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Medicinal Cannabis: The Year Ahead

2020 was an eventful year. With nationwide lockdowns, global economic uncertainty and the New Zealand Cannabis Referendum only just failing to pass, the global cannabis industry, like others, experienced relative turbulence.

In a recent post, we spoke about our take on what last year’s referendum meant for medical cannabis in New Zealand, seeing cause for optimism in the industry, with growing global uptake and appreciation of medical cannabis as a legitimate treatment option for a number of conditions.

With this changing sentiment, the cannabis industry in a position of exponential growth, and with medical science continually proving the validity and application of cannabis in medicine, we’re looking forward to the year ahead and the opportunities this growing industry will provide to patients in need, local communities and the New Zealand economy.

Below, we’ll cover the key events occurring in the medical cannabis space in the year ahead, providing an overview of what should be an exciting period for the continued growth of our industry.

Product Registration

The first event of note is the deadline for product registration set out by the Ministry of Health for suppliers of cannabis-based products. The prior Regulations provided for a transitional period, enabling products that had already been imported into NZ before 1 April 2020 to continue to be supplied without a product assessment until 1 October 2020. Suppliers had to apply for a medicinal cannabis licence with a supply activity before 1 May 2020 to qualify. This measure intended to protect both suppliers and patients, ensuring those accessing the products were able to do so while the products were being assessed.

An extension to this was granted, shifting the deadline to March 31 2021 which is now fast approaching. With no products having been registered, the key question is will this extension be extended further? With the challenges it will present for patients requiring access to medicine, our view is it should be an express consideration to provide ample chance for the local market to develop after the issues of 2020.

Cannabis as a New Zealand Export

Another exciting development for local companies is the permission for New Zealand cannabis producers to export product locally, following the new Misuse of Drugs Act - 1975 which came into effect in April last year. From the time it took growers to apply for their license, plant and harvest crops, many will be gearing up to meet the cannabis market demand overseas with high-quality New Zealand grown medicinal cannabis. Due to the regulations set in place locally and the time required for local growers to meet these requirements, from registration time to testing, we expect growers will be looking to supply overseas buyers and establish an international reputation in a market expected to grow by $27.89 bn over the next three years [1]. It will be an exciting time for these businesses to receive much needed market validation which will continue the development and innovation we are already seeing in the space.

Potential Law Changes

Finally, with the split vote in the 2020 New Zealand cannabis referendum, we are witnessing changing public sentiment towards medicinal cannabis, cannabis legalisation and control and the decriminalisation of recreational drug use. We shared our thoughts on the referendum in our recent post, discussing our view on why the referendum failed to pass, the danger of misinformation and what that means for the medical cannabis industry. Ultimately, public opinion on cannabis legalisation and supply regulation appears to be generational. It’s highly unlikely the government will look to engage in another referendum in the near future, but the narrow result could influence further shifts towards decriminalisation, and in the medical cannabis realm, see greater faith and approval provided to the local industry as both an economic driver and a legitimate option for improving the health of New Zealanders suffering from conditions for which cannabis is an approved treatment option, as well as people overseas.

Ultimately the year ahead will be an exciting time for the cannabis industry within New Zealand. We expect a number of significant developments as local businesses take advantage of our improved economic situation, on the back of a demonstration of growing support in middle-aged and young people locally and the growth of our global medicinal cannabis products industry. As researchers and financial institutions continue investing in cannabis business around the world, we expect medical science to also continue to prove cannabis’ efficacy in treating a range of conditions and contributing to improved health and quality of life for many around the world.

[1] $ 27.89 Billion Growth in Global Legal Cannabis Market During 2020-2024 | Featuring Key Vendors Including Aphria Inc., Aurora Cannabis Inc., and Bhang Corp. | Technavio

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