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NZ's Medicinal Cannabis Agency proposes changes to regulations: Zeacann's response

New Zealand has one of the world's best medicinal cannabis schemes for ease of prescribing, but has been held back by the toughest standards for approving products. This has caused delays and increased costs. Zeacann generally supports the changes proposed by the Medicinal Cannabis Agency, however we also urge further reforms and have given specific guidance on how to unlock the full potential of Aotearoa's cannabis industry.

The proposed changes will increase the viability of local production, the export of crops, and the importation of a wider range of cheaper products. This includes removing the anomalous testing requirements for heavy metal tests and microbes (which are set at unique levels, effectively blocking both imports and exports). However the insistence on full GMP manufacture - including pilot batches, stability and shelf life testing - will restrict participation and keep prices higher than they could be. In contrast, US states and Canada allow batch-tested production, which allows for variation between crops. Zeacann has called for a tandem pathway for non-GMP herbal products, to greatly increase affordability. In addition, we urge:

  • A full review of the entire scheme and all the regulations, with the goal of reducing costs for patients and encouraging wider participation in the industry;

  • Remove the de-facto blocks on pharmacy compounding

  • Allow limited marketing of cannabis products that have been assessed as meeting the MQS;

  • Confirm that non-therapeutic products derived from hemp are allowed on general sale and regulated as foods or natural health products;

  • Allow over the counter pharmacy access to low-dose CBD;

  • Increase the availability of vaporisers.

Read our submission in full

To the Medicinal Cannabis Agency Ministry of Health, Wellington

Feedback on regulatory changes proposed by the Medicinal Cannabis Agency (email dated 16 Dec 2022)

Tēnā koutou, thank you for considering this response from Zeacann Ltd to your email sent on 16 December 2022 which invited feedback on a list of proposed changes to the Medicinal Cannabis Scheme, together with any other feedback we may have.

1. Our background, and the basis for change

Zeacann Ltd is an Auckland-based medicinal cannabis company, founded in 2017, and one of the first companies to attain a Medicinal Cannabis License under the new scheme. Zeacann has a research partnership with Auckland University of Technology, and a supply and service agreement with CompoundLabs, New Zealand’s largest compound pharmacy. Zeacann distributes seeds from Amsterdam’s T.H.Seeds and has also declared illicit local genetics.

Zeacann was a founding member of the NZ Medical Cannabis Council (although no longer a member after disagreeing with their lobbying and processes). We have provided submissions and feedback at every stage of the development of the Medicinal Cannabis Scheme.

We support the objectives of the scheme: to improve patient access to quality, affordable medicinal cannabis products; provide medical practitioners with confidence about the range of quality medicinal cannabis products available; and support equitable health outcomes and equity of access to the economic benefits of a medicinal cannabis industry.

However, patient access is still limited to single digit figures, with the NZ Drug Foundation citing 6 per cent of the estimated 300,000 Kiwis who use cannabis therapeutically having legal access, and monthly prescription figures suggesting it could be as low as 2 per cent.[1]

Additionally, progress on providing medical practitioners with the confidence to prescribe has been muted at best. BPAC’s resource was barely updated from the previous version, carried over some errors, and was not widely promoted.

Finally, we have not had equitable health outcomes or participation in the economic benefits of a local industry. Existing products are widely perceived as too expensive for many people to afford with any regularity, and so are limited to those with higher incomes. Similarly, the local industry is a fraction of the projected size and limited to those with millions of dollars of funding.[2] This in turn keeps the cost of products higher than it should be.

2. Feedback on the proposed changes in your email

1) The current definition of ‘cannabis-based ingredient’ requires that the ingredient is both extracted from cannabis and is intended to be used in, or for, a dosage product. Would you agree with expanding the definition to include ingredients such as milled cannabis to help broaden the variety of dosage products available to patients in New Zealand?

If a cannabis-based ingredient needs to be defined, it should not be limited to milled cannabis but should be as broad as possible, encompassing all cannabinoids derived from cannabis that is licensed or assessed under the scheme.

This should exclude synthetic cannabinoids and isomerised compounds that do not occur naturally in cannabis. It should also exclude extracts made form hemp licensed under New Zealand’s Hemp Regulations.

