On 22 June 2020, proposed legislation permitting the export of medicinal cannabis and hemp as a government certified good received the Governor-General’s assent.
Globally, the legal marijuana market is expected to be worth 73.6 billion USD by 2027, with the Australian medicinal cannabis market alone projected to account for as much as 3 billion USD.
Export Control Legislation Amendment (Certification of Narcotic Exports) Act 2020 (Cth) (Act)
The Act amends the definition of ‘goods’ in the Export Control Act 1982 (Cth) as well as the Export Control Act 2020 (Cth), which will replace the 1982 Act when it commences at a time fixed by proclamation or on 28 March 2021 (together, Export Control Acts). The amendment will see narcotic goods as defined in the Customs Act 1901 (Cth) included in the definition of ‘goods’ under the Export Control Acts.
Reason for the amendment
The current definition of ‘goods’ in the Export Control Acts specifically excludes narcotic goods as defined in the Customs Act 1901. Under the Customs Act 1901, ‘narcotic goods’ are goods that consist of a narcotic substance, and a ‘narcotic substance’ is a border controlled drug or a border controlled plant.
Many importing countries require that Australian plant exports are certified as phytosanitary by the government. Government certification under the Export Control Acts can only be issued in respect of ‘goods’. Therefore, the exclusion of narcotic goods from the Export Control Acts’ definition of ‘goods’ prevents cannabis plants and plant products from receiving government certification.
To date, to avoid this issue, importing countries such as the United States have been willing to accept a letter that guarantees that narcotic exports are phytosanitary, despite the government being legally unable to certify the goods. However, concerns have been raised as to the long-term feasibility of this arrangement.
The amendment will enable the government to issue phytosanitary certificates in respect of narcotic goods, providing certainty to countries importing Australian cannabis plants and plant products.
Benefits of the amendment
The Act’s explanatory memorandum identifies the following benefits of allowing the certification of legitimate narcotic exports:
- Boosting the emerging Australian medicinal cannabis and hemp industries;
- Ensuring access to export markets and giving trading partners confidence in the quality of Australian exports
- Encouraging legitimate exports of medicinal cannabis and low-tetrahydrocannabinol (THC) hemp products;
- Fostering the Australian export market by removing regulatory barriers to trade and growth; and
- Treating narcotic goods in the same way as other agricultural exports that pose similar risks.
No changes are proposed to other legislative controls on narcotic goods.
Legal status of cannabis in Australia
Following the federal government’s Narcotic Drugs Amendment Act 2016 (Cth), medicinal cannabis is legal in all states and territories. The Therapeutic Goods Administration has approved over 46,000 Special Access Scheme Category B applications for unapproved medicinal cannabis products since 1992. Further, personal use of cannabis is now permitted in the ACT.
However, in spite of growing domestic and international demand, the current regulatory framework for domestic production, prescription and export of cannabis plants and plant products remains complex.
- Narcotic goods including medicinal cannabis and hemp now fall within the definition of ‘goods’ under the Export Control Acts and can be certified for export by the government;
- The government supports medicinal cannabis and hemp as an environmentally friendly and potentially lucrative crop; and
- The change provides certainty to Australia’s trade partners and increases access for Australian exporters.
HWL Ebsworth can advise medicinal cannabis businesses regarding all commercial issues. Please contact us for further information.
This article was written by Luke Dale, Partner and Kelly Williamson, Solicitor.