Budding cannabis producers can now apply for a licence to grow the crop legally in Australia, for medicinal use only.

The Narcotic Drugs Amendment Act 2016, which came into effect on Sunday, allows businesses to apply for a licence to cultivate cannabis or manufacture cannabis products for medicinal purposes, or to conduct related research.

Medicinal cannabis: Health Minister Sussan Ley. Credit:Paul Jeffers

Health Minister Minister Sussan Ley said the changes would give patients and doctors access to a safe, reliable and legal source of cannabis for medicinal use.

"Until now, it has been difficult for patients to access medicinal cannabis products from overseas sources," Ms Ley said in a statement on Sunday.