Milled cannabis can be less stable and quicker to degrade once exposed to air, and should be provided in smaller pack sizes (such as 5 grams or less) to maintain freshness once opened. However fixed costs incurred under the current regulations have inhibited smaller pack sizes, while also pushing prices higher than they could be.

2) The requirement for ‘starting material for export’ to meet a minimum quality standard was put in place to establish New Zealand as a high-quality producer of starting material but can be a barrier to export. Would you agree with removing the requirement for each consignment of starting material for export to meet the minimum quality standard?

Zeacann advocated for this at the beginning, while some larger, corporate, licence holders argued NZ Inc needed to be protected from ‘cowboy’ exporters by enforcing a ‘gold standard’ – which only they could meet. This has been a de facto trade barrier.

The current requirement for all exports to be assessed against the NZ Minimum Quality Standard (MQS) before export has been unworkable for everyone – as the testing facilities have not existed here, and some requirements were simply not possible – and this has caused massive financial loss for those who invested into building facilities that would be acceptable in other countries but cannot product cannabis that will meet New Zealand’s requirements.

Exports should not be assessed at all in New Zealand. The only assessment that matters is the requirements of the buyer in the importing country. The only requirement of the exporter should be that they are appropriated licensed, and have provided a Certificate of Analysis that identifies the shipment as cannabis and quantifies the active ingredients.

3) A medicinal cannabis product that has been verified as meeting the minimum quality standard must meet the labelling requirements set out under regulation 19 of the Misuse of Drugs (Medicinal Cannabis) Regulations 2019. However, sometimes importing countries have different labelling requirements for these products, including specifying the language required. Would you agree with exempting verified medicinal cannabis products for export from needing to meet the requirements of regulation 19?

Yes, Zeacann strongly supports this change. Labelling should be to the requirements of the receiving country, just as imports into New Zealand need to meet local requirements. The current regulation 19 has inhibited exports and undermined the viability of the local industry.

4) Currently, all cannabis-based ingredients and medicinal cannabis products are required to meet the minimum quality standard before they are imported into New Zealand unless they are specifically exempted. This applies even when samples are being imported for analytical testing and where the research to be conducted is considered to be therapeutic in nature, but the products will not be directly administered to a person. Would you agree with removing the requirement to meet the minimum quality standard for these small samples? And if so, do you believe that 200ml in the case of a liquid or 200g in the case of solid material would be an appropriate upper limit?

We support an exemption for R&D and testing and removing the requirement to meet the MQS, however we do not support imposing an upper limit on this. It is not possible to determine future requirements with any accuracy and so we think this is likely to cause unforeseen problems.

We support allowing any quantity for such uses, and note that any such material or products could not be supplied for therapeutic use until it has been assessed as meeting the MQS.

5) A number of tests are currently required for both extracted cannabis-based ingredients and dosage products. As manufacturers are required to manufacture in accordance with Good Manufacturing Practice (GMP) and are therefore already required to control for contamination and impurities, would you agree with removing the following testing requirements from the minimum quality standard for extracted cannabis-based ingredients if this is controlled in the dosage product: • microbiological contamination • heavy metals • pesticides • absence of aflatoxins • ochratoxin A • residual solvents? Please note that if in response to the feedback received on question 1 a proposal is put forward to include milled cannabis as a cannabis-based ingredient, then the applicability of this proposed change for milled cannabis will be considered.

We support this change. The current requirements have caused unintended blockages, for example the microbiological contamination has been set at levels lower than elsewhere and obtainable only through irradiation. Producers here have found that no irradiation capacity exists for them.

Logically, there does not need to be a requirement for ingredients to meet a minimum quality standard, as that assessment should apply to the finished product. The MCA should not be concerned with assessing ingredients as if they would be consumed by people, in addition to the finished product that would be consumed.

A manufacturer will need to ensure the finished product meets the minimum quality standard, which would require using ingredients or processes that can achieve the various specifications. These decisions are best made by individual manufacturers, leaving the MCA better placed to assess the final products as these are developed.

6) Under the Regulations, testing to demonstrate compliance with the minimum quality standard must be performed by a GMP-certified manufacturer or laboratory. However, no GMP-certified testing laboratory in New Zealand can currently perform all the tests required by the minimum quality standard, and there is no indication of when or if such a laboratory will be established. Would you agree with allowing the following lower-risk tests for assessment against the minimum quality standard to be undertaken at ISO/IEC 17025:2017 accredited laboratories: • microbial contamination • heavy metals • pesticides • absence of aflatoxins • ochratoxin A • foreign matter • loss on drying • total ash • residual solvents • identification of cannabis • identification of active ingredients?

