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CBD (cannabidiol) oil and related hemp products are generating major interest across Australia. Whether you’re a wellness entrepreneur, a pharmacist considering carrying CBD products, or an established business eyeing expansion into medicinal cannabis, you’ve no doubt asked yourself: Is CBD legal in Australia?
It’s a fair question, and the answer is a little nuanced – especially if you want to stay compliant and grow your business the right way from the start. While the popularity of CBD oil in Australia has soared, complex laws and fast-evolving regulations mean you need a clear grasp of how to operate safely and legally. From prescription-only access to state-to-state differences, there’s a lot to know before you step into this emerging industry.
In this guide, we’ll clarify where CBD oil is legal in Australia, what business owners need to know in each state, how to remain compliant, and the essential legal documents and contracts to consider. If you’re exploring CBD or medical cannabis, keep reading for answers, confidence, and a roadmap to get started.
What Is CBD and How Is It Regulated in Australia?
CBD, or cannabidiol, is one of many cannabinoids found in cannabis plants. Unlike THC (tetrahydrocannabinol), CBD is non-psychoactive – it won’t make you high. Instead, CBD is known for potential therapeutic uses, from pain and anxiety management to anti-inflammatory effects.
But in terms of the law, CBD in Australia is not the same as hemp seed oil or everyday supplements sold overseas.
CBD is classified as a Schedule 4 drug under the Poisons Standard set by the Therapeutic Goods Administration (TGA). That means CBD is considered a prescription-only medicine, and its sale, supply, and use are tightly restricted.
Is CBD Oil Legal in Australia?
The short answer: CBD oil is legal in Australia, but only by prescription and within strict regulations.
Here are the key points to know:
- CBD products must be formally approved, or prescribed by a doctor under special pathways. Most CBD oils on the Australian market are only available through the Special Access Scheme (SAS) or as part of a clinical trial.
- Over-the-counter (OTC) sale of CBD oil is not yet widespread. There has been recent momentum for certain low-dose CBD preparations to be down-scheduled to Pharmacy-Only (Schedule 3), but as of now, approved OTC products are yet to hit shelves.
- CBD oil cannot be freely marketed or sold online, in health food stores, or supplement aisles. Importing, advertising, or supplying CBD outside regulated channels is a breach of Australian law.
If you’re looking to launch a CBD business in Australia, you’ll be dealing with a prescription medicine – with all the legal compliance and record-keeping requirements that come with it. Let’s break down the situation state by state.
CBD Legal Status Across Australian States and Territories
While the TGA and Commonwealth government set the overarching scheduling and medical cannabis framework, each state and territory has its own laws about supply, pharmacy practice, and who can prescribe CBD. Here’s a quick rundown of the legal landscape in key jurisdictions:
Is CBD Oil Legal in Victoria?
Yes – CBD oil is legal in Victoria, but access is strictly controlled by prescription. Only registered medical practitioners who have appropriate authorisation can prescribe medical cannabis, including CBD. There are specific rules under Victoria’s medical cannabis access scheme. You cannot buy CBD oil in regular shops or without a prescription.
Is CBD Legal in NSW?
CBD oil is legal in NSW but, again, only as a prescription medicine. Doctors can prescribe CBD via the Special Access Scheme or Authorised Prescriber pathways. Retail sale without proper approvals remains illegal.
Is CBD Oil Legal in WA/Western Australia?
CBD oil is legal in WA but, as in other states, only on prescription. Both patients and pharmacists must comply with WA’s specific medicines and poisons regulations.
Is CBD Oil Legal in South Australia?
Yes – through prescription only. There are local procedures for prescribing, dispensing, and patient access.
Is CBD Oil Legal in Tasmania? What About Over-the-Counter?
Tasmania is known for having stricter controls. CBD oil is legal only with a prescription, and typically for severe, treatment-resistant conditions where standard therapies have failed. As in other states, over-the-counter CBD is not available yet, despite changes at the federal level. All supply must go through the Tasmanian Government’s Controlled Access Scheme and a medical professional.
How Do I Get Medical Cannabis in Darwin/Northern Territory?
In the NT, access to medical cannabis (including CBD) is also limited to prescriptions by NT-registered doctors under the SAS, with oversight from local health authorities. There’s no legal over-the-counter or supplementary product channel at present.
Is Hemp Seed Oil Legal in Australia?
