Cultivation of Medicinal Cannabis

In February 2016, Australia legalised medicinal cannabis. The regulation of production and cultivation of cannabis is the responsibility of the Australian Government.

The cultivation of medicinal cannabis includes all the steps that are taken until the cannabis plant is harvested. Cultivation includes all activities associated with production from the soil, including ‘preparing the soil, sowing, fertilising, tending and caring for the plants, and finally harvesting the crop’ (King CJ in R v Giogio and Romeo (1981) 7 A Crim R 305).

Under the Narcotic Drugs Act 1967 (Cth), medicinal cannabis can only be grown for medical or research purposes. If the cannabis is grown for any other reason, it will be illegal.

To cultivate medicinal cannabis, both a licence and a permit are required. The grant of an Office of Drug Control (‘ODC’) licence, accompanied with an ODC permit, allows the grower to obtain cannabis material (such as equipment, seeds and nursery stock) and covers associated cultivation and production purposes.

Licence

The ODC administers the granting of the cultivation licence as per the Narcotic Drugs Amendment Act 2016 (Cth) (‘NDAA’). An ODC licence is necessary as it gives the grower the authority to legally cultivate the cannabis plant. As mentioned above, a licence will only be granted if the cultivation of the cannabis plant is for medical or research purposes.

An application can be submitted for the ODC licence, and the Secretary decides whether to grant this licence or not (section 8F NDAA). The Secretary may even grant this licence subject to some conditions (sections 8G & 8J NDAA). If the Secretary is satisfied, on reasonable grounds, that the request for this licence is not for supplying the cannabis to the holder of a medicinal cannabis licence or for a purpose prescribed in the regulation, they must refuse to grant this licence.

There is no prescribed limit on the number of licences that can exist. However, under international conventions, the overall quantities of cannabis produced should not exceed the domestic requirements. Therefore, the number of licences granted will be according to the demand from the prescribers.

Pre-conditions

Before applying for a licence, there are certain pre-conditions that must be met, otherwise the application for an ODC licence will be unsuccessful.

If the person applies for a cultivating and production licence together, they must demonstrate that:

• the purpose of cultivating and producing the cannabis is for medical or research purposes; or
• the supply of the cannabis is to a holder of an ODC manufacturing licence.

If a person only applies for a cultivating licence, the person would only need to demonstrate that the supply of the medicinal cannabis is to a holder of a manufacturing licence.

Requirements of Licence

Certain requirements must be met under the NDAA, before being granted an ODC licence. It must be demonstrated that the applicant and their business associate(s) are suitable to be associated with this business and meet the security design and location requirements of any proposed cultivation site.

‘Fit and Proper’ Person Requirements

When the ODC makes an assessment on whether to grant a licence, they must decide whether the applicant and their business associate(s) are a ‘fit and proper’ person under section 8A of the Narcotic Drugs Act 1967 (Cth). The information regarding the following will have to be provided:

• Details of any criminal convictions.
• Details on any serious offences in the past 10 years and other offences, including fraud etc.
• Details of any civil penalties that have been imposed.
• Disclosure of any cancellations or suspensions of a licence held in relation to a law relating on the regulation of drugs
• Details of business associate(s) who can influence the business decisions due to their financial interests etc, immediate family members, and any connections who can influence the decision making in the business.
• Ability to conduct a stable business, finances and funding arrangements, as well as previous business experience(s).
• Details of the capacity to comply with the conditions of the ODC licence.

The following will have to be provided when applying for the ODC licence:

• Evidence that you are a fit and proper person.
• Identification documents.
• Evidence of financial stability.
• A site map, showing what is in the immediate vicinity.
• A detailed floor plan of any buildings on the site with a particular emphasis on security details.
• A copy of any standard operating procedures and policies that will be used.
• A risk management plan.

Security Design and Location

When applying for a cultivation licence, the details about the end to end, ongoing security of the whole process must be provided. It must be demonstrated that the security of crops and equipment is well controlled, and the location of the crops is not identifiable as a cannabis cultivation site. Further, security of information and record management is important, and information or records should not be accessed or accessible by third parties.

Lastly, reasonable steps must be taken to ensure that the staff and contractors that are hired are suitable persons.

If during the time of making the application for the licence the construction of the premises, including the security arrangements, is not complete, the ODC will assess the application based on the plans and a physical inspection will be conducted during the time of the grant of the ODC permit by the state or territory authority.

Permit

The licence alone does not permit the cultivation of cannabis; therefore, the next requirement is to obtain a medicinal cannabis or cannabis research permit (‘ODC permit’). The ODC permit sets out the specifics of the crop, including the quantity of production or the amount of crop that can be cultivated, timeframes for the authorised activities and the name of the next party in the supply chain such as the manufacturer or producer.

There is also no limit on the number of permits which can be granted. There may even be many permits granted under one licence, depending upon the different types and quantities of cannabis under each of the permits.

To obtain a permit, the person applying must have already been granted a licence. Further, the person must demonstrate that the contractual arrangements with the manufacturer have been complied with.

Next Steps

If you are interested in cultivating marajuana and require assistance with the licensing process, feel free to contact us for a free consultation on (02) 9262 5495 or (03) 8899 7870; visit our Website; Like our Facebook Page.

This article is written by Damin Murdock. This article is not legal advice and should not be relied upon as legal advice. All articles found on this website are intended to provide informative information, nevertheless, in many instances legislation and case law has been simplified and/or paraphrased. If you would like personal legal advice based on your current circumstances, you should contact MurdockCheng Legal Practice for a free consultation.