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CBD will go on sale in Australia, but first manufacturers will have to prove it works

While CBD has been approved for over-the-counter sale, there are regulatory hurdles to clear before it actually appears in pharmacies

CBD, a compound found in cannabis that does not have psychoactive effects, is now legal to sell over the counter. But don’t expect to find any in your local pharmacy yet. Photograph: Anatoliy Sizov/Getty Images/iStockphoto

CBD, a compound found in cannabis that does not have psychoactive effects, is now legal to sell over the counter. But don’t expect to find any in your local pharmacy yet. Photograph: Anatoliy Sizov/Getty Images/iStockphoto

Last modified on Sat 6 Feb 2021 19.02 GMT

“Y ou can have as much whiskey as you like, but there’s no whiskey available,” says Prof Iain McGregor, psychopharmacologist and academic director of the Lambert Initiative for Cannabinoid Therapeutics, when asked to describe the rules around CBD in Australia at the moment.

CBD is a compound found in the cannabis plant, but unlike THC, it does not have psychoactive effects. On 1 February, it became legal to purchase products containing low-dose cannabidiol (CBD) over the counter, after the Therapeutic Goods Administration down-scheduled the substance from a Schedule 4 (prescription medicine) to a Schedule 3 (pharmacist-only medicine). On 15 December, the TGA announced the decision after a safety review that indicated “known adverse events of CBD at low doses were not serious”.

But those afflicted with pain, anxiety or simple curiosity looking to buy CBD would have received a disappointing response from their pharmacists this week. While the substance itself is hypothetically legal, no product containing it has been approved by the Australian Register of Therapeutic Goods (ARTG) – a requirement of sale.

CBD’s medicinal status in Australia is much different from the situation in other countries where the substance is available without a prescription, such as the UK and US. In the UK, low-dose CBD oil can be sold as a dietary supplement, but not a medicine. In the US, the substance is not approved on a federal level, but in some states it is possible to buy everything from pet food to bottled water to Martha Stewart branded gummies containing CBD. “You have this runaway train that’s way beyond the evidence available,” says McGregor.

“Now we have approval, but in order for companies to get these products to market they have to … show that the product is safe, but also efficacious.

“And therein lies the problem – there are no good clinical trials that show CBD at 150mg [the daily dose approved by the TGA] is actually effective.”

“We don’t know if it will work,” says Assoc Prof Yvonne Bonomo, a physician in addiction medicine and chief investigator at the Australian Centre for Cannabinoid Clinical Research Excellence. “It may work for some people. It’s hard to know. That’s why we need to look at it.”

“If it’s going to be treated as a medicine, it needs to go through the processes medicines go through,” she says. “Other countries have used different pathways to make it available and they have different methods that aren’t as rigorous.”

Bonomo emphasises the importance of quality control, saying that the upfront work is worth it in the long run. “For products to be listed on the ARTG, there is a process. It’s a complex process, but it’s a necessary process to make sure that those quality products do get listed.”

The Australian Medical Association did not support the TGA’s decision to down-schedule the substance, citing the lack of ARTG-listed products – alongside the potential for interactions with prescription medicines, and a need for more evidence.

“We’re filling the gap of 70 years of prohibition where there was no research,” says Tommy Huppert, the CEO of Cannatrek, an Australian cannabis grower and manufacturer. Huppert’s company has just inked an exclusive supply deal with Chemist Warehouse, though what exactly it will supply remains to be seen. “Everyone’s really racing to get the product to market. What sort of mountain will we have to climb? Is it going to be weeks? Months?” he wonders.

Though ARTG registration is a high hurdle, there are huge potential earnings on the table. The director of Southern Cannabis Holdings, Tim Drury, believes the over-the-counter market for CBD oil will “exceed $200m per annum”.

That CBD is found in a plant subject to three seperate United Nations treaties is not the only thing that sets it apart from other medicines. It also differs because “we’re really talking about generic actives,” says Huppert. Rather than developing a new drug for a specific purpose, CBD manufacturers will have to run clinical trials to find out which purposes an existing and widely used substance is actually effective for. Or, as McGregor puts it, “the exact opposite of most drug development”.

There are plenty of wild health claims about CBD oil’s properties (which have resulted in TGA fines in the past). There is also lots of anecdotal evidence that CBD helps with everything from insomnia, to chronic pain, to anxiety, to epilepsy. Clinical trial data backs up some of these assertions – but only at much higher dosages than the TGA has approved.

“Now the challenge is the process of proving [the anecdotal evidence] … to list the medicine with an objective claim,” says Huppert. “It usually takes years and millions of dollars to bring a drug to market.”

