High Stakes: Advertising Risks for Businesses Involved with Medical Cannabis

Corporate & Commercial

minutes reading time

DATE PUBLISHED: January 23, 2024

key takeaways

  • It's unlawful to advertise medicinal cannabis to consumers.
  • Complying with therapeutic goods advertising requirements is complex but essential.
  • Whether material is 'advertising' depends on the context in which it is viewed.
  • The TGA uses a range of compliance and enforcement tools to ensure compliance with the the therapeutic goods requirements. 

On the 18th Dec 2023, the Therapeutic Goods Administration (TGA) published its ‘Advertising guidance for businesses involved with medicinal cannabis products’. This follows a communication in July 2023 which outlined their import, advertising and supply compliance priorities for 2023-24, with a focus on nicotine vaping products, medicinal cannabis advertising, and the wellness and beauty industries. For doctors, pharmacists and other stakeholders in the medical cannabis sector who may prescribe, manufacture, supply, dispense and/or operate clinics, the Guidance has significant implications. It comes off the back of high profile litigation launched on the 1st Dec 2023 by the Secretary of the Department of Health and Aged Care in the Federal Court of Australia against CDA CLINICS QLD PTY LTD T/A CDA EXPRESS and Dr Benjamin Jansen, seeking declaratory relief and civil penalties associated with alleged breaches of medicinal cannabis advertising laws.

what is the litigation about?

The litigation is the culmination of an over 2 year investigation alleging the first Respondent advertised (made prohibited and/or restricted representations) pertaining to therapeutic goods containing cannabidiol or ‘CBD’. It was further alleged that former Founding Director, Dr Jansen (a GP, prescriber, lecturer, educator and advocate for medical cannabis), knew, caused or permitted conduct associated with each of the matters alleged (with the exception of certain social media and blog posts).

Medically available via prescription since November 2016, cannabis continues the journey of making the leap from formerly prohibited substance to legal medicine. However, with that leap has come the hard reality of being regulated as a therapeutic good within an evidence based medicine framework. With over 500 products now available in the Australian market, over 1 Million scripts approved via the Commonwealth’s Special Access and Authorised Prescriber schemes, and a compound annual growth rate of 30%, the sector attracts the interests of many community stakeholders, with diverse objectives, against a backdrop of fierce competition and risk taking behaviour by certain players.

what is medicinal cannabis

Cannabinoid Based Medicinal Products (CBMPs) or ‘medicinal cannabis’ is a phrase used here to describe:
the use of medical cannabis (or cannabinoids, whether in plant ‘phyto’, endogenous, synthetic or isolated forms) as part of treatment for a specific symptom or disease.i

CBMPs modulate the endocannabinoid system (ECS).ii The ECS is a major neuromodulatory system involved in the regulation of homeostasis that has evolved over 500 million years in mammals, birds and fish.iii The NIH in the United States have stated modulating endocannabinoid activity may have therapeutic potential in almost all diseases affecting humans.iv

what is cannabidiol ('CBD')?

CBD is a non-intoxicating cannabinoid and one of over 144 phyto-cannabinoids that can be extracted from the cannabis plant or manufactured seperately by synthetic means. It is a CBMP that has been available on the Pharmaceutical Benefits Scheme (PBS) since 2021 in the form of Epidyolex®. as an antiseizure medication. for severe forms of childhood epilepsy (namely, Dravet syndrome). CBD is not impairing, meaning it does not cause a “high”. According to a report from the World Health Organization, in humans, CBD exhibits no effects indicative of any abuse or dependence potential and, to date, there is no evidence of public health related problems associated with the use of pure CBD.v

However, advertising medicinal cannabis products (including CBD) to the Australian public is prohibited under the Therapeutic Goods Act 1989 (the Act) and the Therapeutic Goods Advertising Code (No.2) 2018 (the Code). The TGA has previously issued many infringement notices to licensed medicinal cannabis companies, for the unlawful advertising of medicinal cannabis products on their websites and social media platforms. The TGA takes the view that disruption of the unlawful advertising of these products, through a combination of education, intelligence, and compliance action is necessary on the basis that public promotion of these medicines may inappropriately influence demand, disrupt the relationship between patients and medical professionals, and bring disrepute to the industry.

What is different here is that the conduct is alleged to have risen to a threshold requiring litigation and its potential precedential value once ruled upon given conjecture in the sector around the extent to which certain conduct is deemed ‘advertising’ under the Act.

The advertisements here are alleged to have contained:

  • prohibited representations;
  • restricted representations;
  • prohibited references to substances included in Schedules 3, 4 or 8 to the Poisons Standard;
  • unauthorised references to goods not entered on the Australian Register of Therapeutic Goods (ARTG). 


The allegations here centre around the ‘advertisements’ containing prohibited representations regarding CBD as a treatment, cure or prevention for cancer (a neoplastic disease); gonorrhoea (a sexually transmitted disease); depression (a mental illness); anxiety (a mental illness); post-traumatic stress disorder (a mental illness); and/or autism (a mental illness). Furthermore that restricted representations were made in advertising CBD for fibromyalgia, epilepsy, autoimmune conditions, chronic pain, seizures, meningitis, and/or autism.


