Industrial hemp growers in New South Wales are flouting the law to produce medical cannabis products for the black market, according to the head of Australia’s largest hemp seed food producer.

Key points:

  • A major processor of hemp seed food warns that industrial growers in New South Wales are supplying medical cannabis to the black market
  • The TGA last year allowed CBD products to be sold over the counter, but none have yet been through the approvals process
  • New South Wales police says it works with regulators to monitor the hemp industry  but would not confirm any active investigations

Paul Benhaim is the non-executive director of the global group Elixinol Wellness, which owns Hemp Foods Australia.

He claims licensed hemp growers are producing cannabidiol or CBD products for a booming wellness market, even though under Australian law the hemp byproduct is a prescription-only medicine.

A man in a suit smiling.

Paul Benhaim runs Australia’s largest hemp seed food producer.(

Supplied: Paul Benhaim

)

While CBD prescriptions doubled to about 10,000 a month this year, he believed the black market in Australia was about 10 times larger.

“It’s common knowledge in the northern New South Wales area that CBD is available at many places,” he said.

“Many places are claiming it to be legal without a prescription.”

Black market brings risks

This year, the Therapeutic Goods Administration (TGA) relaxed the regulations covering CBD products to make them available over the counter, but no products have yet been through the approvals process required to be made legal.

Brisbane-based medical cannabis producer Craig Cochran said people were taking a risk if they bought CBD products that were not approved by the TGA.

“They don’t know what’s in it, they don’t know how it’s grown, they don’t know if it’s got mould, they don’t know if it’s got pesticides, heavy metals — the list just goes on,” Mr Cochran said.

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Mr Cochran’s company runs a scheme subsidising cannabis medicines for some eligible patients.(

ABC Landline: Halina Baczkowski

)

Mr Cochran said the attraction for some people was price because black market products were cheaper.

His company, Medcan Australia, has started a compassionate access scheme, subsidising cannabis medicines for some eligible patients.

The scheme is being run by general practitioner Laurence Kemp, who heads an online medical cannabis prescription service called Cann I Help.

Dr Kemp said medical cannabis was still treated as an experimental drug in Australia and did not qualify for subsidies under the Pharmaceutical Benefits Scheme.

Because it was derived from a plant, there was little incentive for pharmaceutical companies to invest in the huge cost of scientific trials.

Dr Kemp said CBD products were relatively harmless under medical supervision, compared to medicines containing THC, the psychoactive cannabinoid which is strictly controlled in industrial hemp to below 1 per cent.

A man with dark hair wearing a checked shirt stands in front of a sign.

Dr Kemp believes CBD products can be helpful in treating a number of conditions.(

ABC Landline: Halina Baczkowski

)

“[CBD] has actually been shown in a number of studies to be effective at treating epilepsy, particularly in children,” Dr Kemp said.

“We use it for anxiety, it can sometimes help people with sleep problems, and it also has some painkilling and anti-inflammatory properties, so it’s actually a very useful compound within the cannabis plant.”

A push for reform

Mr Benhaim said Elixinol Wellness wanted to be part of the booming CBD market in Australia, but would have to compete with illegally produced products.

He said government authorities were not taking responsibility for the black market.

A spokesperson for New South Wales police said the force worked with regulators to monitor the hemp industry and ensure compliance, but would not say if there were any active investigations into illegal CBD manufacture and sale.

Medical marjiuana being placed into a plastic bag with a pair of tweezers

Mr Benhaim has urged reform in Australia’s regulation of CBD products.(

ABC News: Jerry Rickard

)

The TGA also said it did not comment on active investigations.

However, it fined a Western Australian man more than $10,000 last year, after a review of illegal advertising of medical cannabis products.

Mr Benhaim said there was a need for further reform in Australia to bring regulations governing CBD in line with other developed nations, where it was commonly sold in supermarkets and health food stores.

Watch this story on ABC TV’s Landline at 12:30pm on Sunday, or on iview

Hemp growers make millions from medical black market
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