In May 2020, the State of Israel became the latest in a growing number of countries to enable exports of medical cannabis and related products under specified conditions.
The international cannabis trade is strictly regulated under United Nations (UN) conventions. The UN Single Convention on Narcotic Drugs of 1961, as amended, classifies cannabis and cannabis resin as a Schedule I and IV drug and allows cannabis export for medical and scientific purposes only. The convention requires Parties to control participation in the cannabis trade using a license or other authorization and to issue authorizations for individual exports. The UN 1971 Convention on Psychotropic Substances lists certain tetrahydrocannabinol (THC) isomers and stereochemical variants in Schedule I and delta-9-THC, the main psychoactive compound in cannabis, and its stereochemical variants in Schedule II. The convention allows the export of these substances for medical and scientific use only and requires strict controls on exports.
Despite these restrictions, the global medical cannabis market has grown significantly in recent years. The global legal cannabis market was valued at US$10.2 billion in 2018 and rose to US$14.9 billion in 2019. The expansion of the market has coincided with the increasing legalization of cannabis cultivation, production, and use in many countries for medical and research purposes.
In recent years, a number of countries, including Israel, Denmark, Australia, and Canada, have modified their laws and regulations to allow exports of medical cannabis and related products under certain conditions.
Israel
The Israeli government authorized medical cannabis exports after a lengthy period of interagency deliberation.
In June 2016, the Israeli government adopted Government Resolution 1587 of 26.06.2016 on Cannabis Use for Medical and Research Purposes. The resolution stated that any licenses for activities involving cannabis, including cultivation, production, distribution, and transportation, were to be issued by the Ministry of Health (MOH) in accordance with the Dangerous Drugs Ordinance, 1973. The resolution also tasked an interministerial committee consisting of the Ministries of Health, Finance, and other bodies with examining the feasibility of exporting medical cannabis from Israel.
The Israeli parliament took an important step in the legalization of cannabis export in December 2018 with the adoption of Amendment 16 to the Dangerous Drugs Ordinance, 1973. The amendment established a regulatory, compliance oversight, and enforcement process for activities, including cultivation and export, involving cannabis for medical and research purposes. The amendment went into force on May 1, 2019.
In January 2019, the interministerial team published its recommendations concerning legalizing the export of cannabis for medical purposes. The Israeli government resolved to implement the team’s conclusions in Government Resolution No. 4490 of 27.01.2019 on Adopting the Team’s Recommendations for Examining the Feasibility of Export of Medical Cannabis. The resolution called for allowing Israeli persons holding an occupational license under the Dangerous Drugs Ordinance, 1973 to apply to MOH for a license to export medical cannabis products. It would be necessary for the products to meet the standards set by MOH, the activity would have to occur under the supervision of state authorities, and exports of reproducible plant material (such as plants, seeds, cuttings, tissue cultures, and plant parts) would not be approved.
The Ministry of Economy ultimately authorized the export of medical cannabis products on May 13, 2020, with the publication of Free Export Order (Amendment No. 2), 5764-2020. Products approved for export include cannabis inflorescences, resin, tinctures, syrups, oils, extracts, packaged kits, tablets, rolled cigarettes, and cartridges for inhalers. Exports must occur under a license from the MOH Medical Cannabis Unit in accordance with the Dangerous Drugs Ordinance, 1973. The order went into force on June 12, 2020 (30 days after publication).
Denmark
The Danish government took an incremental approach to the legalization of exports of medicinal cannabis and related products between 2017 and 2019.
In December 2017, the Danish government adopted Act No. 1668 of 26/12/2017 on a Medicinal Cannabis Pilot Programme (entered into force on January 1, 2018, and amended in December 2018). This created a four-year pilot program for the purpose of providing patients with legal access to medicinal cannabis in cases in which authorized medicines are not effective. The law allows the Danish Ministry of Health to establish rules providing for the cultivation and manufacture of cannabis, the importation and manufacture of cannabis primary products, the production of cannabis intermediate products, and the export of bulk cannabis and cannabis primary and intermediate products produced from Danish-grown cannabis.
