The Government’s medical cannabis scheme is now in full effect, but strict rules have taken away products that are used by thousands of patients, letting billionaires corner the market and no obvious path for smaller growers. The solution may lie in applying the Commerce Commission’s thinking for supermarkets to the medicinal cannabis sector, with five small changes that could make a big difference.
We’ve all seen it at the supermarket: high prices and fewer options, despite New Zealand being a leading food producer. Our best stuff going offshore. The relentless promotion of unhealthy foods and toxic alcohol. Reports of stressed workers on long hours for low wages. Screwing down the local small businesses who are their suppliers. Actively stifling competition.
Now the Commerce Commission wants to disrupt the cosy duopoly that controls our food supply with deep interventions in the supermarket trade. These could include forced sales of some stores, a state-run network of non-profit food stores, and more support for local growers and suppliers.
Such interventions are not treated lightly, but food is central to our life and wellbeing – and so are our medicines. So, the same lens could be applied to New Zealand’s nascent medicinal cannabis industry. More products are undoubtedly on the way, but will we have a cannabis sector run by billionaires and Big Pharma, or will we prioritise the needs of patients?
Great intentions, uncertain future
For the 1-in-20 people in Aotearoa New Zealand who use cannabis for therapeutic reasons – and the people who provide it to them – it’s been a long road since the 2017 election when Labour promised to legalise medicinal cannabis within 100 days.
Legislation was indeed introduced within that timeframe, allowing all doctor to prescribe medicinal cannabis to any patient, but it has taken until now for us to see the medical scheme in full effect. In the meantime, in the 2020 referendum just short of half the country voted for full commercial legalisation – and a poll of No voters found many would have voted for decriminalisation.
Arrests for cannabis are way down (although inequity is up). Police no longer use military helicopters to snoop in backyards or spy on citizens for the devil’s lettuce. We’ve even legalised pill testing and substance checking services. It seems like every other week brings another investment opportunity in New Zealand’s burgeoning cannabis industry. I’ve optimistically called the medical cannabis scheme among the world’s best.
The scheme had twin objectives of access to safe affordable products, and a local industry producing them, and contained a transition period for existing products to remain on sale so that patients did not face discontinuity of the supply of their medicine. After extending it twice, Health Minister Andrew Little has declined to extend the transition period again, saying producers “didn’t get off their asses” and that any lack of supply is “on them”.
But this rather unsympathetic view ignores the difficulties of squeezing herbal cannabis through a pharmaceutical framework, and that to get any products approved so far has taken the backing of a billionaire or stock exchange listing.
From the 1st of October doctors may only prescribe products that have been approved by Medsafe or assessed as meeting the New Zealand minimum quality standard for medicinal cannabis products. Those standards are too high for 13 existing products. Their stocks are being destroyed, raising fears patients will be forced to turn to the black market, or pay higher prices.
Meet the new boss, same as the old boss
The only products assessed so far as meeting the standard are four specialised oils made by the Canadian firm Tilray, owned by the billionaire Peter Theil. These oils are considered research-grade, which presumably pushes the price up. Aside from cornering the market, some patients have reported periods of no supply here.
The only cannabis medicine properly approved by Medsafe is Sativex, but at $1000 per month this is not affordable for many patients. Sativex is produced by GW Pharmaceuticals, the world’s largest cannabis firm until its US$7.2 billion acquisition by another pharma company this year. That is the sort of financial muscle required to get through the regular approvals process.
Doctors can also prescribe outside the scheme, but to do so requires special approval from the Minister of Health for every prescription (delegated to Ashley Bloomfield, like he’s not busy..!). An import permit for controlled drugs is also required for any products containing THC. These rules are unchanged from when Helen Kelly was denied cannabis and pushed outside the law.
We may have thought we were getting an industry open to small growers and Green Fairies, providing jobs in the regions and canna-balms to cancer patients, but as it stands right now New Zealand patients can get either: an expensive tincture from a multi-billion-dollar pharma company; or similar tinctures from a Canadian billionaire; or the promise of a local product from Helius, bankrolled by NZ-US billionaire Guy Haddleton. The only other companies that seem close are NZX-listed CannaSouth and Rua Biosciences.
It obviously takes deep pockets to satisfy these rules. Yet Sativex and the Tilray oils are not fundamentally different to what many Green Fairies already produce for New Zealand patients, and there seems no obvious pathway for ordinary “Mom and Pop” growers and horticulturalists to enjoy any economic benefits of the scheme. Any fruits will not be shared widely.
Change is needed
The government has all but ruled out cannabis law reform and Andrew Little has said, in response to recent questioning from Chlӧe Swarbrick, that there will be no review of the medical cannabis scheme this year. He could, of course, simply extend the transition period. But considering the Commerce Commission’s report on the dysfunctional supermarket trade supplying our nation’s food, here are five ways I think we can make it better for the 200,000 Kiwis whose lives have been transformed by using medicinal cannabis.
