Australia Takes Steps Toward Medical Cannabis


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Although you would never guess from the cringe-worthy Stoner Sloth PSAs that debuted last year, 91 percent of Australians reportedly favor legalization of marijuana for medical purposes. Perhaps more surprisingly, the strongest support comes from the over-50 set.

In December, the federal government took the lead to create a nationally-consistent licensing scheme to regulate the cultivation of cannabis for medicinal and scientific purposes. Clinical trials are expected to begin in 2016.

The international cannabusiness community, including heavy hitters like GW Pharmaceuticals, MMJ PhytoTech Limited and AusCann Group Holdings Pty Ltd, are positioning themselves to participate. This is no mom-and-pop dispensary scene; this is big business.


Little in Common with U.S. Prohibition

The use, sale, growth and possession of cannabis is illegal across Australia, but cannabis regulation has been largely left to state governments. Minor offenses have been decriminalized in several areas of the country. Even in New South Wales, which has taken a relatively tough stance, offenders caught with up to 15 grams may be cautioned by police and given information about the harms associated with cannabis with a number to call for more advice. The offender can be cautioned twice before charges are brought. Australia has largely avoided a U.S.-style incarceration crisis brought about by the War on Drugs.


Turnbull Election a Watershed

Throughout 2015, a number of states indicated an interest in state-based cannabis cultivation trials intended to further medical research but needed the support of the federal government to do so. That came following the election of comparatively progressive Malcolm Turnbull as Prime Minister in September.

Minister for Health Sussan Ley has reportedly said the government will introduce legislation in the first session of 2016 that would align with the national approaches to the manufacture and supply of medical cannabis already in place under the Narcotic Drugs Act 1967 and the Therapeutic Goods Act 1989.

Several state-sponsored clinical trials focusing on children with intractable forms of epilepsy and the terminally ill are expected to begin in 2016.


Emerging Players

As part of the medicinal cannabis trial announced in New South Wales, researchers at the Sydney Children’s Hospital Network will team up with British based pharmaceutical company, GW Pharmaceuticals (NASDAQ: GWPH). The trial will focus on cannabinoid cannibidivarin, a molecule in cannabis that has shown encouraging effects as an anti-convulsant. The collaboration will also involve a compassionate access scheme for those too sick to participate in a clinical trial, with the GW Pharma’s drug Epidiolex.

MMJ PhytoTech Limited (ASX: MMJ) describes itself as Australia’s first listed multinational, vertically integrated medical cannabis company. It has begun selling cannabis pills in Europe via a Swiss-based subsidiary, Satifarm. These pills are free of THC, with the active ingredient, CBD, which has been shown to help patients suffering from cancer, anxiety and epilepsy.

Cannabis producer AusCann has become the first Australian company granted a license to grow and export medicinal cannabis for sale in Canada. It hopes to sell in Australia, as well, pending the anticipated 2016 legislation. AusCann will offer five varieties of cannabinoids sourced from its exclusive partner, Phytoplant Research. Auscann has raised $3 million in investment funds and reportedly plans to list on the Australian Securities Exchange in early 2016.


Government as an Ally in Scientific Research

Legalized cannabis in Australia seems to be taking a vastly different path than legalization in the U.S.  Perhaps one of the biggest differences is the government’s apparent willingness to support scientific and medical research. In any event, it seems to create an environment for business development and investment that relatively free of anxiety about government enforcement action.

Anne Wallace is a New York lawyer who writes extensively on legal and business issues. She also teaches law and business writing at the college and professional level. Anne graduated from Fordham Law School and Wellesley College.

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