Medicinal cannabis was legalised and then regulated in 2020. Photo / Dean Purcell
By Monique Steele of RNZ
The budding medicinal cannabis sector is struggling to put down roots, and another specialist processing factory is set to close.
But regulators considering current rules and a new industry collective offer some promise to reduce New Zealand’s reliance on imported medicinal bud.
There was a buzz of excitement when medicinal cannabis was legalised, then regulated in 2020 with a view towards growing a domestic sector and serving patients here and abroad.
However, since then, several firms have shut their doors, including Greenfern Industries, Cannasouth and, most recently, Helius Therapeutics.
The latter is planning to close its East Tāmaki factory, affecting 65 workers.
It is one of only a few medicinal cannabis factories nationwide that holds a specialist processing certification called “Good Manufacturing Practice” (GMP).
Medicinal Cannabis Council executive director Sally King said that, under current rules, most producers did not hold that certification, and could put out only raw bud ingredients, not processed products such as more lucrative cannabis capsules.
“In New Zealand, what we’re doing quite a lot of here is we are exporting those ingredients which are made into higher-quality, more dose-specific formats.
“That’s where the real growth is.”
She said medicinal cannabis, like many other primary industries, struggled to keep value-added manufacturing on home soil.
“What would be great would be if we could manufacture and add value onshore for offshore markets, but it is a bit of a challenge.”
Enabling more on-shore processing would give doctors more product options for patients, improving competition and possibly bringing down prices.
“For all primary industries, the greatest question we have is, ‘How do you add the value in export?’ I think it’s an important question for medicinal cannabis, too.”
NZX-listed Rua Bioscience, of Ruatoria, sold its GMP factory in Tairāwhiti in 2023 to focus on exports, due in part to challenges associated with GMP manufacturing.
This week, it celebrated gaining access to the Canadian market for its East Coast-sourced live cultivar clones for further processing there.
Aotearoa largely imports medicinal cannabis flower products, led by Canada, which has built a multibillion-dollar industry since legalising recreational use in 2018.
Rua Bioscience chief executive Paul Naske said the high standards of GMP should be required only for the steps after drying harvested biomass, as this would encourage more local supply into more finished products.
“The manufacture of medicine in New Zealand, yeah, it’s not easy, that’s called GMP manufacture.”
He said the company pivoted towards exports in recent years, focusing on genetic innovation and international partnerships.
“New Zealand doesn’t have a massive depth of medical manufacture in the country.
“We import a lot of medicine ... because it’s costly and large offshore manufacturers have a greater scale.”
Naske recently signed a letter with suggested rule changes to Regulation Minister David Seymour, who also investigated industrial hemp’s regulations.
These included the requirements for stability or shelf-life testing, GMP requirements, and requirements for European Union-bound exports that faced re-testing once on-shore.
It also wanted performance targets for verification assessments and for regulator staffing levels to increase.
Seymour said he referred the letter to the Ministry of Health because the previous Government set up a medicinal cannabis agency to deal with this area of regulation.
“I will be asking them to report on whether they can make these changes and if not, why not?”
He said cutting red tape had sped up the export licensing process, as the number of applications also increased.
“Now they are in the process of implementing changes to make the process even faster.”
In 2022-23, 26 applications took 22 working days to process.
In 2024-25, 65 applications were processed in 10 working days.
Seymour said Medsafe’s export licensing regime review last year meant applications became electronic, rather than paper copies.
He said the export volume of cannabis flower increased from 49 kilograms in 2021 to 2310kg in 2025.
“We need to get money into the country. Not everybody likes this stuff, but there’s a market for it.”
Medsafe said it was committed to issuing export and import licences promptly and was considering further industry feedback on regulations.
“We have to strike the right balance between allowing industry to operate efficiently while also ensuring New Zealanders are accessing quality products.”
In 2024, after industry feedback, Medsafe removed the requirement for exports to meet New Zealand’s minimum quality standards and removed duplicate requirements for assessing and verifying products and ingredients.
It said it was also exploring possible alternative methods for stability testing, and GMP existed to ensure patients could access quality products.
“It’s important that, when people use medicinal cannabis products, they can be confident they are consuming a medicine which has the stated amount of ingredient, is stable, and is free from harmful contaminants, for example.
“Maintaining appropriate manufacturing requirements ensures New Zealanders can access quality products and allows us to uphold New Zealand’s reputation for producing high-quality goods overseas.”
Meanwhile, Ora Pharm launched a new grower collective this week called NZ Grow Co to improve collaboration across cultivation, processing and marketing.
Ora Pharm chief executive Zoe Reece said the sector was looking to move beyond its early, fragmented phase.
“Regulatory clarity is critical to unlocking investment and participation.
“What we are seeing now is the opportunity to build a more co-ordinated, export-focused industry that delivers real economic value.”
It said it was working with around two-thirds of licensed cultivators and had a new extraction facility in north Waikato, which was in the process of trying to obtain an EU GMP certification.
Harvest was now underway for New Zealand’s outdoor medicinal cannabis farmers, including the country’s largest grower, Puro NZ.
- RNZ