A failure of the federal government to adequately staff the Office of Drug Control is causing jobs and manufacturing opportunities to head overseas, hemp and cannabis company Elixinol Global’s CEO Paul Benheim told Food & Drink Business.
The Coalition federal government legislated to allow for the cultivation of cannabis for medical and scientific use in 2016. In an undated fact sheet, the government said it would support “greater local opportunities to research, develop, manufacture and supply medicinal cannabis-based products” as well as developing a new agricultural industry.
Elixinol Global’s subsidiary Nunyara applied for a mixed licence for cultivation and manufacturing of medicinal cannabis. Benhaim says they were told it would take about 20 days. “That was over a year ago,” he told F&DB.
The company has complained to the Office of Drug Control (ODC), federal government and relevant ministers. “We've had apologies from all, telling us they've employed more people. We actually met with the head of the Therapeutic Goods Administration last year, who said more people had been employed and that things would speed up. That was September.”
Cannabis industry advisory firm Budding Tech’s managing director Adam Miller says more than 150 applications have been submitted since the legislation changed with less than half approved. Miller says the of Office of Drug Control is “understaffed and overworked, with applications far exceeding their expectations”.
“This involves Schedule 8 and Schedule 4 narcotics. It requires a high level of sophistication to be compliant and applications are very detailed,” Miller told F&DB.
“All applications have to demonstrate supply chain, so you have to show you have a relationship with a manufacturer or visa versa, so that requires further due diligence.
“As a launch pad to APAC, Australia offers cannabis companies an opportunity to generate revenue based on an export model, which is why there is a demand for licenses and permits. Clearly, the department didn’t expect this level of interest which is unfortunate and these errors have caused extreme delays.” Miller has a client whose application has been with ODC since 2017.
Benhaim says the market in the US is growing 120 per cent year on year. “We've just taken on a few major national US retailers. Europe is quite similar in terms of growth. It only just reopened and in two months we have more revenue in the cannabinoid market than we do in Australia when we've been here for years.
“Australia has not faced well for business today, and it's making sure that we put all our investment dollars in jobs overseas. I think it's important people understand that in the US, we employ over 120 people now and we're employing 15 more this week. Our high quality manufacturing facilities have been audited by some of the largest retailers in the world, who we recently started supplying.
“The fact is that this industry has grown up from very modest beginning and it's mainly in the US, in Europe, and now rapidly catching up is Asia. Australia, despite government promises that wants Australia to be a leader in this field, is at the bottom of the pile in terms of supply or business at this time. We hope that will change and we'll move forward and we still believe it will,” Benheim says.