Head Office PO Box 108 Virginia, QLD 4014 Australia

ECOFIBRE LIMITED Tel: +61 7 3265 7630 WWW.ECOFIBRE.COM

16 January 2020

Committee Secretary Senate Standing Committees on Community Affairs PO Box 6100 Parliament House Canberra ACT 2600 [email protected]

Dear Committee Delegates,

Inquiry into the current barriers to patient access to medicinal cannabis in Australia Ecofibre is pleased to submit its response to the Senate inquiry into the current barriers to patient access to Medicinal Cannabis (MC) in Australia. Our submission is based on direct relevant commercial experience in the US and an understanding of the Australian MC landscape. This submission addresses several items in the Terms of Reference (TOR) noted in Annex 1. It also focuses on presenting a higher-level strategic view as we believe structural change would be the most effective means to address multiple issues in the TOR. Our assessment is that smaller technical adjustments would only be appropriate to incrementally improve a working system, which is not the case in Australia on a relative basis to other countries. BACKGROUND ON ECOFIBRE LIMITED’S (EOF) EXPERIENCE FOR THIS SUBMISSION Ecofibre is an ASX-listed Industrial Hemp company. It has businesses in the US and Australia and is one of the very few profitable cannabis companies globally with revenues of $35.6m and profit after tax of $6m (FY2019). Our medicinal cannabis business, relevant to this submission, was originally established in Australia but in April 2016 moved to the US once we assessed the regulatory framework to be implemented by the ODC in late 2016. In the US, Ecofibre was an original architect of the Hemp provisions in the 2014 and 2018 Farm Bills working closely with Senator Mitch McConnell to pass these into law. Industrial Hemp and its products are federally legal for production, distribution and export in the US. The key factors that supported this ground-breaking change in federal law were that Hemp has no diversion risk as the level of THC is so low that it has no narcotic value and the uses of the plant were so broad that it is classified as an agricultural crop. Our recommendations are based on experience that Ecofibre has with medical practitioners and professionals in the education and distribution of hemp-derived medicinal cannabis.

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Specifically, Ecofibre: • Only manufactures and distributes low / no-THC products, which are unscheduled under the US 2018 Farm Bill provisions. All products are full spectrum. • Manufactures and produces over 100,000 units of product / month. • Distributes products in over 4,200 pharmacies across all 50 States. Ecofibre is the market share leader for CBD products sold via US pharmacies with more than 70% share. • White labels CBD products for the #2 and #4 medical practitioner brands in the US. • Costs the end patient between $1-4 USD per day. These products are paid for out- of-pocket and are in general considered ‘affordable’. • Conducts a wide range of training programs for doctors, pharmacists and distributors led by our Chief Science Officer who holds the only Ph.D. specialising in Cannabinoid Science in the US. • Holds the only IND (Investigational New Drug) issued by the FDA for a full spectrum hemp-derived cannabis product. This product will be used in an FDA approved study conducted by the Lankenau Medical Research Center to treat cancer patients diagnosed with chemotherapy induced peripheral neuropathy. NOTE: It is important to distinguish the difference between industrial hemp and marijuana for the purposes of our US experience. Ecofibre does not deal in the marijuana industry (which is defined in the US by THC levels). The marijuana industry is legal on a state by state basis but illegal at the Federal level. Ecofibre does not have a position on the legality of marijuana or its use by patients. We have made the strategic decision to focus on industrial hemp from a commercial business model perspective as we have three business units utilising all parts of the plant. LESSONS THAT CAN BE APPLIED IN AUSTRALIA The development of the US market is rich with lessons that can be applied in Australia – both in terms of best-practice and in avoiding mistakes and unintended consequences. 1. The US legalized hemp-derived MC (low THC) at the federal level. This mostly avoids unharmonized approaches by different states. By making these products legal and easily available / affordable, patients do not risk illegal activity and the personal risks that come with that. Moreover, the medical practitioners have a much more open forum to discuss developments in cannabinoid science and thus naturally an entire ecosystem of open and accessible education has become available. 2. The de-scheduling of hemp (low THC products) resulted in a ‘free market’ in the US leading to a market supplied by hundreds of competitors resulting in low prices and broad availability. Products are accessible without the need for government or private insurance subsidy. Strong competition also ensures a large variety of formats (e.g. topical, ingestible) and service sizes so patients can choose the products that best suit their needs.

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3. Australia has an opportunity to improve on aspects of the US experience. The rapid shift in regulatory oversight of hemp-derived MC from the U.S. Justice Department (Drug Enforcement Administration) to the US Department of Agriculture (Food & Drug Administration) resulted in some gaps during the transition. The shift in agency oversight resulted in some inconsistency in the application and enforcement of various regulations. This increased regulatory risk meant some market participants such as banks / IT companies felt reluctant to serve MC companies. The shift was also misread by the market as complete deregulation which saw a rapid increase in the number of market participants in the US system leading to a “Wild West” environment with inconsistent quality, misleading health claims and inappropriate use of the products (for example in candies and vaping). DISCUSSION OF RECOMMENDATIONS: We believe many of the issues raised in the Senate Inquiry TOR can be addressed by making structural decisions similar to the US with improvements from the benefit of hindsight. These changes can help many patients, children in particular, who only need a micro-dose of THC or may not need any THC as part of their desired treatment. Our recommendations are based on the direct involvement in establishing US regulation and commercial experience within the medical professional segment of this market. The following diagram highlights our recommendations within the context of addressing several of the issues noted in eight (8) of this Inquiry’s Terms of Reference.

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We are available to provide additional information to the committee and share our collective experiences (e.g. research programs, practitioner education, online Ananda Health University) from our US operations and assist to explore options to improve MC access by Australian patients in a safe affordable manner.

Yours sincerely, For and on behalf of the Board

Barry Lambert Eric Wang Chairman CEO and Managing Director Ecofibre Limited Ecofibre Limited

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Annex 1 Terms of Reference The current barriers to patient access to medicinal cannabis in Australia, including:

a) the appropriateness of the current regulatory regime through the Therapeutic Goods Administration (TGA) Special Access Scheme (SAS), Authorised Prescriber Scheme and clinical trials; b) the suitability of the Pharmaceutical Benefits Scheme for subsidising patient access to medicinal cannabis products; c) the interaction between state and territory authorities and the Commonwealth, including overlap and variation between state and territory schemes; d) Australia’s regulatory regime in comparison to international best practice models for medicinal cannabis regulation and patient access; e) the availability of training for doctors in the current TGA regulatory regime for prescribing medicinal cannabis to their patients; f) the education of doctors in the Endogenous Cannabinoid System (ECS), and the appropriateness of medicinal cannabis treatments for various indications; g) sources of information for doctors about uses of medicinal cannabis and how these might be improved and widened; h) delays in access, and the practice of product substitution, due to importation of medicinal cannabis and the shortage of Australian manufactured medicinal cannabis products; i) the current status of the domestic regulated medicinal cannabis industry; j) the impacts on the mental and physical wellbeing of those patients struggling to access medicinal cannabis through Australia’s regulatory regime; k) the particular barriers for those in rural and remote areas in accessing medicinal cannabis legally; l) the significant financial barriers to accessing medicinal cannabis treatment; m) the number of Australian patients continuing to rely on unregulated supply of medicinal cannabis due to access barriers and the impacts associated with that; and n) any related matters.

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