The New Zealand Medical

Cannabis Market:

An analysis of potential size, regulatory status, and

wider social impacts.

Prepared for Puro New Zealand

Dr Jay Whitehead Agribusiness Consultant

The AgriBusiness Group July 2019

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The information in this report is accurate to the best of the knowledge and belief of the consultants

acting on behalf of the Puro NZ. While the consultant has exercised all reasonable skill and care

in the preparation of information in this report neither the consultant nor The AgriBusiness Group

accept any liability in contract, tort or otherwise for any loss, damage, injury or expense, whether

direct, indirect or consequential, arising out of the provision of information in this report

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Puro New Zealand | Profile

Puro commissioned The AgriBusiness Group to provide an analysis of the New

Zealand and International medical cannabis market; its regulatory status, potential

size, and wider impacts for New Zealand society.

Puro are contract farmers who will be cultivating both cannabis and high CBD hemp

for medical purposes. Puro currently has two sites in Marlborough. The first is 9.4ha

at Waihopai Valley which will be the headquarters, research facility and location for

indoor growing of medical cannabis. This site has the option to expand to 33.5ha if

needed. The second site is 25ha at Kekerengu which Puro will use for outdoor

growing of high CBD hemp. International experts have tested both sites and

determined them to be ideal cultivation sites.

Puro will be growing under contract for pharmaceutical companies and other off-

take partners, who will then further develop their product into a prescription

medicine. Puro will develop, grow, and harvest the product and sell to clients in

either dried flower or extracted oil format using advanced methodologies. The price

point and level of processing will vary from contract to contract.

Additionally, Puro plans to export subject to legislative change and license approval.

It is the vision of Puro that New Zealand can position itself to deliver a premium

product on the international stage, drawing on Marlborough’s climatic parameters

and New Zealand’s reputation and tradition of agricultural and scientific excellence.

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Executive Summary

New Zealand’s relationship with medical cannabis is in a transitionary period. The introduction of

the Misuse of Drugs (Medicinal Cannabis) Amendment Act in 2018 opened a pathway for wider

access to medical cannabidiol (CBD) and tetrahydrocannabinol (THC) products. The new

legislation facilitates the introduction of a ‘medical cannabis scheme’ which will provide a set of

rules and guidelines for how medical cannabis can be grown, manufactured, sold, and prescribed.

At present, however, details on how the medical cannabis scheme will function have not been

finalised. Anecdotal news reports from government predict this would occur in July 2019 1 ,

however, at the time of this publication, full details on the medical cannabis scheme have yet to be

released.

Puro commissioned The AgriBusiness Group to provide an analysis of the New Zealand medical

cannabis market, its regulatory status, potential size, and wider impacts for New Zealand society.

Internationally, several countries and American states have established medical cannabis industries.

The global medical cannabis market is proliferating and has been predicted to exceed $55 billion

USD by 20242. The guidelines for how the New Zealand scheme will operate has not been finalised.

Additionally, as the medical cannabis market is a new market in New Zealand, there is limited

information on key metrics such as patient numbers, dosage requirements, and pricing of products.

Accordingly, in this report, we use two methods to forecast the potential New Zealand market,

both of which provide an ambitious and conservative estimate of size. Due to a lack of published

data and future regulatory requirements, this report makes several assumptions which we detail

throughout. We have endeavoured to make these assumptions conservative where possible.

The first method estimates the number of patients in New Zealand which could potentially qualify

for medical cannabis treatment. This is a measure of the total addressable market. International

medical cannabis schemes were reviewed to determine a list of conditions which commonly qualify

for medical cannabis treatment. The scientific literature was then consulted to determine typical

dosages of THC/CBD used to treat these conditions, and market data was analysed to determine

an average per gram price of CBD and THC. Having also determined the number of New Zealand

patients who have the potentially qualifying conditions, we calculated the size of the total

addressable market for medical cannabis in New Zealand. This assumes that the conditions will

be included in New Zealand’s medical cannabis scheme and that the market price will be similar

to international prices.

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The results from the first method are present as a high and low estimate as follows:

Total Addressable Market

Upper Estimate Lower Estimate

Market size per annum (CBD/THC) NZD

$2,392,400,000 $388,080,000

In an earlier draft of this report we excluded chronic pain due to the uncertainty around its

inclusion in the medical cannabis scheme. However, recent signals from the Ministry of Health

Suggest that chronic pain will not be excluded. It is noteworthy that approximately 82 percent of

the upper estimate and 62 percent of the lower estimated stated above is a result of the potential

chronic pain market for medical cannabis.

The total addressable market describes everyone who could potentially qualify for medical

cannabis treatment. Not everyone in this group will become a medical cannabis patient. In the

second method, we extrapolate international medical cannabis markets and adjust them to the

New Zealand population. We consider medical cannabis patients as a percent of the population

across 27 American states and four additional countries. This ‘market penetration’ ranges from

0.01 percent up to 3.8 percent. We also consider average patient spending on medical cannabis

products. By considering two monthly spending and market penetration scenarios, we develop the

following matrix of potential market size:

Total Serviceable Market

Average USA 1.10% Average International 0.35%

52,734 NZ Patients 16,779 NZ Patients

Spending (NZD)

600 $ 379,684,800 $ 120,808,800

450 $ 284,763,600 $ 90,606,600

Where the first method provides an estimate of the total addressable market, i.e. the entire pool of

potential customers, the second method provides a closer approximation of the total serviceable

market, i.e. the proportion of the population who are likely to be consumers. As the serviceable

market is a subset of the addressable market, the estimates are lower. The high range estimate of

the total serviceable market aligns with a previous forecast3 for the New Zealand medical cannabis

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market of $360 million NZD by 2028. If the USA or Canadian markets were to be considered a

proxy for the future New Zealand market, we would expect the New Zealand market to align more

closely to the high-end forecasts, given the market is allowed approximately five years to reach a

sufficient level of maturity.

In addition to the potential market forecasts, the report also considers some of the wider social

impacts that can occur through the establishment of a medical cannabis market. The introduction

of legalised medical cannabis has been shown to have positive effects on employment, crime, and

wider health issues (e.g. drug addiction and smoking). We explore these issues and their

significance for New Zealand. We also consider the research, development, and value add potential

that New Zealand could contribute to medical cannabis products globally. New Zealand has a

long-established history of leading research and development in agricultural industries. This, along

with other factors has allowed New Zealand to position its products internationally as high-value

offerings. There is the potential for New Zealand to apply the same approach to the global

cannabis market, positioning New Zealand products as unique high-value offerings, backed by

robust science and quality standards.

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Contents Puro New Zealand | Profile ..................................................................................................................... 3

Executive Summary .................................................................................................................................... 4

1 Introduction ........................................................................................................................................ 8

1.1 Therapeutic qualities of cannabis ............................................................................................. 9

2 Regulation ......................................................................................................................................... 11

2.1 Global regulatory situation...................................................................................................... 11

2.2 New Zealand’s medical cannabis regulation......................................................................... 12

2.2.1 The Medical Cannabis Scheme ...................................................................................... 13

2.2.2 Cannabidiol (CBD) .......................................................................................................... 13

2.3 Cannabis Businesses in New Zealand ................................................................................... 14

3 Social Impacts................................................................................................................................... 15

3.1 Health ......................................................................................................................................... 15

3.2 Crime .......................................................................................................................................... 16

3.3 Employment.............................................................................................................................. 16

4 Estimating the New Zealand Market for Medical Cannabis ..................................................... 18

4.1 Method 1: Total Addressable Market .................................................................................... 18

4.2 Method 2: Total Serviceable Market...................................................................................... 23

4.2.1 USA .................................................................................................................................... 24

4.3 Summary of the potential New Zealand Medical Cannabis Market. ................................ 26

4.4 International Medical Cannabis Market. ............................................................................... 27

4.5 Research, Development, and Value Add .............................................................................. 28

5 Summary............................................................................................................................................ 29

Appendix A – Global Regulation ........................................................................................................... 30

Appendix B – Scientific Studies of Medical Cannabis Dosage Requirements ................................. 34

Sources Cited ............................................................................................................................................. 35

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1 Introduction

The development of a functional medical cannabis industry in New Zealand shows promise in

providing a range of social and economic benefits. Medical cannabis has been tightly regulated in

New Zealand. The first step towards liberalising medical cannabis in 2016 allowed doctors with

specialist oversight to prescribe Sativex (a medical cannabis product) for its consented use (as an

add-on treatment in Multiple Sclerosis) without approval from the Ministry of Health. Recent

developments in the legislation have further liberalised medical cannabis restrictions and brought

about a new medical cannabis industry. The Misuse of Drugs (Medicinal Cannabis) Amendment

Act 2018 was introduced to facilitate access to cannabidiol (CBD) products with up to two percent

other cannabinoids (including Δ9-tetrahydrocannabinol (THC)). In addition, the new legislation

provides a legal basis for the development of a medical cannabis scheme, the details of which are

still being determined.

