Nipped in the bud: Why Kiwis are still turning to illegal medicinal cannabis products

Only three New Zealand medicinal cannabis companies have products that have met the standard for prescription. Photo / Dean Purcell

NZ medicinal cannabis regulations are so strict they are stifling would-be producers, and high costs mean users are still having to resort to illegal products. By Russell Brown

It wasn’t supposed to be this way.
When the Misuse of Drugs (Medicinal Cannabis) Amendment Act passed in 2018, it seemed to lay the groundwork for a vibrant new industry, one that could leverage both New Zealand’s history of technical innovation in horticulture and its informal knowledge about growing premium cannabis.

The decision to require cannabis producers to achieve European GMP (Good Manufacturing Practice) certification, the same as that required for pharmaceutical drugs, meant a high bar, but it would give New Zealand products a premium standing globally. But four years on, only three New Zealand companies have any products that have met the standard for prescription, and only one, Helius, has products derived from New Zealand-grown cannabis. The company has also just announced it has secured approval for “two new medicinal cannabis products containing THC”, derived from plants grown indoors at its Auckland facility.

The devil was in the detail of the “minimum quality standards” that followed the passage of the law. Our cannabis regulations are regarded as the most onerous in the world. Too onerous, in effect, to permit the production and sale of cannabis.

Ironically, the same regulations making it so hard to get products to market have also made cannabis relatively easy to prescribe – more so than in Australia. Anyone with enough money can literally buy legal weed. A dozen cannabis flower products are now available on prescription, at up to three times the cost of black-market cannabis. They’re all imported and irradiated to meet New Zealand’s strict microbial standards.

Now, after what a Ministry of Health spokesperson described to the Listener as two years of “inquiries and comments from the industry on the workability, clarity and functionality of the Medicinal Cannabis Scheme”, the Medicinal Cannabis Agency, which oversees the ministry’s regulations, has drawn up a consultation document proposing changes to the regulations.

Health Minister Andrew Little. Photo / File

Health Minister Andrew Little originally promised such a document would be published last August. After another promised release date in November went by, Steve Wilson, the chair of industry body the Medicinal Cannabis Council, wrote a terse letter to the minister warning that, “My members are growing more concerned each time a promised release date passes.”

What was supposed to be the formality of a cabinet sign-off in early December didn’t come to pass either.

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The proposed changes are now “in the cabinet process”, according to Medicinal Cannabis Agency group manager Chris James, who told the Listener, “The ministry needs to ensure ministers are fully briefed so we have confidence that the proposed changes have in-principle support from the government.”

Unexpected email

But two weeks before Christmas, the ministry unexpectedly sent producers an email outlining the contents of the consultation document in some detail. It asks manufacturers if they would agree to 13 changes to the regulations.

“We enunciated all these concerns in a 20-page document in March 2020,” says council executive director Sally King. “So it’s taken this long for them to read it back to us.”

The original regulations were written in 2019 “at warp speed”, says King, “and when you write regulations on such a new area, so quickly, there’s bound to be some mistakes, cock-ups even. And there were a few.”

Most of the proposed fixes are too technical to raise any political controversy; the kind of things, like a wider choice of permitted containers, that might have been managed through in a normal regulatory system. But cannabis is still controlled under the Misuse of Drugs Act 1975 and the conditions for its production and sale are written into Misuse of Drugs (Medicinal Cannabis) Regulations 2019.

“So even if [the ministry] did agree with us, they can’t just unilaterally say, ‘Oh, that’s all right’,” King explains. “Some of this should never gone into the regulations in the first place. If it hadn’t, we wouldn’t be having these problems.”

But the proposed changes do clearly address an overarching problem for producers – they currently can’t export to countries with different regulations without first meeting New Zealand’s standards. Cannabis product meeting our standards is not necessarily what is required in “quite legitimate markets”, says King.

Last year, Puro New Zealand, which grew the cannabis used in Helius’ cannabidiol (CBD) oils at its certified organic facility on the Kaikōura coast, exported a shipment of bulk cannabis flower, dried to a moisture content of 10 per cent as required under our standards, to an Australian producer. The customer rejected it as being too dry to be useful.

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Advertise with NZME.CBD, a non-intoxicating cannabinoid, is sold in convenience stores in the US and Europe.

Testing is another problem. The regulations’ embrace of the European Pharmacopoeia, which provides common quality standards throughout the pharmaceutical industry in Europe, and European GMP rules means they require GMP-certified testing that isn’t available in New Zealand. The ministry’s email invites cannabis producers to suggest “alternative tests, test methods and associated testing limits”.

James says the ministry “acknowledges the medicinal cannabis industry is keen to see improvements made to the scheme as soon as possible” and promises a fast consultation process, with amendments to the regulations late this year. But some in the industry have already moved on.

Wilson’s predecessor as chair was Manu Caddie, who co-founded Hikurangi Cannabis Company, which became the publicly listed Rua Bioscience. Caddie, an iconic figure in the young industry, created a compelling story for Rua, one in which whānau investors would help build a secure cultivation facility near Ruatoria and a high-tech plant to produce medicines in Gisborne. He’s no longer in the business.

