Medicinal cannabis producers veer away from local market for export
Photo:
SUPPLIED/PURO NZ
New Zealand's medicinal cannabis sector is warning that "onerous" regulations around production are restricting the local sector, while international players flood the market.
The Medicinal Cannabis Council of New Zealand
estimated the sector to be worth around $200 million
, and welcomed the easing of rules around exports under the Misuse of Drugs (Medicinal Cannabis) Regulations in July (2024).
Large organic outdoor and indoor grower Puro of Marlborough said the changes had an "overnight" positive impact for the business, as
it signed multi-million dollar export deals
in the months following.
However while the numbers of licensed growers and the supply of product were rising, some New Zealand producers were struggling to gain traction domestically.
Instead, many opted for export markets that had easier pathways to market, like Australia or European countries like Germany.
Cultivation at Puro's Kēkerengū farm on the Kaikōura Coast.
Photo:
SUPPLIED/PURO NZ
The number of medicinal cannabis license holders reporting to the Ministry of Health was growing steadily from 29 in 2020 to 52 last year - and 13 were already lodged in 2025, as growers had to renew their licenses annually.
The use of medicinal cannabis was on the rise in New Zealand too, following
the establishment of the medicinal cannabis scheme
under the Ministry of Health in 2020.
The Health Ministry's data showed the number of packs of medicinal cannabis prescribed and supplied in New Zealand had increased 12-fold in the five years since, to more than 305,000 packs of flower or oil products in 2024.
A spokesperson for Medsafe, the medicines regulator, said 60 medicinal cannabis products were verified as meeting the "minimum quality standard."
"This ensures that a product is of acceptable quality and free from contaminants such as pesticides and heavy metals...and bacteria or moulds," they said.
"Unlike approved medicines, verified products have not been assessed for their safety or effectiveness."
The Medsafe spokesperson said ensuring cannabis and medicinal cannabis products for prescription were of high quality was achieved through the licensing regime for cultivation, supply, as well as a verification scheme for the products.
They said there were two medicinal cannabis products approved as medicines under the Medicines Act 1981.
No medicinal cannabis products were yet funded by Pharmac.
However, there were two outstanding applications for cannabidiol products, with one dating back as far as a decade.
In recent years, Pharmac had said evidence around medicinal cannabis was generally of poor quality and didn't capture long-term risks.
Funding applications required a "clearly defined patient population", good quality supporting evidence and long-term outcome and safety data.
Medicinal cannabis growers faced a number of licenses, audits, fees and checks by regulators - for example, one grower could face $20,000 in charges and fees in just one year.
Good Manufacturing Practices (GMP) licenses were required for specific technical processes throughout production, including packing up picked, freeze-dried cannabis flowers.
Marlborough's Puro company was unable to secure a GMP license specifically for packing at its site, so it sent freeze-dried flowers in bulk to Australia for packing which it then sold there, instead of re-importing for the New Zealand market.
Puro product packaging in Australia.
Photo:
SUPPLIED/PURO NZ
Executive chairman Tim Aldridge said despite meeting quality product standards, regulatory settings around GMP codes for manufacturing effectively blocked the company from accessing the domestic market.
He said the regulatory framework advantaged importers, and unnecessary high costs were restricting treatment options for patients who ultimately inherited the costs.
"A lot of patients out there, they can't afford these medicines," Aldridge said.
"It's not so much the subsidy and sort of co-funding, it actually is allowing the regulations to be more pragmatic and ensuring products can go to market because that drives the cost down.
"And the products that we're producing are a lot safer than what are available in some of the illicit channels."
He said Pharmac was part of that conversation "to a degree", but he wanted officials and policymakers to consider possible improvements to regulations.
"The most important message for us is to actually ensure we can compete with the products that have been imported into New Zealand, given that you know what we are producing is world class. So that requires a bit of regulatory tweaking."
Aldridge said other New Zealand companies were also struggling with GMP licenses and other technical issues involved in production.
NZX-listed company Rua Bioscience decided to sell its Good Manufacturing Practice-certified, purpose-built manufacturing facility in Tairāwhiti in 2023, shortly after building it, to instead focus on outsourcing cultivation and manufacturing.
Chief executive Paul Naske said GMP verification was expensive and made it hard to innovate new products, as licenses were specific to certain products or processes.
"Everyone in the industry is trying to muddle their way through the regulations," he said.
"New Zealand regulations make it particularly onerous.
"New Zealand is not going to be competitive for GMP manufacturing for medicinal cannabis products."
Naske said there was a struggle between the medicinal and agricultural elements of the sector.
"It was initially about satisfying patient demand. But it never intended to create a local industry," he said.
"So products are imported, but patients are still getting access to them."
Early season growth at Puro's Kēkerengū farm on the Kaikōura Coast.
Photo:
SUPPLIED/PURO NZ
Tim Aldridge raised the "red tape" concern by email to the Ministry for Regulation.
Conversely, the Ministry for Regulation was
reviewing the regulations around cousin sector industrial hemp
, announced in February, which may see legislation introduced to remove licensing requirements.
Tetrahydrocannabinol (THC) content was
around 0.3 percent for industrial hemp
versus 20-30 percent or more for medicinal cannabis, and both were managed by lead agency the Ministry of Health.
The Ministry for Regulation referred Aldridge's submission to the Ministry of Health in February, as the lead agency.
MedSafe confirmed the Ministry of Health received feedback from industry, including from the New Zealand Medicinal Cannabis Council, of which Aldridge was a board member.
"[We] will consider this in the context of any further changes to medicinal cannabis regulation," a spokesperson said.
The Medsafe spokesperson said it used "internationally agreed" GMP code of practice among countries like Germany and Australia.
They said the system provided assurances that products were consistently produced, manufactured, packed and controlled, according to set quality standards for medicines and medicinal cannabis products.
"An important factor in producing high quality products is ensuring that the facilities they are manufactured in meet quality standards and that there is an effective quality assurance system."
Puro's executive chairman Tim Aldridge.
Photo:
SUPPLIED/PURO NZ
Medicinal Cannabis Council chief executive Sally King said there were expensives involved throughout the production process for local producers, with many facing a six-figure investment to establish growing operations.
She said while imports were also bound by quality standards, New Zealanders would prefer locally-grown product
"It has to meet the qualifying standard, but it takes a great deal of time and effort and capital to go up that curve to be able to manufacture to the very high New Zealand standards," she said.
"We really are hoping to see a great many more domestically grown medicinal cannabis options for patients here, but it's taking time.
"It certainly is happening, but it is taking time and the majority of the market at the moment is dominated by imported product."
King said the council remained a patient advocate and that better funding to improve access to the products would ultimately help patients.
"This is not a funded medicine. It's expensive for patients, but patients do prefer many of the benefits that come from having a a domestically-grown product."
She said unfortunately research opportunities into medicinal cannabis were being hindered by regulations too - which hurts the case for Pharmac to fund these products.
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