Medical cannabis has multiple meanings. For doctors, medicinal cannabis might refer to an

approved pharmaceutical product, such as Sativex. For the wider public, medical cannabis might

refer to raw plant material grown by themselves. The gap between these two extremes is vast. The

debate on medical cannabis regulation often seeks to provide a compromise between the strengths

and weaknesses from each end of the medical cannabis spectrum. In this report, medical cannabis

is understood to be a legal product produced from the cannabis plant and distributed and

consumed within a regulatory framework. This contrasts with illicit cannabis which has been

grown, processed, and supplied illegally. This report does not consider recreational markets, animal

health markets, or other alternative markets such as health supplements.

The New Zealand public has demonstrated strong support for the expanded access to medical

cannabis products. In a 2017 Curia poll, seventy-eight percent of New Zealanders agreed there

should be no criminal penalty for “growing and/or using cannabis for any medical reasons, such

as pain relief”4. Despite a high degree of uncertainty around the final design of a New Zealand

medical cannabis scheme, the government's positive policy signals and public support have likely

been a decisive factor in multiple large commercial investments being made in the New Zealand

medical cannabis industry.

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This report has three primary purposes; to describe the current state of international and domestic

legislation on medical cannabis, to review published studies on the social impacts of medical

cannabis, and to provide an estimate of the potential New Zealand medical cannabis market.

In this report, we provide estimates of the potential value of the New Zealand medical cannabis

industry, as well as discussing some of the wider social and economic impacts. There is some

uncertainty around how the New Zealand medical cannabis market will function as the guidelines

have yet to be published. Additionally, as the medical cannabis market is a new market in New

Zealand, there is limited information on key metrics such as patient numbers, dosage requirements,

and pricing of products. For this reason, two different methods are used to estimate the potential

size of the market. Additionally, a range of estimates is given based on different assumptions. Due

to the uncertainties around the operation of a new medical cannabis market in New Zealand, there

are several limitations to this report, and findings should be interpreted with care. In response to

this uncertainty, high and low estimates are given.

1.1 Therapeutic qualities of cannabis

Cannabis has a long history as a medicinal product and is one of the oldest plants cultivated by

humans5 . While cannabis has been put forward as a solution to multiple medical syndromes

including chronic pain, spasticity, cancer, seizure disorders, nausea, anorexia, and infectious

diseases, its controversial status through history has impeded a clear scientific understanding of its

efficacy6. As regulatory regimes loosen, allowing medical science greater freedom to investigate the

medical potential of cannabis, a body of science is growing in support of the use of cannabis as a

treatment for a range of medical conditions.

A 2017 report7 by the United States National Academies of Sciences, Engineering and Medicine

found that there is conclusive or substantial evidence that cannabis or cannabinoids are effective:

• for the treatment of chronic pain in adults;

• as anti-emetics in the treatment of chemotherapy-induced nausea and vomiting; and

• for improving patient-reported multiple sclerosis spasticity symptoms.

There is moderate evidence that cannabis or cannabinoids are effective for:

• improving short-term sleep outcomes in individuals with sleep disturbance associated with

obstructive sleep apnoea syndrome, fibromyalgia, chronic pain, and multiple sclerosis.

There is limited evidence that cannabis or cannabinoids are effective for:

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• increasing appetite and decreasing weight loss associated with HIV/AIDS;

• improving clinician-measured multiple sclerosis spasticity symptoms;

• improving symptoms of Tourette syndrome;

• improving anxiety symptoms in individuals with social anxiety disorders; and

• improving symptoms of post-traumatic stress disorder.

Often the low strength of evidence is due to the lack of good clinical research rather than the

existence of studies showing that cannabis was not effective for those conditions. In reviewing

medical cannabis schemes throughout the world, the following nine conditions appear frequently

as qualifying for medical cannabis treatment:

1 Alzheimer’s Disease (or other dementia)

2 Cancer Chronic Pain

3 Epilepsy

4 Glaucoma

5 HIV/AIDS

6 Multiple Sclerosis

7 Opioid Use Disorders

8 Parkinson's Disease

9 Rheumatoid Arthritis

As the medical cannabis market in New Zealand is in its infancy, both the current state of research

into medical cannabis treatments and the functioning of other jurisdiction’s medical cannabis

schemes may influence the design of how the New Zealand scheme may function.

It must be noted that recreational cannabis has also been shown to have adverse effects, for

example, there is substantial evidence of a statistical association between recreational cannabis use

and the development of schizophrenia and other psychoses, with the highest risk among the most

frequent users8. However, this report focuses on the medical use of cannabis under a regulated

medical regime and does not consider recreational use.

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2 Regulation

2.1 Global regulatory situation

The UN currently classifies cannabis as a Schedule I substance under the Single Convention on

Narcotic Drugs of 1961. As a result, the plant is broadly prohibited internationally. Earlier this

year, the WHO’s Expert Committee on Drug Dependence (ECDD) called for cannabis and

cannabis resin to be removed from Schedule IV of the 1961 Single Convention on Narcotic Drugs9,

the most restrictive of all categories and reserved for substances will little or no therapeutic value.

The report produced by the ECDD recommends several changes to how cannabis is scheduled

with the following implications:

• The scheduling of cannabis in the international drug control conventions wouldn’t be as

restrictive as it is now, because it would be removed from Schedule 4 of the 1961

Convention, the category reserved for the most dangerous substances.

• THC in all forms would be removed from the 1971 Convention and placed with cannabis

in Schedule 1 of the 1961 Convention, significantly simplifying cannabis classification.

• Pure CBD and CBD preparations containing no more than 0.2% THC would not be

included in any way in the international drug control conventions.

• Pharmaceutical preparations containing 9-THC, if they follow certain criteria, would be

added to Schedule 3 of the 1961 Convention, recognizing the unlikelihood of abuse.

Taken together, the recommendations would have significant implications for the global cannabis

industry. The 193 Members of the U.N. received the cannabis-rescheduling recommendations in

January 2019. At the 62nd session of the Commission on Narcotic Drugs in March 2019,

representatives from the Member Nations were set to vote on whether to accept or reject them,

an outcome that would influence cannabis policies around the world. The CND announced its

conclusion to delay the vote in a tweet sent on March 1910, saying its decision was “postpone the

consideration of @WHO cannabis-related recommendations” and “to provide [Member States]

with more time to consider the recommendations.” The vote had already been delayed once before,

when the CND decided the issue would not be taken up at its March 7 meeting in Vienna. The

next opportunity to reconsider the recommendations has not yet been announced.

The current classification of cannabis internationally places restrictions on exports and imports of

cannabis products. Despite the strict international regulatory regime, several countries and

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American states have legalised medical cannabis use. Each jurisdiction has approached legalisation

in a different way. An overview of different regulatory frameworks is provided in Appendix A.

2.2 New Zealand’s medical cannabis regulation

New Zealand’s legislation on cannabis is in a transitionary state. The New Zealand government

has recently passed a Bill increasing access to “medicinal cannabis”11. The Government now has

one year (from December 2018) to determine the regulations for a medicinal cannabis scheme.

Alongside these reforms, a referendum in 2020 will consider whether cannabis should be legalised

for recreational use.