We support this proposal to allow testing for assessment against the minimum quality standard to be undertaken at ISO/IEC 17025:2017 accredited laboratories.

It was previously raised by Zeacann and others, including the laboratories themselves, that no testing laboratory in New Zealand can currently perform all the tests required by the MQS.

Zeacann further supports removing references to specifications from the regulations and instead referring to the pharmacopoeias. We also urge the MCA to adopt the higher levels of microbial contamination allowed in Ph Eur than has been currently accepted under the NZ scheme. Other countries have chosen those higher levels without any significant issues.

The specification for some heavy metals written into the regulations is also different to that in Ph Eur, meaning products made to “EU GMP” cannot meet the NZ standard, and vice versa. This has been a huge barrier which was raised in previous submissions. Zeacann therefore strongly supports this proposed change to introduce more flexibility and pragmatism by no longer specifying testing requirements in the regulations.

7) Dosage products may only include an excipient for which there is a monograph in the European Pharmacopoeia. What is your opinion on allowing the use of excipients with monographs from the British Pharmacopoeia and/or United States Pharmacopoeia in dosage products?

We support this proposal to allow the use of excipients with monographs in the British and US Pharmacopoeias, Consideration should be given to others such as the ayurvedic pharmacopoeia of India, and it should be allowed to also use the techniques and specifications in those Pharmacopoeias in addition to excipients.

8) Do you consider that the current tests, test methods and associated limits specified in the minimum quality standards are the most appropriate? If not, what alternative tests, test methods and associated testing limits would you like to see incorporated into the minimum quality standard? If you would like to see certain tests included, please specify which pharmacopoeia (including version) you are referring to.

There are problems with several limits currently specified in the minimum quality standard:

  • Heavy metals – the Medicinal Cannabis Agency adopted unique limits that are inconsistent with overseas customers or suppliers;

  • Microbe count – MCA also adopted an option that is the “world’s toughest”, meaning flowers must be irradiated. NZ growers can’t meet these standards or even get irradiated, and are also blocked from exporting material or products;

  • Pesticides – there are specified tests that cannot be performed in New Zealand. In hindsight, it was a mistake to write these into the regulations.

We do not support mandating the test methods – that should be up to manufacturers and testing laboratories to innovate and validate.

9) It can be difficult to measure very low levels of active ingredients in cannabis-based ingredients and medicinal cannabis products and controlling very small levels of active ingredient within specified ranges can be of limited value. Would you agree with allowing ‘less than’ assay limits to be applied to the stated content of active ingredients when they are present at very low levels in cannabis-based ingredients and medicinal cannabis products?

Yes, Zeacann supports this proposal. By requiring this additional testing and control not required in other jurisdictions, the current approach has made manufacture and importing more difficult than expected and prevented the local availability of products widely available overseas.

10) Due to the variable cannabinoid content in cannabis biomass, the assay limits of 90-110% of stated content can be difficult to achieve, and may not be appropriate for some simple full spectrum cannabis-based ingredients. Would you agree with removing the current assay limits for active ingredients in cannabis-based ingredients, and allowing manufacturers to determine their own assay limits in accordance with GMP?

Yes, Zeacann supports this proposal, with the caveat that accuracy is important to prescribers and patients and wider allowances could risk “ripping off” patients if the material inside is actually substantially weaker than claimed. This could also cause difficulties with dosing – either underdosing or taking more than is intended.

We suggest if this proposal is accepted, that the assay limits be included in labelling so that prescribers and consumers are aware of the possible ranges.

11) Currently, cannabis-based ingredients or medicinal cannabis products must be packed in a container made of a material that complies with chapters 3.1 and 3.2 of the European Pharmacopoeia. However, under GMP the manufacturer is already responsible for ensuring that any container used to store an ingredient is made with material that does not alter the quality of the ingredient. Would you agree with allowing cannabis-based ingredients that are stored and manufactured into medicinal cannabis products at the same site to be stored in appropriate containers consistent with GMP?

Yes, we support this proposal, It should not be necessary to restrict containers to those made of a material compliant with 3.1 and 3.2 of the European Pharmacopoeia – especially if the British and American pharmacopoeias are accepted.