Yes! Hemp seed oil is not the same as CBD oil. Hemp seed oil comes from the seeds of the hemp plant and contains negligible amounts of cannabinoids (mainly used as a food or cosmetic product). It can be sold legally at Australian supermarkets and health food stores. However, if a hemp seed oil product claims health benefits or contains measurable CBD, it must comply with medicine regulations. For more, see our guide on hemp laws in Australia.
How Can a Business Legally Sell CBD Products in Australia?
If you want to step into the business of CBD oil in Australia – whether as a pharmacy, manufacturer, or wellness provider – you need to stay inside the regulatory framework. Here are the steps and considerations.
Prescription and Pharmacy Model
- CBD oil can only be dispensed through pharmacy with a prescription written by an authorised medical practitioner.
- Pharmacies must comply with state medicines and poisons laws (dispensing, storage, record-keeping).
- Pharmaceutical suppliers need relevant TGA approvals and must comply with strict advertising rules (it’s illegal to market prescription CBD oil to the general public).
Manufacturing and Importation
- Manufacturers and importers of CBD products must have Therapeutic Goods Administration (TGA) licences (for manufacturing, supply, clinical trials).
- Imported CBD products must comply with TGA Good Manufacturing Practices and be approved via legal channels.
- All advertising to consumers is tightly controlled and generally prohibited for prescription products.
Online and Retail Sales
It is currently illegal to sell prescription CBD oil online directly to Australian consumers without the proper medical framework and authority. Any online or retail business must comply with the same rules as bricks-and-mortar pharmacies – which means no customer can lawfully buy CBD oil without a prescription.
Special Access Schemes
Doctors can prescribe (or authorise patients) to use unapproved CBD products through the TGA’s Special Access Scheme (SAS) or under Authorised Prescriber arrangements. This is the leading route for patient access in Australia right now, alongside clinical trials.
What About Over-the-Counter (OTC) CBD?
In early 2021, the TGA down-scheduled certain low-dose cannabidiol products from Schedule 4 (Prescription-Only) to Schedule 3 (Pharmacist-Only Medicine), technically paving the way for OTC CBD. However, this only applies to products that are registered on the Australian Register of Therapeutic Goods (ARTG) and meet strict dosage and safety requirements.
To date, no CBD oils in Australia have successfully registered for OTC sale – so genuine over-the-counter CBD is not yet available, despite media headlines. Any business marketing or selling CBD oil as OTC is non-compliant unless the product is formally registered.
When Will OTC CBD Oil Be Available in Australia?
Many expect that TGA-approved OTC CBD products will eventually hit Australian pharmacy shelves, but until one is registered, sales must continue via prescription only. Keep up to date with regulatory developments, and ensure your business is always operating within the law.
Legal Risks: Why Compliance Matters for Your CBD or Hemp Business
There can be severe penalties for non-compliance, including:
- Fines, criminal charges, or loss of pharmacy/medical licence for businesses or individuals selling, importing, or supplying CBD unauthorised
- Improper advertising or health claims (significant fines under TGA and ACCC regulations)
- Product seizure, prohibitions on sale, or forced product recalls
It is critical to remain up to date with legal requirements for selling or marketing any cannabis- or hemp-derived product in Australia. Unlawful CBD operations risk not just financial penalties, but also serious business and reputational loss.
Step-by-Step Guide to Setting Up a Compliant CBD Business in Australia
Ready to explore CBD as a business opportunity? Here’s a practical step-by-step approach:
1. Do Your Research and Understand the Market
- Review demand and competitor landscape – who is importing, compounding, or dispensing CBD in your niche?
- Assess the regulatory pathway: are you supplying as a pharmacy, wholesaler, or considering manufacturing/importation?
- Document a clear business plan covering costs (e.g., medical marijuana costs in Victoria), operating procedures, and risk management strategies.
2. Choose Your Business Structure
- Sole Trader: Simple setup, single owner, but personal liability for business debts.
- Partnership: Shared responsibility and profits, but partners are jointly liable.
- Company: Separate legal entity, limited liability, higher setup and ongoing obligations (often preferred for compliance-heavy industries).
For most CBD businesses – especially those dispensing prescription products, dealing with pharmacies, or importing – a company structure offers key protections.
3. Register Your Business and Get the Right Licences
- Apply for an ABN and, if a company, an ACN for Australian company registration. See our guide on registering your ABN.
- Register your business name and ensure it doesn’t infringe existing brands or trade marks.