The Misuse of Drugs (Medicinal Cannabis) Amendment Act received Royal Assent 18 December

2018, which means it is now law. The Act provides an exception and statutory defence for

terminally ill patients who obtain or use botanical cannabis. This is a temporary defence to provide

patients security until domestic production of cannabis-based medicines is established.

The New Zealand Drug Foundation criticised the Act for not going far enough for many patients

and their advocates12. For example, the Government didn’t agree to extend the criminal defence

to those with a severe and debilitating illness, patients’ families, or compassionate growers.

The Act states:

… a person who has a certificate from a medical practitioner or nurse

practitioner certifying that the person requires palliation may procure, possess,

consume, smoke, or otherwise use any plant or plant material of the genus

Cannabis or any cannabis preparation

The key word describing who can access medical cannabis products is ‘palliation’. Currently,

around 25,000 people in New Zealand benefit from palliative care. Until the new regulations,

licensing rules and quality standards are put in place under the Medical Cannabis Scheme; it is

unknown whether other conditions (e.g. chronic pain) will be included. However, Health Minister

Dr David Clark has stated in 2018 that:

“Today’s vote in Parliament clears the way for the creation of a medicinal

cannabis scheme that will allow New Zealand companies to manufacture

medicinal cannabis products for both the local and international market.

Regulations, licensing rules and quality standards will be set on expert advice

within a year of the law coming into effect. These medicinal products will be

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available on prescription. This will be particularly welcome as another option for

people who live with chronic pain.”13

The suggestion is that the Medical Cannabis Scheme will make access to medical cannabis products

available for a wider range of conditions.

2.2.1 The Medical Cannabis Scheme

The Medical Cannabis Scheme is currently being developed by the Ministry of Health (MoH) and

will be released in late 2019. The scheme will enable domestic commercial cultivation and

manufacture of medicinal cannabis and implement three elements:

1. a licensing regime.

2. introduction of standards for the quality of medicinal cannabis products and all stages of

production.

3. establishment of a medicinal cannabis agency.

The scheme will allow local strains of cannabis to be used in developing a domestic medicinal

cannabis market. Enabling domestic cultivation and manufacture is expected to make quality

medicinal cannabis products more readily available. This will remove a barrier for patients

accessing medicinal cannabis, as health practitioners will be able to prescribe these products with

confidence. Health Minister Dr David Clark has said14 the scheme will "speed up access to a

greater range of quality medicinal cannabis products", and give those companies looking to

develop those products "certainty and a clear timeframe". There are currently significant barriers

to accessing legal products including; difficulty importing, a lack of quality products, high costs,

an extensive bureaucratic procedure, and a lack of knowledge from medical professionals. The

scheme is expected to reduce these barriers. Until the scheme is implemented, licences for cannabis

can only be issued under the Misuse of Drugs Act to cultivate or extract cannabis for medical or

scientific research, including clinical trials15. Commercial cultivation is not yet permitted.

2.2.2 Cannabidiol (CBD)

The passing of the Misuse of Drugs (Medicinal Cannabis) Amendment Act means some products

containing cannabidiol (CBD) are now prescription medicines only16. The intent of declassifying

CBD as an illegal substance is to make it easier to access CBD products. However, there is

currently a limited range of CBD products available in New Zealand. Additionally, there are strict

export restrictions on products sourced from some other countries which will continue to impact

the supply of CBD products in New Zealand. However, the range of products available in New

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Zealand is expected to increase once domestic cultivation and manufacture of medicinal cannabis

products are enabled and established under the medical cannabis scheme.

Currently, export is only allowed for research or clinical trials and licences only issued if the

importing country has issued a valid licence to import the product17. It is possible that these

restrictions may change with the introduction of the Medical Cannabis Scheme.

2.3 Cannabis Businesses in New Zealand

As of June 2019, the Ministry of Health had granted a total of seven cultivation licences to New

Zealand organisations. Hikurangi Cannabis, Cannasouth and Helius Therapeutics are among those

five. Other potential recipients could be Setek, Soma Group, Lincoln University and Indomira,

however there is less certainty around these companies. While there are multiple registered

companies seeking to provide medical cannabis products, the majority are small, with little financial

or institutional support. Below, a brief outline is given of four companies which are mentioned

often as being at the forefront of the medical cannabis industry in New Zealand.

Hikurangi Cannabis was founded in 2015 by a group of marae representatives on the East Coast

near Ruatōria. The company grew its first crop of industrial hemp in 2016. A crowdfunding

campaign on PledgeMe saw Hikurangi Cannabis raise $2.4 million. The company has also attracted

institutional investors, established partnerships with international organisations, researchers, and

local growers, and employed around 22 staff.

Helius Therapeutics has acquired two large sites in Auckland which are being developed to create

a controlled environment for the cultivation and production of high-grade cannabis products

suitable for export. Investor Guy Haddleton has helped Helius Therapeutics to raise over $15

million from local investors.

The founders of Cannasouth have been involved in researching and cultivating industrial hemp

since 2002. The company itself was registered in 2017 and has expressed a desire to list on the

NZX. Cannasouth has partnered with the University of Waikato and has received research grants

from the Agricultural and Marketing Research and Development Trust and Callaghan Innovation.

Zeacann was established in 2017. It has partnered with the Auckland University of Technology in

order to facilitate clinal trials and new product development. Zeacann has also begun development

of an online portal ‘PharmaCann’ to provide a cross-business distribution platform.

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3 Social Impacts

There are multiple social and induced economic impacts associated with both the use of cannabis

products and the development of a legal cannabis industry. The State of Victoria in Australia

produced the following infographic to outline the extended positive impacts of the Victorian

medical cannabis industry (Figure 1).

Figure 1: Benefits of a strong medicinal cannabis industry18

A review of the literature indicates that there are three areas of social impact where information

of reasonable quality is available, health (beyond direct treatment effects), crime, and employment.

Each of these areas will be addressed in the following sections.

3.1 Health

In addition to the direct treatment effects of medical cannabis, there are other beneficial indirect

and induced health effects which have been documented. Research has demonstrated that there is

a small decrease in alcohol and tobacco consumption after the legalisation of medical cannabis19.

While the decrease may be minor, the long-term health impacts of tobacco and alcohol abuse are

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significant. It has been shown that the introduction of medical marijuana law resulted in a lower

probability of binge drinking, and fewer drinks consumed in each drinking session20. Another study

found a decrease in alcohol poisoning deaths after the introduction of medical marijuana laws21.

Medical cannabis legalisation has also been found to reduce rates of prescription opioid overdose

deaths22 . In addition, cannabis products are increasingly being considered as a substitute for

opioids as they are less-addictive and possess no risk of overdose. The substitute potential of

medical cannabis is significant, in one study 75.5% (n = 305) of respondents cited that they

substitute cannabis for at least one other substance23.

3.2 Crime

The introduction of medical cannabis laws has been shown to reduce crime rates. The introduction

of medical marijuana laws led to a decrease in violent crime in states that border Mexico24. These

results support a theory that decriminalisation of the production and distribution of marijuana

leads to a reduction in violent crime in markets that are traditionally controlled by criminal

organisations. Since California passed medical marijuana legislation more than two decades ago

violent and property crime rates have dropped by 20%25. In explaining the reason why this decrease

occurred, the authors of this study suggest that

“California’s medical marijuana law may have shrunk the marijuana black market

and its associated violence. It may have helped to reallocate police resources

towards deterring crime instead of enforcing drug laws. The presence of

dispensaries may also deter crime, as they are required to deal in cash and thus

invest heavily in security26.”

There is also an important cultural element to cannabis-related crime in New Zealand. Māori are

more likely to face a conviction for drug use than other ethnicities. Currently, Māori make up 42% od

low-level drug convictions but only 11% of the population27. The effect of establishing a functional

medical cannabis scheme in New Zealand may, therefore, have a more significant impact on Māori

communities.