What harm is alleged from this advertising of CBD?

The alleged harm the Secretary states in the Consise Statement lodged with the Court is that ‘the advertising of products containing CBD carries a significant risk to health and safety when those products are advertised as a treatment for a range of serious illnesses, in circumstances where the quality, safety and efficacy of those products have not undergone full pre-market evaluation for the purposes for which they are to be used.’vi The Secretary goes on to submit that ‘patient self-selection of prescription-only medicines exposes them to a range of risks, including that their condition will not be treated appropriately or they will be exposed to adverse events that might have been avoided by a different treatment strategy.vii i.e., the selection of prescription medicines and the treatment of serious medical conditions should be undertaken in consultation with a medical practitioner (essentially a strong objection to the virtual online ‘click through clinic’ distribution model of CBD that is broadly alleged in the conduct under dispute). Furthermore, that the advertising may lead to ‘inappropriate demand’ that ‘undermined the integrity of the therapeutic goods framework to protect the public from misinformation’, and that ‘customers have purchased the CBD Products for therapeutic purposes and not experienced any health benefit, are likely to have suffered financial loss.’ It is notable that no product ‘harms’ to any Australian consumers are alleged in the filing details before the Court.

It is also of interest and relevance, in the context of the alleged advertising undermining the ‘integrity of the therapeutic goods framework’, that the TGA announced a final decision some 3 years ago to down-schedule certain low dose CBD preparations from Schedule 4 (Prescription Medicine) to Schedule 3 (Pharmacist Only Medicine – i.e., to ‘over the counter, no prescription necessary’). Somewhat paradoxically, the TGA have not since approved any CBD products on the ARTG that meet that Schedule 3 criteria, perhaps speaking to the ongoing ‘challenge’ of this leap medical cannabis products are making to being regulated as therapeutic goods in Australia?viii

conclusion

Medicinal cannabis products in Australia are generally regulated as prescription medicines and under the Act, advertising medicinal cannabis to the public is strictly prohibited. Referring to medicinal cannabis in promotion materials, in company, business or trading names, or advertising a health service to intimate the ability to supply medicinal cannabis is not permitted. The TGA has and will continue to use a range of compliance and enforcement tools to ensure compliance with the therapeutic goods regulatory requirements. Stakeholders need to be very alert to their public posturing as serious sanctions and penalties can be imposed against those who do not comply with the advertising and other applicable regulatory requirements.

how can mcw help?

If you would like to discuss the potential implications of this new TGA guidance and litigation for your circumstances, please contact Andrew Proudfoot of McInnes Wilson lawyers for a discussion. Our market leading commercial, health and aged care law practice areas are able to assist with the following and other issues related to medical cannabis:

  • Dealing with regulators like TGA, ODC, AHPRA for cannabis businesses, doctors, pharmacists and other health practitioners.
  • Dealing with other regulations/regulators relating to medical cannabis related businesses, such as ASIC (greenwashing), ACCC (misleading and deceptive conduct), ATO (R&D, corporate and personal income tax, GST), Commonwealth and State/Territory Health Departments.
  • Acting for employers on issues of conjecture related to cannabis (Workcover, Drug Driving, Anti-discrimination policies, Workplace Health & Safety, Transport and Insurance). 

i: ‘Medical Cannabis’ definition adapted from the work of Associate Professor in Family Medicine and Anaesthesia, Mark A. Ware, Director of Clinical Research of the Alan Edwards Pain Management Unit, McGill University Health Centre writing for ‘Britanica’ https://www.britannica.com/science/medical-cannabis accessed 17.01.2024
ii: National Academies of Sciences, Engineering, and Medicine. 2017. The health effects of cannabis and cannabinoids: The current state of evidence and recommendations for research. Washington, DC: The National Academies Press.
iii: McPartland JM, Matias I, Di Marzo V, Glass M. Evolutionary Origins of the Endocannabinoid System. Gene (2006) 370:64–74
iv: Pacher P, Kunos G. Modulating the endocannabinoid system in human health and disease--successes and failures. FEBS J. 2013 May; 280(9):1918-43
v: Cannabidiol (CBD): critical review report World Health Organization - Geneva, Switzerland: WHO, 2018
vi: See p.4 section D paragraph 23 
https://www.tga.gov.au/sites/default/files/2023-12/concise-statement-cda-clinics.pdf accessed 17.01.2024
vii: ibid at paragraph 24
viii: Gleeson, Penny --- "The Challenge of Medicinal Cannabis to the Political Legitimacy of Therapeutic Goods Regulation in Australia" [2020] MelbULawRw 5; (2020) 43(2) Melbourne University Law Review 558 available at 
https://classic.austlii.edu.au/au/journals/MelbULawRw/2020/5.html accessed 17.01.2024

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