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The medicinal cannabis industry is thriving across the globe, and as we move further into 2025, Australia continues to see significant developments around medicinal cannabis and hemp law. With evolving regulations and market dynamics, businesses must stay informed to navigate this exciting yet complex trade area.
Since medicinal cannabis remains a relatively new market segment, it raises a number of questions from businesses wishing to cultivate or manufacture these products. For example, is medicinal cannabis legal in Australia? Do I need a specific licence to operate? And what are the legal obligations as you scale your business? Staying up-to-date with the latest legal requirements for starting a business is essential in 2025.
Medicinal cannabis businesses commonly work with overseas parties and suppliers, which means they must have the correct documentation and legal agreements in place to operate efficiently and compliantly. This includes ensuring your contracts reflect the latest industry standards and are enforceable both domestically and internationally.
In this article, we’ll explain what you need to know to start a medicinal cannabis business in Australia in 2025, highlighting essential licences, legal documents and the necessary business structures to protect your interests.
Is Medicinal Cannabis Legal In Australia?
Medicinal cannabis was legalised in Australia in 2016, and since then, the regulatory framework has been refined to address emerging industry challenges. Although it remains a highly regulated industry, its legal status has provided a clear pathway for those seeking to operate within medical or research purposes.
Even when used for therapeutic purposes, medicinal cannabis must be distributed under a valid prescription in accordance with current guidelines.
Before we dive into the business aspects, here’s some background on the legal environment surrounding medicinal cannabis that has evolved to support its safe and efficient use in 2025.
Hemp And Cannabis Laws In Australia
Hemp and medicinal cannabis laws in Australia remain stringent. These products can only be distributed for recognised medical purposes, and state and territory regulations govern their prescription and supply. The ongoing updates in legislation ensure that these laws reflect global best practices while protecting public health and safety.
The Office of Drug Control (ODC) continues to provide licences and permits under updated guidelines. If you’re a business aiming to engage in the sale or supply of medicinal cannabis, it is essential to apply for the correct licences and qualify under the latest regulatory standards.
We’ve also put together this Guide To Hemp Laws to help you understand how these regulations may impact your business activities in today’s market.
Do I Need A Licence For Medicinal Cannabis?
To secure a licence with the ODC, you must demonstrate that you are a ‘fit and proper person’-this includes a review of your criminal history, financial standing, and your capability to comply with stringent regulatory requirements. In 2025, these checks remain a pivotal part of the application process.
Licences are available for cultivators, manufacturers, importers, and exporters of medicinal cannabis. Each role demands adherence to specific legislative requirements.
For instance, cultivators of hemp and medicinal cannabis must hold a medicinal cannabis licence under the Narcotic Drugs Act 1967. Our lawyers can guide you through your options with our dedicated Medicinal Cannabis Consultation package.
Similar to industries like alcohol sales-where you must apply for the appropriate Liquor Licence-medicinal cannabis businesses must ensure that all relevant regulatory licences are in place.
Register Your Medicinal Cannabis Business
As with any business, a medicinal cannabis enterprise must be officially registered with the appropriate Australian bodies. This not only legitimises your business for taxation but also builds trust with your customers.
Business registration establishes your official business identity. Additionally, obtaining an Australian Business Number (ABN) is a must when operating legally in Australia.
The registration process varies depending on your business structure. For example, you may choose to operate as a sole trader, a partnership, or a company. If choosing a company structure, remember that you’ll also need to secure an Australian Company Number (ACN) and establish a Company Constitution in line with the Corporations Act 2001. For further insight into selecting the ideal structure, check our discussion on whether business structure matters.
Your business identity is not only represented by your ABN and ACN, but also by your registered business name-which you can secure via resources like our Business Name Registration guide.
If you’re uncertain about which structure is best for your medicinal cannabis venture, reach out to our team of expert lawyers for personalised advice.
What Documents Do I Need For A Medicinal Cannabis Business?
Operating a medicinal cannabis business involves interacting with a variety of suppliers, including many from overseas. It’s essential to document your arrangements meticulously to avoid disputes and maintain compliance.
If you’re hiring staff to manufacture or cultivate medicinal cannabis, you’ll need robust Employment Contracts outlining their roles, remuneration, and entitlements. Clear, written agreements protect both you and your employees.
It’s also wise to have a comprehensive Supply Agreement with your vendors, detailing important aspects such as quality benchmarks, shipping schedules, payment terms, and liability. This becomes especially critical if you are importing medicinal cannabis from overseas.
For a broader overview of the key legal documents required when running a business in Australia, please refer to our Legal Documents for Business guide.
Importing Medicinal Cannabis From Overseas?
If you’re working with overseas suppliers, your Supply Agreement needs to account for international trade intricacies. It should include provisions about delivery timelines, potential shipping delays, warranties per Australian Consumer Law, and clear liability protections.
In addition, an Import/Export Agreement is essential for outlining key aspects such as:
- Payment terms
- Duration of the supply relationship
- Liability and risk allocation
- Termination rights
- Delivery and shipping details
It’s also crucial to address scenarios where a supplier fails to meet their obligations. In such cases, relying on clearly drafted Force Majeure clauses can provide necessary relief and clarity.
Furthermore, defining which party is responsible for a faulty or non-compliant product is vital, particularly under product liability laws. For more insights on managing imports, our Step-by-Step Guide to Importing Goods into Australia is a valuable resource.
Make Sure Your Contracts Are Internationally Enforceable
When dealing with overseas parties, one of the most critical elements is ensuring that your contracts are enforceable internationally. Typically, this involves including an arbitration clause to set out a dispute resolution process. If such a clause is absent, you must clearly specify the governing law-which country’s laws apply-and identify the appropriate jurisdiction.
It’s always advisable to consult a contract lawyer when drafting an internationally enforceable contract. This facilitates smooth business operations across borders and minimises the risk of legal disputes.
What You Need To Know About White Labelling
It’s common for medicinal cannabis businesses to import products from countries like Canada and then apply their own branding once the products arrive in Australia. Given that the local market is still developing, establishing your own brand identity is essential.
White labelling allows you to sell products under your own brand while relying on a third party to produce them. However, as with all business arrangements, this should be formalised in writing. A comprehensive White Label Agreement will detail important terms related to packaging, handling of defects, IP protection, and liability provisions.
How Should I Advertise Medicinal Cannabis?
When advertising medicinal cannabis products to individuals and businesses, it’s imperative to comply with the Australian Consumer Law. Your advertising practices must be transparent and should not mislead or deceive consumers. This ensures consumer trust and prevents exposure to hefty fines and penalties.
Businesses must also be prepared to offer refunds or exchanges if a product is found to be faulty, reinforcing the importance of adhering to these legal advertising standards.
Looking ahead, digital marketing and telehealth integrations are increasingly influencing the way medicinal cannabis is advertised and sold. Leveraging robust online tools-as covered in our guide on signing contracts and online business privacy best practices-can help ensure your marketing efforts remain compliant in a rapidly evolving regulatory landscape.
Key Takeaways
If you’re starting a medicinal cannabis business in Australia-whether it involves manufacturing, cultivation, or importing-there are numerous legal and operational considerations to address in 2025.
From securing the appropriate licences with the ODC and registering your business with an ABN/ACN, to drafting effective contracts with suppliers and employees, every step is crucial. Staying informed with the latest legal updates and leveraging expert legal advice can help you dodge potential pitfalls.
For comprehensive legal support, check out our Medicinal Cannabis Lawyers package or reach out for a free, no-obligations consultation. Call us at 1800 730 617 or email team@sprintlaw.com.au to chat about your options.
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