To reduce costs and speed up availability, manufacturers should be allowed to choose a container that maintains the quality and desired shelf life of their product through ICH-standard stability trials. For example, manufacturers be able to use food-grade containers if their product is shown to be stable in that type of container.

12) Whilst cannabis seeds can be supplied within New Zealand to the holder of a medicinal cannabis licence or to a person authorised to receive medicinal cannabis seeds under a medicinal cannabis licence, medicinal cannabis seed cannot be exported. Would you agree with allowing the export of cannabis seed under the Scheme? And if so, would you agree with enabling this through the ‘cultivation’ and ‘nursery’ activities on a medicinal cannabis licence?

Yes, Zeacann supports allowing cannabis seeds to be exported under the medicinal cannabis scheme via a cultivation or a nursery activity on a Medicinal Cannabis licence. The export of cannabis root stock and tissue culture should be permitted in the same way.

13) As the Agency has only ever issued medicinal cannabis licences with a ‘nursery’ activity for seed supply purposes, would you agree for the nursery activity to be renamed ‘seed supply’ and for the importation of cannabis plants to be removed from this activity?

Zeacann does not support renaming nursery activity to ‘seed supply’. To the contrary, we urge widening the nursery activity to include supply of tissue culture, cuttings and seedlings. Importation of plants, root stock and tissue culture should be maintained in the nursery activity while also permitted in the cultivation activity.

Additionally, we would be interested in your preliminary thoughts on whether we should consider removing the requirement for New Zealand exports of domestically manufactured cannabis-based ingredients or medicinal cannabis products to meet the minimum quality standard. Please note that export requirements may also be affected by the Therapeutic Products Bill that was recently introduced into Parliament and there will be an opportunity to provide feedback on the Bill during the Select Committee stage.

Yes, we strongly support this. Existing rules already provide for manufacturers to set the standards for cultivators who supply them. It makes sense that exports should also be assessed by what the recipient requires, not the NZ Minimum Quality Standard.

The MQS should apply only to products supplied within New Zealand. Furthermore, New Zealand should adopt the Australian approach of specifically exempting medicinal cannabis ingredients or products that are “export only” from meeting the MQS (in their case, TGO 93 standard).

3. Additional changes to lower costs and increase choices.

Zeacann believes further changes are required, in addition to what has been proposed by the Medicinal Cannabis Agency.

A full review of the entire scheme and regulations

We need to reduce costs for patients so that access is not determined by their income and enable more straightforward production and supply so that more locals can participate and share any economic benefits.

For example, the costs of compliance could be reduced by allowing multi-year and multi-site licenses. Participation in the industry and equitable sharing of any economic benefits could also be increased by separating cultivators and manufacturers so that licence holders could not perform both activities.

This would encourage cultivators who are not currently participating to invest in facilities and grow under contract. Manufacturers in turn would no longer by vertically integrated and capturing all the value chain for themselves but would support growers and concentrate on adding value through innovation and development of markets.

Allow ‘GPP’ batch-tested herbal products

This received strong support during the original consultation on the scheme, so it was a surprise to find the herbal pathway was dropped from the final regulations, which were adopted under a truncated process with no further consultation.

Many of the issues subsequently facing providers resulted from GMP manufacture and the MCA taking a strict interpretation of the requirements (for example, requiring the option for microbial count that is the lowest, whereas other jurisdictions have opted for other, higher, limits that are permitted in the European Pharmacopoeia).

Allowing only GMP manufacture has increased costs and made local production unviable. This has in turn created equity issues. Access to medicines is restricted to those on higher incomes (or, conversely, buying overpriced cannabis medicines reduces disposable incomes for already poor people), while participation in the industry and the ability to enjoy any economic benefits is limited to Big Business and wealthy investors with deep pockets.

Whereas producing GMP herbal medicines requires every crop to be the same (within assay limits), GPP allows for the natural variation that occurs between crops. We expect this would greatly lowers costs of production while allowing more growers to participate.

In both cases the crops are tested, with strengths are printed on the label. The only difference for prescribers and patients would be an adjustment in dosage to cater for any variation in strength.

For producers the difference would be huge. This approach of allowing “batch tested” crops would greatly reduce costs, as it has in Canada and US states. We believe this would do more to lower costs, and widen participation beyond millionaires, than any other single change.