3.3 Employment

The establishment of a well-functioning medical cannabis market can result in the creation of

multiple employment opportunities. The Victoria State Government28 produced a report detailing

the job requirements for a medical cannabis industry. The report states:

17

“… 80 per cent of the workforce will comprise of entry-level horticulture

workers, as much of the commercial facilities will commence operations with

limited automation. The remainder 20 per cent of the workforce are expected to

be made up of mid-level and high-level professionals. An anecdotal report from

a Victorian horticultural expert, suggests that 200 to 400 workers are required

for a 100,000 square metre cultivation facility. The workforce capacity will

depend on the cultivation method and other seasonal factors. According to this

horticultural expert, a recent approved Australian facility is planning to employ

175 staff for its 10,000 square metres cultivation and production facility. Initial

knowledge and skills required in Victoria’s medicinal cannabis industry will focus

on scientific research, cultivation and business development. Employment in

construction and facility management is expected to commence in the next 12

to 24 months, as most of the businesses are still in the process of applying for

their planning and building approvals.”

Depending on how the medical cannabis scheme is structured, there is the potential for a large

number of new companies to enter the market. In 2017 in Washington State, the cannabis industry

had 6,049 full-time (FTE) positions and paid total wages of $286.1 million USD29. A news report

from March 201930, based on an industry report, claimed that the medical cannabis industry was

the fastest-growing job market in the USA, adding 64,389 jobs in 2018 (a 44 percent gain), and

bringing the total number of jobs directly related to the industry to 211,000. The evidence suggests

there is significant potential employment potential in the creation of a medical cannabis industry.

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4 Estimating the New Zealand Market for

Medical Cannabis

Demand for medicinal cannabis in New Zealand will depend on which conditions and symptoms

are approved for medicinal cannabis treatment, recommended dosages, the range and type of

approved medicinal cannabis products, and doctors’ willingness to prescribe medical cannabis

products. Two methods are used to estimate the potential medical cannabis market in New

Zealand. The first method seeks to provide an estimate of the total addressable market while the

second method provides a closer indication of the total serviceable market. Due to uncertainty

inherent in any new market, high and low estimates are provided for each method, and the

assumptions which inform each estimate are described.

4.1 Method 1: Total Addressable Market

The first method considers conditions that are commonly approved for medical cannabis

treatment. It is assumed that patients will be given access to refined cannabis products in

medicinal-grade herbal form, or in its medicinal-grade product form (oils, tinctures, etc.). The

following conditions commonly qualify for medical cannabis treatment in multiple jurisdictions:

• Neoplasms (cancer)

• Glaucoma

• HIV/AIDS

• Alzheimer's disease and other dementias

• Parkinson's disease

• Epilepsy

• Multiple sclerosis

• Rheumatoid arthritis

• Chronic Pain

Based on this list of conditions, it is possible to estimate the number of potential patients in New

Zealand that would qualify for medical cannabis treatment. Figure 2 below presents the prevalence

of each of these conditions, and their trends over time in New Zealand.

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Figure 2 : Prevalence of medical conditions in New Zealand – excluding chronic pain (Source: Global Burden of Disease Study 201731)

Short Note on Chronic Pain

The Global Burden of Disease Study (2017) does not contain data on chronic pain. Chronic pain

is, however, a common condition medical cannabis products are prescribed for. Internationally,

general population surveys have been used to investigate the prevalence of chronic pain, producing

estimates across countries ranging from 10% to 30% of the total population32. Chronic pain

patients have the potential to make up the majority of a medical cannabis market. Early indications

from Ministry of Health (MoH), described by MoH manager Chris James at an information session

on 30th July 2019 suggest that there will be no limitations placed on what conditions medical

cannabis could be prescribed for by a doctor. This suggests that chronic pain will be a qualifying

condition for medical cannabis treatment. The 2015/16 New Zealand Health Survey reported the

prevalence of chronic pain at almost 21% in adults over 15 years, with little variation across the

main ethnicities33. This has increased from 16.9% in the 2006/07 New Zealand Health Survey34.

A separate study from Arthritis New Zealand and Phizer estimates the number of chronic pain

sufferers in New Zealand to be 13% of the adult population35. The number of New Zealanders

suffering chronic pain is likely to be between 623,220 and 1,006,740 people.

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Typical Dosages for Medical Cannabis Treatment

Each medical condition and stage of the condition is treated with differing quantities of THC and

CBD. There is no definitive source of information on medical cannabis dosage; however, a brief

scan of the literature provides some rough guidelines, as shown in Table 1. The literature reviewed

to provide these estimates of typical dosages can be found in Appendix B.

Table 1: THC and CBD treatment dosages

Condition Example Dosage

Cancer 3 mg THC

Glaucoma 5 mg THC 20 mg CBD

HIV/AIDS 10 mg THC

Multiple sclerosis 21.6 mg THC 20 mg CBD

Epilepsy 300 mg CBD

Rheumatoid arthritis 20 mg CBD

Parkinson's disease 2.5 mg THC 75 mg CBD

Alzheimer's disease and other dementias 2.5 mg THC 30 mg CBD

Chronic Pain 17mg THC

16mg CBD

Often, THC products are complemented with CBD products, sometimes within the same

medication. For example, the product Sativex contains 2.5 mg of CBD and 2.7 mg of THC per

dosage. Table 2 combines upper and lower estimates of patient numbers with upper and lower

(where available) estimates of dosage to estimate a range of potential demand for THC and CBD

in kg per annum.

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Table 2: potential demand for THC and CBD in kg per annum

Upper Estimate Lower Estimate

NZ Patients THC kg/yr CBD kg/yr Patients THC kg/yr CBD kg/yr

Cancer 212,449 233

162,167 178

Glaucoma 4,524 8 33 3,370 6 25

HIV/AIDS 6,531 24

2,409 9

Multiple sclerosis 4,313 34 31 3,479 27 25

Epilepsy 17,867

1,956 4,393

481

Rheumatoid

arthritis

19,441

142 15,430

113

Parkinson's

disease

10,940 10 299 7,028 6 192

Alzheimer's

disease and other

dementias

53,890 49 590 40,620 37 445

Chronic Pain 1,006,740 6,246 5,879 623,220 568 568

Total Patients 1,336,695

862,116

Total kg/yr

required

6,604 8,930

831 1,849

The results show that THC requirements vary by a factor of 10 times between the high and low

estimates, while CBD varies by a factor of 5. There are large variations in dosage suggestions

amongst different studies, for example, CBD dosages range from 1mg to over 1000mg in some

cases. Table 2 also illustrates the substantial proportion of use which could be ascribed to chronic

pain sufferers. This asymmetry is not unusual. Chronic pain is currently and historically, the most

common qualifying condition reported by medical cannabis patients in the USA (64.9 percent in

2016)36 . A limitation of Table 2 is that it describes chronic pain sufferers as a separate group, in

practice, there may be some cross over between chronic pain and other conditions; however,

chronic pain tends to be described in the medical literature as a standalone condition37.

Ascribing a dollar value to the potential market is difficult. Currently, Sativex, which is not funded

by drug-buying agency Pharmac, has been available in New Zealand since 2008. A prescription

through a district health board costs patients around $1200 a month, or $1500 if it is ordered with

a chemist38. It is unlikely that this high level of cost would be typical of patient spending in a future

medical cannabis market.

22

Data from the Australian medical cannabis markets are likely to provide a more accurate estimate

of potential pricing for a New Zealand market. At the low-end CBD products cost as low as $0.10

AUD per mg and THC products $0.16 AUD per mg, these costs are then marked up by an average

of 22% at pharmacies39. Using the marked-up Australian product costs along with the patient

information provided in Table 3 we can provide some estimates of market potential.

Table 3 : Method 1- estimates of market potential

Upper Estimate Lower Estimate

THC CBD THC CBD

Grams/yr required 6,604,000 8,930,000 831,000 1,849,000

Per gram price estimate (NZD)

$200 / g $120 / g $200 / g $120 / g

Total Value per annum (NZD)

$1,320,800,000 $1,071,600,000 $166,200,000 $221,880,000

$2,392,400,000

$388,080,000

At the high end, the total addressable market is estimated to be $2.3 billion and at the low end

$388 million NZD. The forecasts presented in Table 3 are based on multiple assumptions,

primarily:

• The medical cannabis scheme has not been finalised. How doctors will respond when given

greater freedom to prescribe medical cannabis products is also unknown. We have used

typical conditions drawn from existing medical cannabis schemes in response.

