Aussie hemp growers producing CBD for the black market, claims cannabis industry executive

Hemp growers in New South Wales are allegedly producing CBD products for a thriving black market, according to Elixinol Wellness non-executive director Paul Benhaim.

Last week, ABC’s Landline program featured a segment where he alleged licensed hemp growers are breaking the law by producing medicinal cannabis products for the ‘booming wellness market’ in Australia [1].

“I’m aware of a lot of people who have made a significant amount of money from selling CBD that they’re producing from industrial hemp grown in Australia.” He said.

Accessing CBD oil through the medical pathway can often be expensive and complex, with many GP’s still unwilling to consider it a treatment option.

Findings of a recent survey of 2233 chronic pain sufferers found that 38.8 per cent had discussed medicinal cannabis with their GP; however, many faced reluctance, with doctors citing reasons such as cost and lack of knowledge about access pathways as barriers to patient access [2].

Meanwhile, many people were excited to learn that in February this year the Therapeutic Goods Administration (TGA) approved the sale of low-dose CBD as an over-the-counter medicine in pharmacies. Yet, consumers still don’t have access to any approved products via this channel and are unlikely to do so until 2023 due to lengthy approval processes.

What do people do when something is cost-prohibitive and legal access options are limited? Naturally, they seek out alternatives.

Even though medical cannabis prescriptions have more than doubled to 10,755 in the last year [3], Mr Benhaim has estimated the Australian black market is about 10-times larger than the legal market.

“Illegally, there’s maybe 100,000 people consuming CBD a month, maybe a lot more as well.”

In all honesty, it’s unsurprising that the black and/or green market is growing given the tight regulations and restrictions and an overall medical apathy directed towards cannabis medicine.

While it might seem like a good option to source CBD from the black market, it doesn’t come with risk. We’ve written an entire article discussing the legal medical pathway and the green/black market options, you can check it out here.

According to Craig Cochran, a Brisbane-based medical cannabis producer, people take a significant risk by purchasing something that the TGA has not approved.

“They don’t know what’s in it, they don’t know how it’s grown, they don’t know if it’s got mould, they don’t know if it’s got pesticides, heavy metals — the list just goes on,” Mr Cochran said.

While there’s truth to what he says and consumers should be cautious, it’s also fair to point out that there are many reputable green and black-market operators who are sourcing hemp from reputable suppliers and providing independent lab reports to ensure absolute transparency.

I’ve heard from many people who have a prescription for cannabis and still don’t know anything about the medicine they are taking because their doctor either hasn’t informed them or doesn’t know themselves.

Patients aren’t aware if they are consuming a full-spectrum, broad-spectrum or isolate product. They don’t know whether the cannabis has been grown organically, they don’t know how the product has been extracted and manufactured, and lab reports don’t even enter the equation.

So while there can be a lack of knowledge regarding black market products, the same can be said for the medical market to a certain extent.

Mr Benhaim said Elixinol Wellness wants to be part of the booming CBD market in Australia but would have to compete with illegally produced products.

Elixinol Wellness has two Australian subsidiaries: Hemp Foods Australia and Nunyara. Last year Hemp Foods Australia was sold to a Chinese buyer for $500,000, and Nunyara sold their Nothern NSW farmland and scrapped plans to apply for an Australian medical cannabis licence [4].

So, with plans to break into the medicinal cannabis market, it begs the question, where will Elixinol be sourcing their hemp from? Will they support the Australian cannabis industry or import it the same way that green and black-market suppliers do?

We’ll be keenly watching this space to see how things shape up.