Remove the de facto blocks on pharmacy compounding

Compounding is where a pharmacist prepares a customised prescription for a patient. For medicinal cannabis it offers immediate production, lower cost compared to building expensive manufacturing facilities and, for less common conditions, there may be dose formats more suitable than verified products.

Zeacann has partnered with CompoundLabs for compounding medicinal cannabis, which is allowed in Germany and the UK, but we found it is not feasible in NZ because (aside from an exception for synthetic CBD) current rules require GMP manufacture, product quality assessments costing $15,410, and lab testing for every batch.

These are not required for compounding other medicines. This is a case of cannabis medicines being treated differently to other medicines, which was not the goal of the scheme. There should be no batch testing or assessment against the MQS required for pharmacy compounded medicines, given any cannabis-based ingredients would have been assessed as meeting the MQS. Bringing consistency to this area would allow a variety of cannabis-based dose forms to be produced more quickly and affordably.

Allow over-the-counter access to low-dose cannabidiol (CBD).

The Medicinal Cannabis Agency should support Medsafe in rejecting the recent recommendation by the Medicines Classification Committee to not harmonise with Australia.

CBD is non psychoactive and has a remarkable safety profile. It is well tolerated with a very low incidence of side effects. Any adverse effects have generally only been observed at very high doses, which would usually only be taken by complex patients under the care of a specialist/s.

Zeacann was one of five organisations to provide a submission[3] to the MCC and has recently notified an objection to their recommendation which we believe was made in error and without proper consideration of the evidence given to it and without sufficient weight given to the importance of trans-Tasman harmonisation.

We strongly support CBD Products manufactured or assessed under the Scheme be made available over-the-counter in pharmacies, in harmonisation with Australia.

Products made from hemp for non-therapeutic purposes should be exempt from the Scheme

Hemp-derived wellness products with no therapeutic claims should be available on general sale in stores. This is the case in all of Europe, Canada, and the United States. This should only apply to natural cannabinoid content and exclude chemically synthesised cannabinoids.

Allow limited marketing of cannabis products that have been assessed as meeting the MQS.

The Medicines Act and regulations currently prohibit this on the basis the assessed products are officially “unconsented”, which has resulted in widespread confusion and lack of information about products, prices, and availability.

Pharmacies and other providers have wildly varying prices, which causes unnecessary stress and confusion for patients and reduces participation in the Scheme. This could be resolved by creating an exemption to allow for the communication of prices and availability of products assessed under the Medicinal Cannabis Scheme that is not in the form of paid advertising.

Increase the availability of vaporisers

This is especially important with flower products approved for inhalation using a vaporiser. The current regulations only allow the supply of a vaporiser that has been approved as a medical device in another jurisdiction. This limits the range of vaporisers to only a few highly expensive models, creating additional equity issues for many patients.

Zeacann recommends also allowing vaporisers that have been approved or are prescribed under medicinal cannabis schemes in other jurisdictions. One example is the Oleo Vaporiser, which is prescribed by doctors in Ireland under their medicinal cannabis scheme. The retail price of this flower vaporiser is roughly one-quarter the cost of the ‘gold standard’ vapes from Storz & Bickel (owned by Canada’s Canopy Growth).

Zeacann secured the rights to distribute the Oleo medical herbal vaporiser in New Zealand, with the goal of having a more affordable product available for patients. The MCA informed us the device did not meet the requirements of the current regulations. We recommend amending this so local patients can access a wider range of more affordable harm reduction devices which are available to patients in in other jurisdictions with similar medicinal cannabis schemes.

4. Summary of recommendations

Zeacann generally supports the proposed changes, with some caveats noted above.

In addition, we urge:

  • A full review of the entire scheme and all the regulations, with the goal of reducing costs for patients and encouraging wider participation in the industry;

  • Allow a tandem pathway for non-GMP herbal products, to greatly increase affordability.

  • Remove the de-facto blocks on pharmacy compounding

  • Allow limited marketing of cannabis products that have been assessed as meeting the MQS;

  • Confirm that non-therapeutic products derived from hemp are allowed on general sale and regulated as foods or natural health products;

  • Allow over the counter pharmacy access to low-dose CBD;

  • Increase the availability of vaporisers.

Ngā mihi,

Chris Fowlie CEO, Zeacann Ltd


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