• The exact number of patients with each condition in New Zealand is unknown. A high

and low estimate is given, based on a robust health study (the GHDX40).

• Dosage suggestions for each condition differ vastly in the scientific literature. High and

low estimates are used based on a range of published scientific studies (Appendix B).

• The price of CBD and THC products under an expanded medical cannabis scheme in New

Zealand is unknown. The most recent pricing data from Australia is used as a guide for

New Zealand41.

The forecasts presented in this section are for the entire cohort of patients within each of the

potential qualifying conditions (i.e. 100 percent of the market). This is known as the total

addressable market. In practice, market penetration for medical cannabis products is significantly

lower as some of the market may choose not to consume. In the next scenario a different method

23

is used to provide an estimate of market penetration which will be closer to the total serviceable

market.

4.2 Method 2: Total Serviceable Market

The second method, like the first, assumes patients will be given access to refined cannabis

products in medicinal grade herbal form, or in its medicinal-grade product form (oils, tinctures

etc.). Rather than using potentially qualifying conditions and patient numbers, international case

studies are considered to determine typical market penetration for medical cannabis products. The

national per-annum consumption of medicinal-grade cannabis is estimated for each country or

state where data are available and then adjusted against the New Zealand population. Table 4 and

Table 5 provide an overview of medical cannabis patients as percent of population.

24

4.2.1 USA

Table 4 : Medical cannabis patients as percent of the population in the USA

USA State Number of medical

cannabis patients Population Medical cannabis patients as

percent of population

Maine 51,324 1,335,907 3.8%

Michigan 269,553 9,962,311 2.7%

New Mexico 52,260 2,088,070 2.5%

Montana 25,725 1,050,493 2.4%

California 915,845 39,536,653 2.3%

Arizona 162,528 7,016,270 2.3%

Colorado 88,946 5,607,154 1.6%

Hawaii 21,004 1,427,538 1.5%

Oregon 45,210 4,142,776 1.1%

Washington 80,818 7,405,743 1.1%

Vermont 5,313 623,657 0.9%

DC 5,679 693,972 0.8%

Connecticut 25,948 3,588,184 0.7%

Nevada 21,579 2,998,039 0.7%

Massachusetts 48,265 6,859,819 0.7%

Maryland 39,276 6,052,177 0.6%

Rhode Island 6,313 1,059,639 0.6%

Florida 108,981 20,984,400 0.5%

Delaware 3,588 961,939 0.4%

New Hampshire 4,753 1,342,795 0.4%

Pennsylvania 37,000 12,805,537 0.3%

New York 55,136 19,849,399 0.3%

New Jersey 20,445 9,005,644 0.2%

Illinois 21,800 12,802,023 0.2%

Minnesota 9,435 5,576,606 0.2%

Arkansas1 5,000 3,004,279 0.2%

Alaska 1,054 739,795 0.1% (Source: https://medicalmarijuana.procon.org/view.resource.php?resourceID=005889#9 As of May 2018)

Table 5 : Medical cannabis patients as percent of the population in other countries

Country

Number of medical

cannabis patients Population

Medical cannabis patients

as percent of population

Israel 22,000 42 8,712,000 0.3%

Canada 342,00043 37,060,000 0.9%

The Netherlands 341,60044 17,080,000 0.2%

Australia* 3,10045 24,600,000 0.01%

*The Australian market is newly established and has not yet developed into a well-functioning market. We have ensured Australia’s low market penetration rate does not unduly affect the market forecasts.

25

Table 4 and Table 5 demonstrate a wide variation in medical cannabis market penetration, from a

high of 3.8% of the population in Maine (USA) to 0.01% in the highly regulated Australian market.

On average, the USA has a penetration rate of 1.1%, while for the rest of the world, this rate is a

lower 0.35% on average. These two averages are used as the upper and lower bounds for

extrapolation to a New Zealand population in. The use of these average rates provides a

conservative range as government policy signals suggest New Zealand scheme is likely to be more

liberal than the Australian and Israel schemes, and more like the North American schemes.

Average consumption rates for medical cannabis patients can be used to determine market

potential in dollars. Reported dosages in Australia range from 1mg - 90mg per day for THC and

2.5mg - 1000mg per day for CBD, with average patient costs in Q1 2019 being $290 USD46.

Additional data from Illinois in the USA from 2019 shows average patient spending of $415 USD

a month47. Other sources provide monthly spending estimates of $408 USD48, $246 USD49, and

$150 USD50. It is likely that New Zealand would initially be at the high end of pricing. A high price

of $600 NZD (~$400 USD) and a low price of $450 NZD (~$300 USD) are used as estimates of

potential patient spending per month. In Table 6, a matrix of potential market penetration and

potential average monthly patient spending is used to provide a range of estimates. The matrix

estimates assume a period of time for market maturation in line with the experiences of other

countries and are therefore forecast to be reached by 2025.

Table 6: Method 2 - matrix between of potential market penetration

Market Penetration

Average USA 1.10% Average International 0.35%

52,734 Patients 16,779 Patients

Spending (NZD)

600 $ 379,684,800 $ 120,808,800

450 $ 284,763,600 $ 90,606,600

NZ Population (May 2019) 4,794,000

The analysis suggests a high value of $379 million NZD and a low value of $90 million per annum

for the New Zealand medical cannabis market. This reflects only the direct market and does not

account for indirect and induced effects.

26

4.3 Summary of the potential New Zealand Medical Cannabis Market.

In searching the available literature, two other studies of the potential New Zealand market were

found. In both cases, the reports provided little detail on how the estimates were determined. New

Frontier Data51 suggest that based on an estimated cohort of 70, 000 patients, the New Zealand

medical cannabis market could be worth up to $1.5 billion NZD by 2025. This assumes each

individual patient would spend over $22,000 NZD a year or over $1800 a month at current rates.

This assumption is unrealistic and invalidates the estimates. Our findings suggest that market

penetration is more likely to be up to approximately 53,000 patients. We also assume a more

conservative monthly patient spend of $600 a month at the high end.

The second study provided by Prohibition Partners52 forecasts the New Zealand medical cannabis

market to be worth $360 million NZD by 2028. No information is provided on how this figure

was determined; however, it is closely aligned with the high-end estimates presented in Table 6.

Two methods were presented in this section. The first method estimated total patient numbers

that could potentially qualify for medical cannabis treatments. It then considered typical mg

dosages of CBD and THC for treatments and typical costs for pharmaceutical-grade CBD and

THC. This method estimated the total potential market at being between $388 million and $2.3

billion per annum. This represents the ‘total addressable market’ for New Zealand and suggests

that medical cannabis presents a potentially significant market.

The second method sought to give an estimate of the ‘total serviceable market’. Case studies of

other jurisdictions were considered and extrapolated to the New Zealand population. This

provided a low-end estimate of $90 million and a high-end estimate if $379 million NZD.

The two methods provide different estimates of the potential market opportunity for medical

cannabis. The first method describes the entire market while the second estimates the likely

serviceable market up until 2025. The medical cannabis scheme has not been finalised and there is

uncertainty around how doctors will behave under the new scheme. This contributes to a degree

of uncertainty in estimating the New Zealand medical cannabis market size. If the USA or

Canadian markets were to be considered a potential proxy for the future New Zealand market, as

government policy indications suggest, we would expect the New Zealand market to align more

closely to the high-end forecasts for the total serviceable market. That is, an annual market of $380

million by 2025. Additionally, as the $2.3 billion estimate of the total addressable market suggests,

there is room for the market to expand to grow over time.

27

4.4 International Medical Cannabis Market.

The exact size of the international medical cannabis market differs vastly depending on sources.

Additionally, it can be difficult to accurately separate medical from recreational markets, for

example:

• “The global medical cannabis market size was estimated to reach a value

of US$ 13.4 Billion in 2018. The market is further expected to reach a

value of US$ 44.4 Billion by 202453.”

