A landmark deal to grow a high-strain medicinal cannabis on Norfolk Island for export to Canada is in jeopardy, with the Australian government reviewing the decision.

Last week, Perth-based AusCann Group Holdings was granted a licence by the Norfolk Island government, a self-governing external Australian territory, to grow a high-grade medicinal strain of cannabis. AusCann intends to export its first crop to Canada by July next year.

However, the granting of the licence came after the Australian government passed legislation to abolish Norfolk’s Island parliament and replace it with a local council, which means the island government is effectively in caretaker mode while its laws are brought in line with Australian ones.

From the end of June, Norfolk Island islanders will be brought under Australia’s taxation and welfare system during a transition period of about one year.

A spokeswoman for the assistant minister for regional development, Jamie Briggs, said the licence to grow medicinal cannabis was now under review by the Australian government, which has the power to overturn the decision.

“It’s not clear if any due diligence has been applied and the decision is inconsistent with established caretaker procedures,” she said.

“The licence was issued ... against a written request that Norfolk Island ministers not make significant commitments or undertakings while they were in effect a caretaker government.”



No information had been provided to the government about what due diligence process was undertaken in granting this licence, she said.

“There are a range of matters that do not appear to have been given consideration, including the Australian government’s clear intention to extend national customs and border security arrangements to Norfolk Island, and whether the licence would remain consistent with New South Wales law,” she said.

The Australian government is not opposed to medical treatments that may be derived from cannabis where clinical evidence is established, the spokeswoman emphasised. She also said moves by Australian governments to examine the approval, prescription and use of legitimate medical treatments were completely separate from the licensing review.

The federal Department of Health has confirmed it has not been consulted on the proposal.

However, the chairman of the AusCann board, Malcolm Washer, said the company had notified the health department of its intentions, and he was confident the Australian government would see the benefits of the deal for Norfolk Island.



“I am not privy to discussions between Briggs and the Norfolk Island government,” he said.

“But this shouldn’t be used as a game of play between two political bodies, the Norfolk Island government and the Australian government, and I’m confident it won’t be.



“There’s no losers in this. Norfolk Island is broke, there are not enough jobs. This would bring employment to Norfolk Island and provide them with a world-class quality industry that is good for the economy.”