Medical Cannabis Clinic Advertising and Professional Sports: swimming with dolphins or sharks?

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DATE PUBLISHED: May 1, 2024

key takeaways

  • Unlawful advertising of medicinal cannabis products is a breach of the Therapeutic Goods Act. 1989 (Cth) for which serious penalties can apply, including fines or civil or criminal court action.
  • Whether material is ‘advertising’ depends on the context in which it is viewed.
  • Professional sports people and sporting codes should do essential due diligence on the businesses and individuals involved with medical cannabis, along with the advertising and representations being made to the public about their involvement to ensure their brand and reputation risk is managed appropriately.

Medical Cannabis Clinic Sponsorships and Professional Sports: swimming with dolphins or sharks

In January 2024 we wrote about the Secretary of the Department of Health and Aged Care on behalf of the Therapeutic Goods Administration (TGA) initiating high profile litigation seeking declaratory relief and civil penalties associated with alleged breaches of medicinal cannabis advertising laws. The litigous streak continued in April with Court proceedings also initiated against Montu Group Pty Ltd, Alternaleaf Pty Ltd, and common director Mr Christopher Strauch for alleged unlawful advertising of medicinal cannabis. This case is significant because on 7 March 2024, National Rugby League (NRL) side the Dolphins became the first Australian professional sports team to partner with a ‘plant based medicine clinic’ sponsor (Alternaleaf) as a major jersey sponsor. As an Official Partner of the Dolphins, Alternaleaf is to be featured on the sternum of all Dolphins uniforms in the 2024 season, and the logo to be prominently featured at Dolphins games held at both Suncorp Stadium in Brisbane, and Kayo Stadium in Redcliffe. Alternaleaf is to be actively engaged with the Dolphins NRL team to reduce stigma and ‘foster a more informed and educated community around the one million-plus Aussies who rely on these medications.’

Following the initiation of these Court proceedings on 19 April for alleged unrelated flouting of medical cannabis advertising regulations, the Alternaleaf brand was infamously taped over that evening on Dolphin’s jerseys in the first half of the game against Parramatta in Darwin. Since then, it appears the Alternaleaf branding will not appear on Dolphins NRL jerseys or at stadia in the near future as lawyers for the NRL, Dolphins, Alternaleaf and the TGA seek legal clarity on the limits of advertising medicinal cannabis related business subject matter to the Australian public. So with professional sports seeking new sources of sponsorship funding it’s appropriate to ask: does medical cannabis related sponsorships in professional sports involve swimming with dolphins or sharks?

Why are Professional Sports interested in Medical Sponsorships and Medical Cannabis?

Professional sporting codes that have a strong commitment to health and wellbeing are looking at emerging businesses for additional sponsorship income streams. The re-emergence of cannabinoids into western medicine has opened up additional legal sponsorship avenues. Rising incidents of concussion causing forced early retirements and the potential of novel therapeutics to reduce risk are also not lost on sporting codes seeking to reduce their potential liability exposure in negligence surrounding brain injuries. To reinforce the prominance and interest professional athletes and medical professionals place on the potential of cannabinoids in sports injury, health and wellbeing in Australia, Levin Health (a different competing medical clinic), for example, have recruited a ‘who’s who’ of Australian sport to their Sports Advisory Board including, Alastair Clarkson, Lauren Jackson, Damien Oliver, Damien Hardwick, Andrew Johns and Andrew Bogut. Levin Health use an evidence based approach to develop pharmaceutical grade cannabinoid products and objective diagnostics and treatments for pain, inflammation, concussion and mental health. They have a Phase 2A randomised, double-blind, placebo-controlled clinical trial approved to evaluate the efficacy of their licensed, patented cannabinoid formulation in treating patients with chronic pain.

Cannabidiol (CBD) is a non-intoxicating cannabinoid derived from the plant Cannabis sativa. Authors from the University of Sydney’s Lambert Initiative for Cannabinoid Therapeutics report that unlike the intoxicating cannabinoid, Δ9-tetrahydrocannabinol (Δ9-THC), purified CBD is no longer prohibited by the World Anti-Doping Agency, appears to be safe and well-tolerated in humans and may exert a number of physiological, biochemical, and psychological effects with potential to benefit athletes. They recommended in 2020 that ‘rigorous, controlled investigations clarifying the utility of CBD in the sporting context are warranted.’ Fellow cannabinoid researchers from Italy, Canada, Belgium and France that same year noted athletes could benefit from CBD to:

  • manage pain, inflammation and the swelling processes associated with injury; 
  • manage anxiety, fear memory process, sleep and sleepiness; and
  • could be interesting for the management of mild traumatic brain injury and chronic traumatic encephalopathy. 

What is the Alternaleaf Litigation about?

It is alleged by the TGA in the concise statement that Montu and Alternaleaf unlawfully advertised medicinal cannabis using terms including ‘medical cannabis’ and ‘plant medicine’ to promote the Alternaleaf online clinic, which enabled patients to purchase prescription-only medicines after completing an online consultation process.

  • implied that medicinal cannabis had been approved or recommended by the TGA
  • represented medicinal cannabis to be safe or without harm or side effects, or magical or miraculous
  • included endorsements from current or former health professionals.

The TGA alleges that Mr Strauch aided, abetted, counselled or procured the alleged contraventions by Montu and Alternaleaf. Additionally, the TGA alleges that Mr Strauch is personally liable for the alleged contraventions by the companies.

Despite repeated warnings by the TGA about the alleged non-compliant advertising, the companies continued to advertise medicinal cannabis. The TGA lists 226 offences involving multiple regulation breach claims.

Conclusion

Over the last 2 years, the TGA has issued 119 infringement notices (totalling over $1.4 million) in response to concerns about alleged unlawful advertising in the medicinal cannabis industry.

Professional sports people and sporting codes should do essential due diligence on the businesses and individuals involved with medical cannabis related business, and the advertising and representations to be made to the public about their involvement to ensure their brands and reputation risks are managed appropriately. Surfing wisdom has suggested in the past that ‘where Dolphin’s swim there are never sharks,’ but only time will tell if this is true in the medical cannabis sponsorship and advertising space.

how can mcw help?

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

  • Dealing with regulators like TGA, ODC, AHPRA for cannabis businesses, doctors and pharmacists, including on advertising matters.
  • 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, Insurance).

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