And when it does arrive, it could well be a price point that will shut a lot of people out. In the UK, a bottle containing a 300mg dose of CBD oil – enough for two days’ use at the TGA-approved level – costs about A$40.

“You’re not talking about the prices of vitamins, or turmeric … you’re talking about a commodity that is quite sought after,” says McGregor. “That is the story that we hear over and over again [from patients], that they can’t afford the product.”

While CBD has been approved for over-the-counter sale, there are regulatory hurdles to clear before it actually appears in pharmacies

Chemist Warehouse and Cannatrek do medical cannabis deal

Chemist Warehouse, Australia’s largest pharmacy chain, will be able to supply low-dose cannabidiol (CBD) products to the masses thanks to an exclusive supply deal with medicinal cannabis company Cannatrek.

CBD products are used to treat conditions such as inflammation, anxiety, insomnia and chronic pain. It is a non-psychoactive cannabinoid, meaning it does not induce the “high” associated with cannabis.

Chemist Warehouse co-founder Jack Gance and Cannatrek CEO Tommy Huppert (wearing hat) have formed a partnership to develop and sell cannabinoid products. Tash Sorensen

Speaking to The Australian Financial Review, Chemist Warehouse founder Jack Gance said the deal involved Chemist Warehouse receiving equity in Cannatrek, which he believed would result in a better outcome for both companies, as well as consumers.

“We looked at 20 suppliers [of medical cannabis] and chose Cannatrek because they grow the product, they know the market and . they’re effective and efficient,” he said.

“We had a situation where they were the right people to do business with and we get equity in the business, so the more we build up the business, the more benefit we get from the equity. Consumers also win because we’re able to offer the best prices.

“Unlike Coles and Woolies that have an antagonist relationship with their vendors, we love our vendors and know we wouldn’t be anywhere without them, so we want to do deals that enhance ours and their position. Equity gives us a stronger incentive to make it work.”

The deal is similar to the one signed between Chemist Warehouse and baby formula and food maker Bubs Australia in 2019, which led to Chemist Warehouse amassing a 10 per cent shareholding as various milestones were met. It also has an equity deal with buy now pay, later player Fupay.

The terms of the Cannatrek agreement were not disclosed, but it also involves a small chunk of upfront equity being given to Chemist Warehouse and additional slices dependent on certain targets being met.

A recent legislative change means CBD products can be dispensed by pharmacists. Tash Sorensen

Cannatrek will work with Chemist Warehouse to develop and bring to market new CBD products on an exclusive basis and these will be sold under one of the Chemist Warehouse brands. Both parties hope the products are available to the general public quickly.

Chemist Warehouse also already dispenses Cannatrek’s THC cannabis products.

Under Australia’s rules, people can only access Schedule 8 (controlled drugs) and Schedule 4 (prescription only) medicinal products through a script from a doctor or specialist under the SAS-B approval system.

But thanks to a recent decision by the TGA to downgrade certain low-dose CBD products to Schedule 3 from Schedule 4, some will now be available over the counter to the public this year.

Founded by CEO Tommy Huppert in 2015, Canntrek began building up its local farming and development operations as soon as medical cannabis was legalised in Australia in 2016.

It operates a farm in Queensland and is also setting up an operation in Shepparton.

Last year it secured an export agreement with Astral Health in the UK.

“In the US and the UK it’s like vitamin C over the counter. This new change in legislation [in Australia] is extremely exciting for the industry,” he said.

“We’re just four years in. The first year was licensing and compliance, then companies like us started building farms. This year you’ll see the supply chain mature considerably.

“In the immediate future it will be far more mainstream. And we’ve got thousands of doctors in Australia prescribing it now.”

Cannatrek’s agreement with Chemist Warehouse covers Australia and New Zealand, but may be expanded to include stores in China, Ireland and other countries where Chemist Warehouse operates.

Cannatrek intends to install tablets in Chemist Warehouse stores to provide instant touch points for consumers’ enquiries about their eligibility to access medicinal cannabis. The company will also become Chemist Warehouse’s exclusive telehealth partner for medicinal cannabis via their partnership with online doctor service Instant Consult.

Mr Gance was introduced to CBD products at trade shows in the US years ago and his wife has previously used a CBD cream to treat neck pain.

“I see this as the beginning of a wave of new products that could have really good benefits to consumers,” he said. “CBD is growing because it works.”

Thanks to a new deal between Chemist Warehouse and Cannatrek, Australians will be able to buy CBD products over-the-counter from the country’s largest pharmacy chain.