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BusinessFebruary 7, 2021

NZ medicinal cannabis is facing a looming crisis

(Photo: Getty Images)
(Photo: Getty Images)

New Zealand is facing a collapse of legal medicinal cannabis supply after March 31, when a deadline to meet stiff new government rules is expected to keep the products of three of the country’s five main importers out of the market, reports NZ Herald’s Kate MacNamara in this Herald Premium article.

Last April, the government unveiled a new regulatory system to create more safe, widespread and affordable access to medicinal cannabis. It has not yet approved a single product.

New Zealand-based importers Medleaf Therapeutics, Nubu Pharmaceuticals, and Eqalis Pharmaceuticals confirmed their products are not likely to be approved under the new standards before the March deadline. Domestic production, still in its very early stages, is not likely to reach the market until late this year.

On March 31, special provisions, which have allowed companies to import under an old, stop-gap system will expire. Shane Le Brun, regulatory and business development consultant at Medleaf, currently estimated to be the country’s largest importer of medicinal cannabis, said his firm is preparing for a hiatus from the market of at least several months. A situation he described as a “looming crisis” for patients.

Even after receiving ministry verification, products will face a lag in reaching New Zealand, Le Brun warned. Companies require licences to both import to New Zealand and export from abroad, these cannot be obtained until after verification, and shipping times are uncertain.

Brendon Ogilvy, co-founder and business manager at Eqalis, said his company, a relatively low-cost supplier, may abandon efforts at import altogether. He said new standards now make New Zealand “an outlier from an international perspective and our market is far too small to prompt change in overseas practices.” Eqalis is also working toward domestic production but Ogilvy said the company doesn’t expect to bring anything home-grown to market until September.

Canadian company, Tilray, which currently imports four cannabis products, three with THC (which has pschoactive properties) and one with CBD alone (cannabidiol, a non-psychoactive ingredient) said it expects to have products okayed in time to allow for continued supply beyond the end of March. Tilray’s Sydney-based representative, George Polimenakos, said the company has been working through the New Zealand Ministry of Health system since last July.

A Ministry of Health spokesperson confirmed that no products have been approved under New Zealand’s new system, but it said it does expect “a number of products to be verified as meeting quality standards by 1 April 2021.”

The import of Sativex, the only medicinal cannabis product approved by Medsafe and currently the most expensive at roughly $900 per prescription, will also continue unaffected. No medicinal cannabis product is subsidised by Pharmac.

Deadline delayed once already

The ministry originally instituted a deadline of October 1, 2020 for transition to the new approval system. However, in late September, when it was clear that no company would meet the new rules, it extended that deadline for a further six months.

Importers say they are frustrated because those rules, especially concerning CBD products, are more stringent than those in other comparable jurisdictions including Australia, Germany and Canada. Under the changes these products must meet a pharmaceutical-grade standard known as GMP. Elsewhere, and currently in New Zealand, CBD products typically meet lesser, food-grade standards.

“We’ve created a framework and regulations that are more stringent than anywhere else in the world,” according to Mark Dye, CEO of Nubu. Dye said it took his company nine months, until November of last year, just to find an international supplier willing to conduct the laboratory testing work required by New Zealand.

For example, Dye said New Zealand requires stability data, not only on the final manufactured product, but also for the ingredients that go into that product.

Nubu chief executive Mark Dye. (Photo: Supplied)

Ogilvy said another key problem is that, to his knowledge, no New Zealand-based third party testing labs are fully certified to perform all the tests required to meet the new assessments set out by the ministry.

He said his company is still conducting the necessary stability tests, which take six months, and will not be able to meet the stringent pesticide testing that is required for ingredients, even if the final product is found to be pesticide free.

Le Brun said pesticide testing for products for which he’s seeking approval needed to be done across a series of Australian labs, “we’re testing for a dozen or so more pesticides than Australia.” He said, in general, the new rules opt for an extraordinary level of safety and the cost is high prices and limited market choice.

Le Brun said an easy short-cut for the Ministry of Health, which, he said, appears unable to manage both the Covid-19 pandemic and the establishment of an operational system for the import of cannabis, would have been to use German rules. Germany is the largest medicinal cannabis market in the world and manufacturers are already set up to meet those standards.

Verification holding up other parts of the new system

The passage of legislation in 2018 paved the way for a legal medicinal cannabis industry in New Zealand, and then-health minister David Clark promised it would usher in greater patient access to medicinal cannabis. But many say that access remains elusive.

Under the new, but still inoperable system, for example, GPs can prescribe THC products to patients. However, until such products are approved by the ministry, only medical specialists like oncologists and rheumatologists can prescribe THC, and only once they obtain case-by-case approval from the Minister of Health.

“That we’re still working within this very cumbersome system is disappointing, we were given to expect the system would change for us on April 1 of last year. Here we are 10 months later and nothing has happened,” said Graham Gulbransen, a GP who runs the Cannabis Care Clinic in Auckland.

Currently, GPs like Gulbransen can prescribe only milder CBD products and Sativex. Gulbransen said Sativex is about three times more expensive than a comparable Tilray product on the market, but as a GP he cannot prescribe the cheaper product until it’s verified under the new rules.

The number of medicinal cannabis users in New Zealand on legal prescriptions remains tiny. Ministry of Health import data released under the OIA suggests a total of between 2,000 and 2,500 such patients in late 2020, most were using CBD products.

Ministerial approval records to November, 2020 for the prescription of THC products (there were 317 in the first 10 months of the year) show that pain, especially chronic pain, was the most common complaint medicinal cannabis was used to treat. Cancer-related symptoms (including pain) was also commonly cited, as well as treatment for seizures, insomnia and anxiety.

In an interview last month, Manu Caddie, chair of the New Zealand Medical Cannabis Council, said that while ministry rules for legal players are very stringent, dozens of companies are illegally selling unregulated CBD products to New Zealand customers with none of the restrictions around quality control that legitimate pharmaceuticals require.

This story was originally published by Herald Premium

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