalties and a full review of the Act are outside the scope of the Bill. 19