1. Bring back the herbal prescription pathway
Squeezing herbal cannabis through a pharmaceutical framework is like saying we can only have processed food. When first proposed, the medical cannabis scheme contained dual regulatory pathways. These allowed standard pharmaceutical GMP medicines and, in recognition of the ways patients were already using medicinal cannabis, a separate regulatory pathway for herbal products such as flowers, balms and oils. However this Canadian-derived “GPP” option was removed after some in the medical profession scoffed at the likelihood of them prescribing – ugh – flowers, leaving just the pharmaceutical GMP pathway (which only two companies have achieved so far). I guess we could accept those doctors speaking for their colleagues, but it’s worth noting here the NZ Medical Association was hardly unanimous in their opposition to cannabis law reform during the referendum, and following a change in leadership they now support a “compassionate and evidence-based approach” to drug use. Let’s bring back herbal non-pharmaceutical products and let each doctor decide if they want to prescribe them. Creating an alternate herbal pathway is an approach taken by most other countries, including Australia, and would see the immediate return of the 13 products lost this week, and more options for patients would quickly appear.
2. Let patients import (or even grow) their own
If the shelves are empty at a supermarket, we can go somewhere else in search of toilet paper, and likewise under existing law if a patient cannot fulfil a prescription locally they have a “reasonable excuse” to legally import their own medicine from overseas. However, the medical cannabis scheme blocks patients from doing the same with cannabis medicines. This is grossly unfair given the dearth of products available locally and the slow pace of approvals, and this highly unusual blockage should be cleared out.
Patients should be able to fulfil their prescriptions offshore instead of hoping for more products to appear here one day. Likewise, if there are no suitable products available, patients should be able to provide for themselves – which could be as simple as clarifying to Police and Customs that it would not be in the public interest to prosecute any patients growing or importing a medicine that has been prescribed to them. This is an equity issue, and we should put the needs of patients first.
3. Standardise the Standards
Failing to harmonise with the rest of the world is like our supermarkets selling a smaller range for higher prices than everywhere else. To have the widest choice at the best prices, our rules of access should be the same. The medicinal cannabis regulations tried to do this by pointing NZ’s minimum quality standard for cannabis products to the European Pharmacopoeia which requires testing for things such as microbes and heavy metals. But New Zealand regulators, perhaps inadvertently, then adopted several positions that are not harmonised with other countries, but said to be the toughest in the world.
Meeting New Zealand’s stringent and unique quality standards is expensive and may not be worth it to global producers (there haven’t been any new imported products approved since the scheme began 18 months ago). Some local players might like the idea of de facto trade barriers, but with most products now off the shelves it risks undermining the objectives of the scheme. This is an easy fix because it’s just a matter of interpretation by regulators, although some political will would help move it along.
4. Break up the verticals
Supermarkets have too much market power, and we may be heading towards something similar in cannabis. I’ve talked to heaps of awesome Kiwi growers and horticulturalists who want to be involved but don’t have the resources to make the final products in a pharmaceutical form that would meet current standards. They need access to manufacturing and packaging facilities, but they’re shut out of these huge vertically integrated operations, who naturally want to keep it all for themselves.
We need competition to reduce prices for patients, and for that we need to drastically lower the barriers to entering the industry. Let’s follow the many examples overseas and not allow manufacturers to also grow. Instead, manufacturers could purchase what they need from growers or perform contract manufacturing to turn crops into medicines. This would promote competition and avoid monopolisation of the cannabis industry. Otherwise cannabis can have a diversity problem, with old rich men running the show. This change would allow a more diversified market without everyone needing to build their own multi-million-dollar facilities. With more competition we should expect more options for patients and lower prices. This is standard stuff overseas, and it would just take a policy change at the Medical Cannabis Agency when it comes to annual licence renewal. Billionaires crying poverty or unfairness should be studiously ignored.
5. Allow pharmacy compounding
Compounding is where a pharmacist prepares a customised prescription for a patient, a bit like the deli in the supermarket versus the tins in the aisle. For medicinal cannabis compounding pharmacists could prepare customised small batches for patients, in a variety of formats including flowers, oils, lotions and capsules. The ingredients supplied to pharmacies would still be tested for contaminants and strength. Compounding medicinal cannabis is allowed in Germany and the UK (including bud from local growers) and, crucially for prices, it avoids needing to invest in expensive manufacturing facilities. I think this may offer the most potential of any of these proposals, especially while patients have very few options available here – and all of them variations on the same oral drops.
My company Zeacann has partnered with CompoundLabs to explore options for compounding medicinal cannabis. We have found compounding medicinal cannabis is technically allowed but, aside from an exception for non-plant derived CBD, compounding is unfeasible because NZ’s medical cannabis rules require GMP manufacture and $15,410 product assessments – which are not required for compounding other medicines. This is like having only 1.5L Coke at the supermarket, with special permission and deep pockets needed if you want anything else. Allowing compounding could make a huge difference, and it’s a straightforward fix.
New Zealand’s medicinal cannabis scheme still has the potential to be the best in the world, despite some early teething problems which I believe can be overcome by applying a similar lens as the Commerce Commission’s review of supermarkets. I’ve proposed these five improvements in the hope of provoking a change of heart by decision makers: to put the needs of patients and small businesses before those of billionaires and stock investors.
Chris Fowlie is the president of the National Organisation for the Reform of Marijuana Laws NZ Inc; developer of the CHOISE model for cannabis social equity; CEO of Zeacann Limited, a cannabis science company; co-founder of the New Zealand Medical Cannabis Council; co-founder of The Hempstore Aotearoa; resident expert for Marijuana Media on 95bFM; cannabis blogger for The Daily Blog, and court-recognised independent expert witness for cannabis. The opinions expressed here are his own.