• Medical Marijuana Market size is set to exceed USD 55.0 billion by

202454.”

• “The global legal marijuana market is expected to reach USD 146.4

billion by the end of 202555.”

• “The global cannabis market is thought to be worth USD$150 billion

today. Barclays, in their European Consumer Staples Report in

September 2018, suggests that this figure could increase to USD$272

billion by 202856.”

As the sources quoted above, there is large variation in the estimates on the current and future size

of the global medical cannabis markets. The more reputable sources which focus solely on medical

cannabis suggest that the global medical cannabis market will be worth around $55 billion USD

within the next five years.

There are little reputable data available on the scale of the international market for medical

cannabis. This can partly be explained by strict import and export restrictions on global trade.

Under a 1961 international treaty (Single Convention on Narcotic Drugs), cannabis is classified as

a controlled substance with no medicinal use or value. Most countries are signatories to this and

other international treaties that set forth the ground rules for the international drug control regime

for controlled substances. However, countries that have legalised cannabis can agree to allow trade

in cannabis between those countries. The trade in medical cannabis is gradually increasing57

between countries and will continue to increase as more countries liberalise their medical cannabis

laws. There is also a growing trade in licensing agreements and science swapping across borders

which is likely to present a significant opportunity for New Zealand firms.

28

4.5 Research, Development, and Value Add

There is already demand for New Zealand cannabis products. New sources announced a $160

million offer from Seattle-based Rhizo Sciences to a New Zealand company to produce 12,000kg

of pharmaceutical grade cannabis products over four years. While this deal did not proceed, it is a

signal of a high-value interest in New Zealand cannabis products. There are significant

opportunities for New Zealand enterprises to become involved with high-value research relating

to medical cannabis. The development and licensing of new products present a pathway for

exporting intellectual capital to other medical cannabis markets, without the same trade restrictions

found when shipping physical products.

Callaghan Innovation has already approved research and development co-funding grants to

investigate medicinal, nutritional and tech applications related to the cannabis industry58. This

research could extend beyond medical cannabis to include other uses such as fabrics and energy.

New Zealand based Cannasouth has successfully built relationships with the University of Waikato,

Callaghan Innovation, international experts, and a former Federated Farmers CEO. These

relationships have aided it in raising capital investment59.

New Zealand has a long-established history of leading research and development in agricultural

industries. This, along with other factors has allowed New Zealand to position its products

internationally as high-value offerings. Examples of this value-added approach can be seen clearly

in the wine sector, kiwifruit, and more recently hops. By focusing on the development of high-

quality products accompanied by New Zealand’s unique credence attributes, there is the potential

to replicate the success of other agricultural industries with medical cannabis.

29

5 Summary

This report has provided an overview of New Zealand’s potential medical cannabis market and its

wider societal impacts. Due to the limited information available on the details of the forthcoming

medical cannabis scheme, the report makes several assumptions. Each assumption is described

and high and low estimates are provided to mitigate uncertainty. We use different methods to

outline both the total addressable market and the total serviceable market. For each method, we

provide high and low estimates. The high range estimate for the total serviceable market aligns

closely to another forecast for the New Zealand medical cannabis market of $360 million NZD

by 2028. This figure conforms with our high range estimate of $379 million which was calculated

using the second method. If the American or Canadian markets were to be considered a potential

proxy for the future New Zealand market, we would expect the New Zealand market to align more

closely to these figures, given the market is allowed approximately five years to reach a level of

maturity.

In addition to the potential market forecasts, the report also considers some of the wider social

impacts that can occur through the establishment of a medical cannabis market. The introduction

of legalised medical cannabis has been shown to have positive effects on employment, crime, and

wider health issues (e.g. drug addiction and smoking). The international experience with medical

cannabis legalisation suggests there are multiple positive indirect and induced effects that arise

from the creation of a functional medical cannabis market. Assuming a New Zealand medical

cannabis scheme of similar design to North American examples, the is significant potential for

New Zealand to realise both economic and social benefits from the development of a medical

cannabis market.

30

Appendix A – Global Regulation

The following information is based on a cabinet paper from the Chair of the Cabinet Business Committee to the Minister of Health - Medicinal cannabis:

100-Day Action60

Jurisdiction Overview of requirements Supply Who can access?

Australia Medicinal cannabis is available under the Authorised Prescriber Scheme (APS) and Special Access Scheme (SAS), and can be accessed through clinical trials. Some states also require State-level approval.

APS allows a doctor, who has been approved by the Therapeutic Goods Association (TGA), to prescribe cannabis to a specified group of patients. SAS allows the import or supply of medicinal cannabis for a single patient on a case by case basis.

Sativex is not funded.

A regulatory framework for cultivation has been established. Local product is not expected to be available until next year.

An Authorised Prescriber can import medicinal cannabis, or approval to import can be sought by a medical practitioner through the SAS scheme.

An import permit from the Office of Drug Control is required to import product.

Unapproved medicinal cannabis cannot be imported by individuals.

The conditions for which cannabis is prescribed is at the discretion of the doctor.

Under SAS, patients who are terminally ill do not require TGA approval, but TGA approval is required in all other cases.

Canada Individuals with approval from their health care provider can access medicinal cannabis. A Bill to legalise recreational cannabis access will be considered in 2018.

Patients can either register with a licenced producer, who will send cannabis directly to them; or grow cannabis themselves, or designate someone else to grow it for them

A doctor must specify that a patient has a qualifying condition. These conditions may include: nausea and vomiting associated with chemotherapy; symptoms (pain, insomnia and depression) experienced by cancer and AIDS patients; pain and muscle spasms associated with multiple sclerosis; and palliative care.

31

United States (Federal)

Possession of cannabis is illegal, except when used in approved research settings.

Cannabis is considered to have no therapeutic use.

Federal law prohibits the import, export, or cultivation of cannabis. This prohibition includes moving cannabis that has been legally obtained between states.

The Food and Drug Administration (FDA) has approved synthetic cannabis products Marinol and Syndros, which are cannabinoid-based medications used to induce appetite in AIDS patients, and to treat nausea and vomiting associated with chemotherapy.10

Federal law prohibits possession and use of cannabis.

California Medicinal cannabis has been legal since Proposition 215 passed in 1996, which allowed access for patients with a doctor’s recommendation.11

Medical use will be regulated under the Medical and Adult-Use Cannabis Regulation and Safety Act, expected to be ready in 2018. This will permit and regulate for-profit cultivation, distribution, manufacturing, testing, dispensary, and transportation.12

Recreational use is permitted under Proposition 64, introduced in 2016.13

Adults over 21 can legally use, possess, and share cannabis, and grow it at home.

A patient may cultivate up to six mature plants or 12 immature plants, and have up to eight ounces of dried cannabis.14

For recreational use, people are allowed up to one ounce of dry cannabis, eight grams of concentrated cannabis, or six live plants.

Patients are required to have written documentation by physician of diagnosis of serious medical condition and that medicinal cannabis is appropriate.15

Serious medical condition includes: AIDS, anorexia, arthritis, cachexia, cancer, chronic pain, glaucoma, migraine, persistent muscle spasms (e.g. multiple sclerosis), seizures (e.g. epilepsy), and severe nausea.16

Colorado Medicinal cannabis use has been legal in Colorado since Amendment 20 was passed in 2000, which allowed use for approved patients with written medical consent.17

Patients can possess up to two ounces of medical cannabis, and may cultivate no more than six cannabis plants. 18

Physicians are not able to prescribe due to federal legislation, but may provide a written recommendation that the patient has a debilitating condition and might benefit from the use of medical marijuana.

Recommendations may be written for these conditions: cancer; glaucoma; HIV or AIDS; and post-traumatic stress disorder; or any of these symptoms: cachexia; persistent muscle spasms; seizures; severe nausea; and

32

severe pain.

Netherlands The Netherlands allows access to Bedrocan products from a doctor. The Netherlands have set up a centralised Office of Medicinal Cannabis which takes possession of all of the cannabis produced in line with the U.N. Conventions.19

Bedrocan, a medicinal cannabis company based in the Netherlands, is the sole supplier of medicinal cannabis. Bedrocan granulated plant products are made to a good manufacturing practice (GMP) standard, and are administered by an inhaler.