The act defines cannabis-related terms in the following ways:
- Cannabis primary product: A cannabis product covered by the pilot program, which is imported to or manufactured in Denmark in accordance with rules laid down in the act with a view to producing a cannabis end product; a cannabis primary product may consist of cannabis drugs and drug preparations as well as further dosage-like formulations thereof;
- Cannabis intermediate product: A cannabis product covered by the pilot program, which is manufactured from a cannabis primary product for the purpose of producing a cannabis end product; and
- Cannabis end product: A cannabis product covered by the pilot program, which is manufactured in a pharmacy or a hospital pharmacy based on a cannabis intermediate product after a doctor’s prescription for a specific patient.
Act No. 1668 of 26/12/2017 on a Medicinal Cannabis Pilot Programme enables companies with a license to handle narcotics to apply to the Danish Medicines Agency for a permit to import or manufacture a cannabis primary product and to manufacture or distribute a cannabis intermediate product.
The Ministry of Health subsequently issued Executive Order No. 943 of 28/06/2018 on the Cultivation, Manufacture and Distribution of Bulk Cannabis and the Manufacture of Cannabis Primary Products. The order allowed companies that hold a license for the manufacture of cannabis primary and intermediate products to export cannabis primary products under specified conditions. Companies could export primary products only to countries that allowed the importation of cannabis for medical use. Intermediate products manufacturers had to ensure that the cannabis primary products were exported and delivered only to companies that had the necessary permits to handle cannabis for medical use and ensure that the cannabis primary products could be traced. The order entered into force on July 1, 2018.
Executive Order No. 1785 of 21/12/2018 replaced Executive Order No. 943 of 28/06/2018 in December 2018. The new order enabled companies holding a license to cultivate cannabis and produce bulk cannabis to export bulk cannabis. Bulk cannabis is any processed cannabis product not considered a cannabis primary or intermediate product which is manufactured by a company or person under a license from the Danish Medicines Agency and which is packaged, released, and distributed for further processing or packaging in consumer-ready pack sizes for the manufacture of a cannabis primary product. As with cannabis primary products, bulk cannabis could be exported only to countries that allowed the importation of cannabis for medical use. Intermediate products manufacturers had to ensure that bulk cannabis was exported and delivered only to companies that had the necessary permits to handle cannabis for medical use. It was also necessary for the bulk manufacturer to ensure that exported bulk cannabis could be traced. This order entered into force on January 1, 2019.
Executive Order No. 695 of 03/07/2019 later replaced Executive Order No. 1785 of 21/12/2018, but the export procedure for bulk cannabis and cannabis primary products remains the same as of August 2020.
Australia
The Australian government legalized the domestic production of cannabis for medical and scientific purposes in 2016 and the export of medicinal cannabis products two years later.
In February 2016, the Australian government amended the Narcotic Drugs Act 1967 with the Narcotic Drugs Amendment Act 2016. Schedule 1 of the amendment act provided for the creation of a regulatory scheme for the cultivation of cannabis plants, the production of cannabis and cannabis resin for medicinal purposes or for research relating to medicinal cannabis, and the manufacture of drugs that are medicinal cannabis products. Schedule 1 went into force in October 2016.
The amended act enables persons to apply to the Department of Health (DOH) for licenses to engage in specified activities involving cannabis. Under the act, persons may apply for three different licenses related to cannabis:
- A medicinal cannabis license, which allows: 1) the cultivation of cannabis plants for producing cannabis or cannabis resin for medicinal purposes and the obtaining of cannabis plants for that purpose, and/or 2) the production of cannabis or cannabis resin for medicinal purposes, as well as 3) activities related to such cultivation, obtaining, or production;
- A cannabis research license, which authorizes 1) the cultivation of cannabis plants for producing cannabis or cannabis resin for research relating to medicinal cannabis and the obtaining of cannabis plants for that purpose, and/or 2) the production of cannabis or cannabis resin for research relating to medicinal cannabis, and 3) activities related to such cultivation, obtaining, or production; and
- A manufacture license, which authorizes one or more of the following activities: 1) the manufacture of a drug in accordance with one or more manufacture permits; 2) activities relating to such manufacture, including but not limited to supply of the drug, packaging, transport, storage, possession, and control of the drug; and 3) disposal or destruction of the drug.
