Source: Radio New Zealand
Southern Medicinal has converted the old Mataura paper mill into a medicinal cannabis and hemp growing, testing and processing facility. Supplied / Southern Medicinal
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, a number of 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).
Harvesting cannabis flowers at Puro’s Kēkerengū farm on the Kaikōura Coast. SUPPLIED/PURO NZ
Medicinal Cannabis Council executive director Sally King said under current rules, because most producers did not hold that certification, they could only put out raw bud ingredients, not processed products like 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,” she said.
“That’s where the real growth is.”
She said medicinal cannabis, as for many other primary industries, struggled to keep value-add 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.”
King said 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.”
Cannabis flower at Rua Bioscience’s facility in Mangaoporo, Te Tairāwhiti. Rua Bioscience
Scale advantage for international manufacturers – Rua Bioscience
NZX-listed company, Rua Bioscience of Ruatoria sold its GMP factory in Tairāwhiti in 2023 to instead focus on exports, due in part to challenges associated with GMP manufacturing.
This week, it celebrated gaining new market access for its East Coast-sourced live cultivar clones into key market Canada for further processing there.
Aotearoa largely imported medicinal cannabis flower products, led by Canada, which built a multi-billion dollar local industry since legalising recreational use in 2018.
Chief executive Paul Naske said the extremely high standards of GMP should only be required 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, focussing 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, by simple fact because it’s costly and large offshore manufacturers have a greater scale.”
Industry hopes for further regulatory change
Naske recently inked a letter with suggested regulation changes to the Minister for Regulation, 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.
Regulation Minister David Seymour visiting the Hemp NZ Food Factory in Ashburton in December last year. RNZ / Nate McKinnon
Seymour said he referred the letter on to the Ministry of Health as 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 [https://www.rnz.co.nz/news/national/497357/medicinal-cannabis-industry-growing-as-regulation-overhaul-given-green-light
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.”
There were 26 applications that took 22 working days to process in 2022/23.
Then in 2024/25, the 65 applications took 10 working days to process.
Seymour said Medsafe’s export licensing regime review last year meant applications became electronic as opposed to paper copies.
He said 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.”
Early season growth at Puro’s Kēkerengū farm on the Kaikōura Coast. SUPPLIED/PURO NZ
A Medsafe spokesperson said it was committed to issuing export and import licences promptly, and was considering further feedback from industry on regulations.
“We have to strike the right balance between allowing industry to operate efficiently while also ensuring New Zealanders are accessing quality products,” it said in a statement.
In 2024, following feedback from the industry, it removed the requirement for exports to meet New Zealand’s minimum quality standards and removed duplicate requirements for assessing and verifying the 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.”
New grower collective created
Meanwhile, company 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,” she said. “What we are seeing now is the opportunity to build a more coordinated, 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, that 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.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