The cannabis is supplied to the Office of Medicinal Cannabis who then supplies it to pharmacies.20

Prescriptions are then dispensed by pharmacies, similar to any other medicine.

The Office of Medicinal Cannabis lists conditions (such as pain and muscle spasms or cramps, chronic neuropathic pain, and nausea) for which cannabis is recommended, but a doctor may prescribe cannabis at their own discretion.21

Israel Israel has a government agency for cannabis, the Israel Medicinal Cannabis Agency (IMCA), within the Ministry of Health.22

Israel has a medicalisation model, under which the IMCA has developed quality assurance standards for all components of the supply chain (cultivation, manufacture, distribution, and security). They have also developed clinical guidelines known as the “Green Book”.

Israel are moving to bring cannabis as close to a medicine as possible. Cultivation and sale from traditional cultivators is to cease. Standardised product is to be dispensed by pharmacies. Aiming to have a medical grade cannabis by the end of this year.

Israel has a list of conditions for which medicinal cannabis can be prescribed in the following fields of medicine –oncology, gastroenterology, pain, infectious diseases, neurology, palliative care and psychiatry. A licence to use is issued after standard treatments have been exhausted for listed indications with these fields.

Germany Medical use is permitted under legislation which came into effect March 2017. This mandates that German’s public health insurance system covers the cost of cannabis medicines prescribed by doctors.23

Germany will create a state-regulated program in 2019 to cultivate cannabis for medicinal use. A cannabis agency will be created within the Federal Opium Agency to oversee cultivation. The agency will contract farms to grow cannabis, oversee each stage to ensure product produced is pharmaceutical grade.24

Doctors can prescribe cannabis based medicines to treat pain, nausea from chemotherapy, and other chronic ailments. Cannabis can only be prescribed as a last resort if patients cannot be treated in any other way, and only in very limited cases.

33

Individuals are not prosecuted for possession of up to five grams for recreational use, with regional variability.

Germany have set up an agency to supply medicinal cannabis (in line with the UN Conventions). They have completed a tender procurement process and have a number of suppliers including Bedrocan and Tilray.

Cannabis will be able to be prescribed by a GP in Germany and is not restricted to specified conditions.

Pharmacists will dispense cannabis, either as cannabis extract in capsules, or liquid form, or as dried flower buds.

Until the cultivation programme is up and running, cannabis will be imported. Grow your own is not allowed.

Ireland Ireland’s controlled drug system is similar to New Zealand. Cannabis, and any products extracted that are psychoactive, are controlled under the Misuse of Drugs legislation. Medicinal use is currently only permitted with Minister approval.25

Sativex is consented, but not funded. CBD products are legal. A Bill to legalise medicinal cannabis has been rejected by the Health Committee in July 2017, because the Bill proposed to decriminalise cannabis not just for medical purposes.26

Ireland are currently looking to see where they can get supply from and are deciding if they will reimburse for medicinal cannabis. Their intention is to no longer require Ministerial approval for specialists to prescribe medicinal cannabis.

Ireland has developed and published quality standards

A licence issued by the Minister is currently required to import cannabis. 27

Ireland have set up an agency to supply medicinal cannabis (in line with the UN Conventions).

Currently, the Minister of Health must grant a licence under the Misuse of Drugs Act where a proposed course of cannabis has been endorsed by a consultant.

Medicinal cannabis can only be prescribed for certain indications and must be prescribed by a specialist.

Ireland are looking to set up an access programme28, which is likely to be for patients (who do not respond to conventional treatments) with:

• Severe, refractory epilepsy.

• Spasticity associated with multiple sclerosis. Intractable nausea and vomiting associated with chemotherapy

34

Appendix B – Scientific Studies of Medical

Cannabis Dosage Requirements

American Herbal Pharmacopoeia, 2014, Cannabis in the Management and Treatment of Seizures and Epilepsy: A

Scientific Review, media release, 12 March<http://sydney.edu.au/business/__data/assets/pdf_file/0007/91681/BSRG_10ed.pdf>

Australian Institute of Health and Welfare, 2014, Non-admitted patient care 2013–14 Australian hospital statistics, HSE 159, Australian Institute of Health and Welfare, Canberra: 25.

Australian Institute of Health and Welfare, 2013, Australian hospital statistics 2012-2013, HSE 145, Australian Institute of Health and Welfare, Canberra: 309.

Cesamet (nabilone) Capsules For Oral Administration, 2013, Meda Pharmaceuticals, New Jersey. HIV statistics in Australia: Data snap shot, 2014, Australian Federation of AIDS Organisations (AFAO), viewed on

18 January 2016 https://www.afao.org.au/about-hiv/the-hiv-epidemic/hiv-statistics-australia#.VqBygY9OL3a

Kansagara D, O'Neil M, Nugent S, et al. 2017, Benefits and Harms of Cannabis in Chronic Pain or Post-traumatic Stress Disorder: A Systematic Review [Internet]. Washington (DC): Department of Veterans Affairs (US); 2017 Aug. RESULTS. Available from: https://www.ncbi.nlm.nih.gov/books/NBK476452/

Krashin, D. L., Merrill, J. O. and Trescot, A. M. 2012, ‘Opioids in the Management of HIV-Related Pain’, Pain Physician, Opioid Special Issue July, pp. ES157-ES168: ES164.

Marinol (Dranabinol) Capsules, 2004, Unimed Pharmaceuticals, Marietta, Georgia. Anderson, P. 2013, ‘Oral THC May Have the Edge Over Smoked Marijuana for Pain’, MedScape, viewed on 4

February 2016 <http://www.medscape.com/viewarticle/803576#vp_2> MacCallum, Caroline & Russo, Ethan. (2018). Practical considerations in medical cannabis administration and

dosing. European Journal of Internal Medicine. 49. 10.1016/j.ejim.2018.01.004. McNamara, Damian, 2018, What Is the CBD Dosing Required for Effective Pain Relief? Medscape Education Clinical

Briefs Merlin, J. S. 2015, ‘Chronic Pain in Patients With HIV Infection: What Clinicians Need to Know’, Topics in

Antiviral Medicine, vol. 23, no. 3, pp. 120-124: 120. Minnesota Department of Health, 2018, A Review of Medical Cannabis Studies relating to Chemical Compositions

and Dosages for Qualifying Medical Conditions MS Australia, 2016, Pain and multiple sclerosis, MS Australia, viewed on 4 February 2016

<http://www.ms.org.au/attachments/documents/ms_practice/pain.aspx> Pain Australia, 2010, National Pain Strategy, Pain Management for all Australians, Pain Australia, Sydney, viewed on

4 February 2016 <http://www.painaustralia.org.au/images/pain_australia/NPS/National%20Pain%20Strategy%202011.pdf>

Profiles of Disability: Multiple Sclerosis, 2012, Australian Bureau of Statistics, viewed on 19 January 2016 <http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/4429.0Main+Features100182009>.

Rizzo, M. A. Hadjmichael, O. C. Preiningerova, J. and Vollmer, T.L. 2004, ‘Prevalence and treatment of spasticity reported by multiple sclerosis patients’, Multiple Sclerosis, vol. 10, no. 5, pp. 589-595: 590.

Russo EB. Cannabis Therapeutics and the Future of Neurology. Front Integr Neurosci. 2018;12:51. Published 2018 Oct 18. doi:10.3389/fnint.2018.00051

Russo EB. Cannabinoids in the management of difficult to treat pain. Ther Clin Risk Manag. 2008;4(1):245–259. Sastre-Garriga, J. Vila, C. Clissold, S. and Montalban, X. 2001, ‘THC and CBD oromucosal spray (Sativex.sup.[R]) in

the management of spasticity associated with multiple sclerosis’, Expert Review of Neurotherapeutics, vol. 11, no. 5, pp. 627-637: 627.