Long, difficult road

Caddie began a gradual departure from the industry when Rua’s board decided last year to shelve its dream of local cultivation, and focus instead on sourcing cannabis from its Australian partner, Cann Group, after it became clear that the road to growing locally would be long and difficult.

That decision “changed the direction of the company significantly”, Caddie says. “I think it made sense and the board are still totally committed to trying to realise the vision of large cultivation in Tairāwhiti, but it feels like that goal is further away than ever.”

Rua has a single product available for prescription in New Zealand, a CBD oil. The plants it is made from were grown in Australia.

Caddie is more philosophical about the regulations than some of those still in the industry.

“The regulations are responsible for everything and nothing,” he says. “We knew that GMP was tough – we probably didn’t know how tough – but at the time most of those interested in getting a sustainable industry going saw that as our ticket to global markets – and it still is. If we all knew earlier, things could’ve moved faster, but nearly everyone was very hopeful and misguided about what would be required to make a pharmaceutical from a fickle plant like cannabis with a fraction of the funds our competitors have overseas.”

Meanwhile, the industry is being incentivised at the same time as it’s hobbled. Last year, Puro received a $13 million grant from Ministry for Primary Industries’ Sustainable Food and Fibre Futures fund. Agriculture Minister Damien O’Connor hailed the grant as a step towards New Zealand’s medicinal cannabis industry becoming as important an exporter as our $2 billion wine industry.

But wine doesn’t need to be prescribed by doctors. CBD, a non-intoxicating cannabinoid, is sold in convenience stores in the US and Europe. Here, the Ministry of Health insisted it be retained under the Medicines Act as a prescription-only medicine, meaning it’s captured by the regulations.

“There is absolutely no scientific or medical reason for that situation,” says Caddie. “CBD interacts with some medications, as does grapefruit and liquorice, but we don’t even put warning labels on those products, let alone make them prescription-only. The reason it is controlled as it is was because it previously was a controlled drug, because it was derived from cannabis and the regulators at the time didn’t know what else to do with it. When the ministry accepted keeping it as a controlled drug wasn’t justified, they made it prescription-only.”

The result has been needless cost for patients, he says. He cites a recent conversation with the father of an epileptic boy prescribed Rua’s CBD 100 oil, which he says has curbed eight years of 20 to 30 seizures every night. “Many times, he has come close to dying. Using CBD has meant he has gone days without a seizure, for the first time in eight years. They use a bottle every week or two – and those GMP bottles cost over $100 each.”

Outside the system

A decision late last year by the Medicines Classification Committee rejected a proposal for New Zealand to follow the Australian Therapeutic Goods Administration and allow over-the-counter sales of low-dose CBD products, insisting that “CBD medicines did not have an established long-term safety profile” and that “there was no clear access issue for these specific [low-dose] medicines”.

They also simply might not work. James Polston, who was recruited to New ­Zealand in 2019 to become chief science officer at Helius and now runs his own research company here, believes our pharmaceutical model steers producers towards products based on isolated CBD that may be largely ineffective for pain and sleep problems.

“It is fair to say that there are products produced by green fairies and in the black market that are more useful than some of the registered products that follow the medical cannabis guidelines. Full-spectrum products are almost always more effective for patients than isolates, where whole-plant preparations seem to produce an ‘entourage effect’ with cannabinoids.”

The proposed changes may make it easier to get full-spectrum products through the quality standards, but Polston thinks our pharmaceutically oriented cannabis regime will ultimately not be sustainable on its own. He believes we will eventually follow the path of Germany and make it easier for people to access cannabis outside the pharmaceutical system.

More New Zealanders are using cannabis therapeutically than ever, according to an analysis last year by the New Zealand Drug Foundation. Photo / Jason Hosking

“Perhaps we are still in the infant stages of the worldwide industry, but Germany is a good case study,” says Polston. “They instituted a fairly aggressive pharmaceutical medical cannabis strategy, but have now moved toward adult legalisation. To be honest, I can’t think of a pharmaceutically oriented regime that hasn’t hampered access to products.

“Cannabis is so unique that it really doesn’t fit into the pharmaceutical model, because it is not a one-active-ingredient product. Most cannabis preparations cannot be easily patented or protected like traditional pharmaceuticals, and this makes it an unattractive drug candidate for most companies.”

King has similar thoughts. “If I were looking for one wish, it’s that we really start to look at change in the global narcotics framework for drugs,” she says. “Once that shifts, that’s when we start to look at the whole misuse-of-drugs legislation, which really needs review, as we all know. But that’s still evolving all around the world.”

Caddie, the industry pioneer, has some sympathy for the government, which he says fulfilled its promise and created a special category of medicine for cannabis. Short of a different result in the 2020 referendum on legalising cannabis, which he says would have seen regions like Tairāwhiti and Northland “undergoing the most incredible economic transformation the country has ever seen”, the Medicinal Cannabis Scheme is what we’ve got.

So what would a scheme look like if he had his way?

“As it is. Plus controlled retail sale of food-grade cannabis and cannabinoid products that anyone over 20 can legally purchase from licensed retailers.”

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