- Obtain any required state or local licences, including pharmacy, poisons, or import/export permits.
- If manufacturing, seek TGA (Therapeutic Goods Administration) licences for your activities – cover both Australian and imported products.
4. Ensure Compliance with Key Laws
- Therapeutic Goods Act: All “medicinal cannabis” (including CBD) must comply with this federal law and TGA scheduling.
- State Medicines & Poisons Regulations: Storage, supply, and record-keeping vary by state and must be followed meticulously.
- Australian Consumer Law (ACL): All product claims, returns, and advertising must comply – especially for refunds, misleading claims, or warranties. Read more about Australian Consumer Law.
- Privacy & Data Protection: If you’re collecting customer data (including through prescription fulfilment), ensure you have a compliant Privacy Policy and adequate protections.
5. Draft Essential Legal Documents
A successful CBD, medicinal cannabis, or hemp seed oil business should have bespoke legal documents, including:
- Supply Agreement: If ordering from overseas or local manufacturers, a supply agreement covers product quality, regulatory compliance, and liability.
- Pharmacy or Distribution Agreements: Outlines responsibilities for pharmacies or distributors who stock/sell your products (including marketing, fees, and compliance duties).
- Terms and Conditions or Customer Contracts: Set clear expectations for your customers, even if your primary clients are professionals (pharmacies, doctors). For online sales (when legal), consider robust online terms and conditions.
- Privacy Policy: Legally required if collecting any personal or medical data online, through orders, or for marketing.
- Employment Agreements & Staff Policies: If hiring staff, especially for regulated roles (pharmacist, technician, delivery) – include workplace health and safety, privacy protocols, and role clarity.
- Non-Disclosure Agreement (NDA): To protect product formulations, recipes, or other business IP when negotiating with partners or suppliers.
You may not need all these documents on day one – but most established businesses will need several. Consulting a business solicitor is a vital step to ensure everything is tailored to your situation and risk appetite.
6. Stay on Top of Ongoing Compliance and Record-Keeping
- Keep accurate records of prescriptions, inventory, and sales; TGA and state health audits expect this.
- Update your licences and registration annually or as required.
- Monitor regulatory changes – the medicinal cannabis industry is rapidly evolving, and compliance obligations can shift. Consider regular legal health checks for your business.
Can I Sell CBD Oil Online in Australia?
At this time, you cannot sell CBD oil directly to the general public online in Australia unless you are a registered pharmacy and the sale is made by prescription. Website, e-commerce, or telehealth models must still comply with all federal/state regulations – and cannot bypass the prescription requirement.
Unlawful online sales or misleading health claims can lead to product seizures and enforcement action from the TGA and ACCC. Always seek legal advice before launching any online CBD platform or retail operation.
What Legal Documents Will I Need?
Most CBD or hemp businesses will need to consider:
- Supply Agreements: To govern relationships with growers or manufacturers.
- Distribution Agreements: For wholesale or pharmacy partnerships.
- Privacy Policy: If collecting and storing customer/patient information.
- Terms and Conditions (B2B or B2C): Outlining the commercial terms of products or services.
- Employment Agreements/Workplace Policies: To set clear terms for staff, including health and safety and compliance.
- Shareholders Agreements: If you have multiple founders or investors in the business.
- Non-Disclosure Agreements (NDA): To protect confidential information in business dealings.
Each business will have unique requirements, but making sure these core areas are covered will reduce your risk and help your business meet regulatory standards from day one. More on these contracts can be found in our legal documents for businesses guide.
Key Takeaways
- CBD oil is legal in Australia only by prescription and within regulatory channels; retail or online sales without proper authorisation are illegal.
- Hemp seed oil is legal and widely available in Australia, but it’s not the same as CBD oil or medicinal cannabis.
- Each state and territory adds its own layer of regulation – always check your local rules before launching or expanding a CBD business.
- You need an ABN, appropriate company or partnership structure, and business licences to operate legally; register your business before you trade.
- Draft essential contracts and policies – like supply agreements, privacy policies, and employment agreements – to ensure compliance and manage risk.
- Ongoing compliance is crucial: keep up-to-date with TGA and state requirements, maintain accurate records, and review supplier/partner arrangements regularly.
- Getting legal advice early can help you avoid costly mistakes and focus on building a sustainable, compliant CBD business.
If you would like a consultation on starting or running a CBD or medicinal cannabis business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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