License holders must apply for permits to perform specific activities authorized under a license. In order to cultivate specific cannabis plants, produce cannabis or cannabis resin in certain quantities, or manufacture drugs of particular types or quantities, a license holder must obtain a permit.
The Australian government legalized the export of certain cannabis-related items for medicinal purposes in the Narcotic Drugs Amendment (Cannabis) Regulations 2018. The regulations amended the Narcotic Drugs Regulation 2016 (the principal implementing rules for the Narcotic Drugs Act 1967) and entered into force in February 2018. The amended regulations enable DOH to issue a manufacture license in cases in which a medicinal cannabis product will be supplied “by way of export from Australia in accordance with a license and permit under the Customs (Prohibited Exports) Regulations 1958.”
The amended regulations allow for the export of:
- Medicinal cannabis products manufactured in Australia under a Good Manufacturing Practices (GMP) Licence;
- Medicinal cannabis products listed as export-only or registered in the Australian Register of Therapeutic Goods (ARTG); and
- Extracts of cannabis or cannabis resin manufactured under a Narcotic Drugs Act 1967 license that are not in the final dosage form.
The amended regulations do not provide for the export of plant materials such as cannabis flowers or leaves or cannabis resin.
The DOH Office of Drug Control (ODC) issued “Export of Medicinal Cannabis: Guidance for Cultivators and Manufacturers of Medicinal Cannabis” in April 2018. The guidance stated that persons seeking to export medicinal cannabis products must meet the following requirements:
- Comply with the Narcotic Drugs Act 1967, which includes holding the appropriate license for cannabis cultivation, production, or drug manufacture;
- Obtain an export license and permit from ODC;
- Export the products only to countries that authorize the import and comply with the UN Single Convention on Narcotic Drugs of 1961; and
- Ensure that the products are listed or registered on the Australian Register of Therapeutic Goods (ARTG).
Australian exporters subsequently found that they were unable to export medicinal cannabis products to importing countries that required a phytosanitary certificate issued by the government of the exporting state. This was because Australian legislation excluded “narcotic goods” from the goods for which the government could issue a phytosanitary certificate.
In order to remedy this and to facilitate exports of medicinal cannabis products, the Australian government adopted the Export Control Legislation Amendment (Certification of Narcotic Exports) Act 2020 in June 2020. The act amended the definitions of “goods” in the Export Control Act 1982 and the Export Control Act 2020 to remove exclusionary language. These changes will empower the Australian Department of Agriculture to issue phytosanitary certificates to medicinal cannabis exporters under the Export Control (Plants & Plant Products) Order 2011.
Canada
The Canadian government has allowed the export of cannabis for medical purposes since 2014, but in 2018 it revised the legal regime governing cannabis exports.
Exports of marijuana from Canada became legal with the entry into force of most provisions of the Marihuana for Medical Purposes Regulations SOR/2013-119 (MMPR) in 2014. The regulations were issued pursuant to the Controlled Drugs and Substances Act S.C. 1996, c.19. The MMPR enabled persons holding a marijuana production license to possess marijuana for the purpose of export and to export it in accordance with an export permit from Health Canada. A licensed producer could not export dried marijuana unless the good production practices outlined in the MMPR were met. Furthermore, the regulations required export permit applicants to submit a statement that, to the best of their knowledge, the shipment did not contravene the laws of the final destination country or any transit/transshipment country as well as a copy of the import permit issued by the competent authority in the final destination country.
