Australian stakeholders say black market for CBD is thriving

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Hemp stakeholders in Australia say industrial hemp growers in New South Wales are illegally producing CBD for a burgeoning black market estimated to be ten times the size of the country’s legal medical CBD market.

Australia’s Therapeutic Goods Administration (TGA) relaxed CBD rules late last year, allowing such products to be sold over the counter, under restrictions, once approved. But the agency has yet to give authorization to any CBD products, which remain legal but only by prescription. CBD prescriptions are reported to have doubled to about 10,000 a month this year in Australia. Many consumers turn to black-market products because they are cheaper.

Consumers at risk

Craig Cochran of Brisbane-based medical cannabis producer Medcan told Australia’s ABC news service that products on the black market put consumers at risk. “They don’t know what’s in it, they don’t know how it’s grown, they don’t know if it’s got mold, they don’t know if it’s got pesticides, heavy metals — the list just goes on,” Cochran said.

“It’s common knowledge in the northern New South Wales area that CBD is available at many places,” Paul Benhaim, a non-executive director at Sydney-based CBD purveyor Elixinol Wellness Limited, told ABC. “Many places are claiming it to be legal without a prescription.”

New South Wales police told ABC its enforcement agents work with TGA regulators to monitor the hemp industry but would not say if there were any active investigations into illegal CBD production and sales. TGA does not comment on active investigations.

The agency last year fined one Western Australian more than AUD$10,000 (~$7,000) after it found advertising of certain medical cannabis products to be illegal.

Changes are criticized

Among key changes made last year, the TGA amended its Poison Standard by down scheduling CBD from a Schedule 4 prescription drug to Schedule 3 “pharmacist only” medicine – meaning some low-content CBD products will not be available off-the-shelf but may be obtained from pharmacists who can consult on usage. In addition to gaining TGA approval, CBD products must earn listings in the Australian Register of Therapeutic Goods (ARTG). Stakeholders have estimated products won’t begin to clear the TGA approval process until 2022.

Critics have said the requirement to meet ARTG and other standards means CBD products will face many of the same hurdles and regulations that govern the approval of prescription pharmaceuticals in Australia. The current registration pathway for Schedule 3 drugs requires efficacy data, which could be difficult to produce from CBD with low doses, some CBD stakeholders have warned.

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