Tomida, Ileana, et al. "Effect of sublingual application of cannabinoids on intraocular pressure: a pilot study." Journal of glaucoma 15.5 (2006): 349-353.

https://www.arthritis.org/living-with-arthritis/treatments/natural/supplements-herbs/cannabidiol-oil.php van den Beuken-van Everdingen, M.H.J, de Rijke, J.M, Kessels, A.G., Schouten, H.C., van Kleef, M. and Patijn, J.

2007, ‘Prevalence of pain in patients with cancer: a systematic review of the past 40 years’, Annals of Oncology, vol. 18, no. 9, pp. 1437-1449: 1437

Wasting Syndrome, 2015, AIDS MEDS, viewed on 4 February 2016 <http://www.aidsmeds.com/articles/Wasting_6934.shtml>

Wiese B, Wilson-Poe AR. Emerging Evidence for Cannabis' Role in Opioid Use Disorder. Cannabis Cannabinoid Res. 2018;3(1):179–189. Published 2018 Sep 1. doi:10.1089/can.2018.0022

35

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11 Previous restrictions limit non-ministerial approval to a single product, Sativex, for a single condition, spasticity related to MS. 12 https://www.drugfoundation.org.nz/policy-and-advocacy/medicinal-cannabis/ 13 https://www.beehive.govt.nz/release/medicinal-cannabis-legislation-help-ease-suffering

14 https://www.newshub.co.nz/home/politics/2018/11/medicinal-cannabis-government-s-new-proposal-for-faster-easier-access.html 15 https://www.health.govt.nz/our-work/regulation-health-and-disability-system/medicines-control/medicinal-cannabis/licences-medicinal-cannabis-growers-suppliers-and-producers 16 In CBD products, the amount of tetrahydrocannabinols and psychoactive related substances must not exceed 2 percent of the total CBD tetrahydrocannabinol and psychoactive related substances content in the product. 17 https://www.health.govt.nz/our-work/regulation-health-and-disability-system/medicines-control/medicinal-cannabis/growing-and-producing-medicinal-cannabis-products 18 Agriculture Victoria, Department of Economic Development, Jobs, Transport and Resources (2018). Industry Development Plan: Developing a Medicinal Cannabis Industry in Victoria 2018–2021

19 Darnell, A. J., and K. Bitney. "I-502 evaluation and benefit-cost analysis: Second required report." Washington State Institute for Public Policy, September. Available at http://www. wsipp. wa. gov/ReportFile/1670/Wsipp_I-502-Evaluation-and-Benefit-Cost-Analysis-Second-Required-Report_Report. pdf (2017). 20 Caulkins, J.P., Kilmer, B., & Kleiman, M.A.R. (2012). Marijuana Legalization: What Everyone Needs to Know. New York:Oxford University Press.

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21 Anderson, D.M., Hansen, B., & Rees, D.I. (2012). Medical marijuana laws, traffic fatalities, and alcohol consumption. The Journal of Law and Economics, 56(2), 333–369. 22 Bachhuber, M.A., Saloner, B., Cunningham, C.O., & Barry, C.L. (2014). Medical Cannabis Laws and Opioid Analgesic Overdose Mortality in the United States, 1999-2010. JAMA Internal Medicine, 174(10), 1668. 23 Philippe Lucas, Amanda Reiman, Mitch Earleywine, Stephanie K. McGowan, Megan Oleson, Michael P. Coward & Brian Thomas (2013) Cannabis as a substitute for alcohol and other drugs: A dispensary-based survey of substitution effect in Canadian medical cannabis patients, Addiction Research & Theory, 21:5, 435-442, DOI: 10.3109/16066359.2012.733465 24 Gavrilova, E. , Kamada, T. and Zoutman, F. (2017), Is Legal Pot Crippling Mexican Drug Trafficking Organisations? The Effect of Medical Marijuana Laws on US Crime. Econ J. doi:10.1111/ecoj.12521 25 Chu, Y.-W.L. and W. Townsend, Joint culpability: The effects of medical marijuana laws on crime. Journal of Economic Behavior & Organization, 2019. 159: p. 502-525. 26 Chu, Y.-W.L. and W. Townsend, Joint culpability: The effects of medical marijuana laws on crime. Journal of Economic Behavior & Organization, 2019. 159: p. 502-525. 27 Ministry of Justice, 2016. Response to an Official Information Request by the NZ Drug Foundation. Sep 2017 28 Victoria State Government (date unknown) Facilitate Labour Force Requirements: Scoping paper: Labour needs for Victoria’s emerging medicinal cannabis industry 29 Hoagland, C, Barnes, B., & Darnell, A. (2017). Employment and wage earnings in licensed marijuana businesses (Document Number 17-06-4101). Olympia: Washington State Institute for Public Policy. 30 https://www.cnbc.com/2019/03/14/the-marijuana-industry-looks-like-the-fastest-growing-job-market-in-the-country.html 31 http://ghdx.healthdata.org/gbd-2017 32 Dominick, Clare, Fiona Blyth, and Michael Nicholas. "Patterns of chronic pain in the New Zealand population." NZ Med J124.1337 (2011): 63-76. 33 Ministry of Health. Annual Update of Key Results 2015/16: New Zealand Health Survey. 2016: Wellington. 34 https://www.ncbi.nlm.nih.gov/pubmed/21946879 35 https://www.arthritis.org.nz/wp-content/uploads/2018/09/120230-Pfizer-Chronic-Pain-Report-08-WEB.pdf 36 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2018.05266 37 https://www.cdc.gov/mmwr/volumes/67/wr/mm6736a2.htm 38 https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11729713 39 FreshLeaf Analytics Australian Medicinal Cannabis Market Patient, Product and Pricing Analysis. Q1 2019. 40 http://ghdx.healthdata.org/gbd-2017 41 FreshLeaf Analytics Australian Medicinal Cannabis Market Patient, Product and Pricing Analysis. Q1 2019. 42 https://www.timesofisrael.com/israeli-regulation-sputters-as-canada-gives-green-light-to-cannabis/ 43 Cooper, D. and Xu, S. (2019). 4Front/Cannex Capital Holdings Inc. (CNNX-C) Please Give a Warm Welcome to the Newest MSO. Beacon Securities Limited. Toronto. 44 https://bedrocan.com/dutch-patients-daily-cannabis-dose-remains-stable/ 45https://www.abc.net.au/news/health/2019-02-20/medical-marijuana-whats-the-evidence-for-treating-illness/10823036 46 FreshLeaf Analytics Australian Medicinal Cannabis Market Patient, Product and Pricing Analysis. Q1 2019 47 Cooper, D. and Xu, S. (2019). 4Front/Cannex Capital Holdings Inc. (CNNX-C) Please Give a Warm Welcome to the Newest MSO. Beacon Securities Limited. Toronto.

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48 https://www.statesmanjournal.com/story/news/2017/04/26/medical-marijuana-patients-spending-recreational-more/100910110/ 49 https://www.masslive.com/news/2018/06/massachusetts_marijuana_study.html 50 https://outline.com/uqHDZ9 51 New Frontier Data. (2018) The Oceania Cannabis Report: 2018 Industry outlook. https://newfrontierdata.com/ 52 Prohibition Partners. (2018) The Oceania Cannabis Report: November 2018. https://prohibitionpartners.squarespace.com/the-oceania-cannabis-report 53 https://www.giiresearch.com/report/imarc731857-medical-cannabis-market-global-industry-trends.html

54 https://www.marketwatch.com/press-release/medical-marijuana-market-is-projected-to-exceed-55-billion-at-360-cagr-by-2024-2019-02-21

55 https://www.grandviewresearch.com/press-release/global-legal-marijuana-market

56 https://thegreenfund.com/the-global-cannabis-industry-a-world-view

57 https://www.leafly.com/news/industry/legal-international-cannabis-trade-already-exists-mapped 58 https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12198648 59 https://cmpartners.co.nz/cannasouth-secures-new-licenses-to-import-cultivate-and-research-medicinal-cannabis/ 60https://www.health.govt.nz/system/files/documents/pages/chair_cabinet_business_committee_medicinal_cannabis_100_day_action.pdf