The Access to Cannabis for Medical Purposes Regulations SOR/2016-230 (ACMPR) replaced the MMPR in August 2016. The ACMPR generally provided the same rules for marijuana exports as the MMPR, except for some notable differences. The ACMPR specified that licensed producers could not export “fresh or dried marihuana, cannabis oil or marihuana plants or seeds” without meeting the good production practices identified in the regulations. The ACMPR also stated that persons could apply for permits to export “cannabis, other than marihuana or cannabis oil, that was obtained or produced for the purpose of conducting in vitro testing that is necessary to determine the cannabinoid content of marihuana or cannabis oil.”
The Canadian government created a new cannabis legal regime in 2018. The Cannabis Act S.C. 2018, c.16, which received royal assent on June 21, 2018, and entered into force on October 17 of that year, implemented a “comprehensive public health approach” to the control of cannabis production, distribution, sale, and possession in Canada. Its purpose includes “provid[ing] for the licit production of cannabis to reduce illicit activities in relation to cannabis; …reduc[ing] the burden on the criminal justice system in relation to cannabis; …[and] provid[ing] access to a quality-controlled supply of cannabis.”
The act defines “cannabis” as “a cannabis plant and anything referred to in Schedule 1 but… not… anything referred to in Schedule 2.”
Schedule 1 contains the following: 1) any part of a cannabis plant, including the phytocannabinoids produced by, or found in, such a plant, regardless of whether that part has been processed or not, other than a part of the plant referred to in Schedule 2; 2) any substance or mixture of substances that contains or has on it any part of such a plant; and 3) any substance that is identical to any phytocannabinoid produced by, or found in, such a plant, regardless of how the substance was obtained.
Schedule 2 contains: 1) a non-viable seed of a cannabis plant; 2) a mature stalk, without any leaf, flower, seed, or branch, of such a plant; 3) fiber derived from a stalk referred to in item 2; and 4) the root or any part of the root of such a plant.
The Cannabis Act empowers the Minister of Health to issue, renew, or amend licenses and permits that authorize the importation, exportation, production, testing, packaging, labelling, sending, delivery, transportation, sale, possession, or disposal of cannabis or any class of cannabis for medical or scientific purposes or industrial hemp.
The act further allows for the issuance of regulations dealing with the export of cannabis, any class of cannabis, and any substance that may be used in the production of cannabis.
On June 27, 2018, the Canadian government issued the Cannabis Regulations SOR/2018-144. The regulations came into force on October 17, 2018, with certain sections coming into force on December 27, 2018, and others on January 15, 2019. The ACMPR were repealed in October 2018.
The Cannabis Regulations establish several classes of licenses, including licenses for cultivation, processing, and sale. A license holder cannot export cannabis unless it meets certain conditions specified in the regulations, which include meeting quality, packaging, labeling, pest control, sanitary, and THC testing requirements. Additionally, a license holder must obtain an export permit from Health Canada for each shipment of cannabis that it seeks to export. An export permit holder is authorized to possess, transfer, transport, send, deliver, or sell the shipment of cannabis to the extent necessary to export it. Exports can only occur for scientific or medical purposes. Health Canada can refuse to issue an export permit if the applicant does not hold a license, or there are “reasonable grounds to believe” that the shipment would contravene the Cannabis Regulations or the laws of the importing or any transit/transshipment country, or in cases in which the shipment would not comply with the import permit issued by the importing country.
Health Canada maintains a general policy of issuing export permits for cannabis “only in limited circumstances,” such as:
- Exporting cannabis products to another country that has a legal regime for access to cannabis for medical purposes; or
- Exporting small quantities of cannabis for scientific purposes (e.g., research or testing).
Conclusion
These countries are part of a growing trend internationally in the legalization of medical cannabis exports. Other countries also have legalized the export of cannabis and related products for medical purposes, including Colombia, Lesotho, the Netherlands, the United Kingdom, and Uruguay.
As the international cannabis market grows and demand for cannabis for medical and research purposes increases, more governments likely will follow Israel’s path in amending their laws and regulations to authorize exports of cannabis and related products. SECURUS will continue to track these developments and other changes in international trade regulations.
By SECURUS Research Assistant Kevin Oney and Managing Director Richard Glen Young, Richard.Young@SECURUSTrade.com.