EXPLANATORY STATEMENT
Narcotic Drugs (Licence Charges) Act 2016
Narcotic Drugs (Licence Charges) Amendment (Charge Amounts) Regulations 2025
The Narcotic Drugs (Licence Charges) Amendment (Charge Amounts) Regulations 2025 (the Regulations) increase the charges prescribed by the Narcotic Drugs (Licence Charges) Regulation 2016 (the Charges Regulation), in accordance with annual indexation, to support recovery of the costs of administering the medicinal cannabis regulatory scheme under the Narcotic Drugs Act 1967 (the ND Act).
The Narcotic Drugs (Licence Charges) Act 2016 (the Act) imposes charges on medicinal cannabis licences that are granted under the ND Act, and which are in force at a specified time. Charges are payable by the holder of the licence.
The ND Act gives effect to certain of Australia’s obligations under the Single Convention on Narcotic Drugs, 1961, as in force from time to time. Among other things, the ND Act establishes a licensing and permit scheme for the cultivation and production of cannabis plants, cannabis and cannabis resin, and the manufacture of cannabis drugs, for medicinal and scientific purposes (the Scheme). The Office of Drug Control (the ODC), which is part of the Department of Health and Aged Care, is responsible for administering the Scheme and the ND Act generally.
Section 9 of the Act provides that the Governor-General may make regulations prescribing matters that are required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act. Section 8 provides that the amount of a charge is the amount prescribed by, or worked out in accordance with a method prescribed by, the regulations.
The Narcotic Drugs (Licence Charges) Amendment (Charge Amounts) Regulations 2025 (the Regulations) amend the Narcotic Drugs (Licence Charges) Regulation 2016 (the Charges Regulation) to increase the prescribed charges by applying annual indexation for the 2025-26 financial year.
Under the Regulations, annual licence charges increase by a minimum of 1.1% and a maximum of 1.7%. The increase to charges has been determined using an indexation formula based on the relevant work effort to administer the medicinal cannabis regulatory scheme and average salary rates for the Department of Health and Aged Care, as provided by the Department of Finance.
Specifically, the Regulations increase the charges that are currently prescribed in the Charges Regulation in relation to:
- licence charges for:
- a commercial medicinal cannabis licence; and
- a non-commercial medicinal cannabis licence;
- routine compliance inspections; and
- verification inspections.
The Regulations complement the Narcotic Drugs Amendment (Fees) Regulations 2025, which update the fees payable in respect of applications for medicinal cannabis licences or medicinal cannabis permits, and related inspections, as well as applications for variations of a medicinal cannabis licence or medicinal cannabis permit, and related inspections.
Details of the Regulations are set out in Attachment A.
The Act specifies no conditions that need to be satisfied before the power to make the Regulations may be exercised.
The Regulations are a legislative instrument for the purposes of the Legislation Act 2003. The Instrument is compatible with human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny Act 2011). A full statement of compatibility is set out in Attachment B.
The Regulations commence on 1 July 2025.
Consultation
The ODC undertook extensive stakeholder consultation during the review of the ODC fees and charges in 2022-23, which led to the introduction of a new activities-based costing model in August 2023. Through this consultation, stakeholders were informed that the new framework would include annual indexation of fees and charges.
In January 2025, the ODC undertook targeted consultation to inform, and invite comment from, the medicinal cannabis industry of the proposed increase in fees and charges due to indexation. The consultation was via a direct mail out to medicinal cannabis licence holders and the industry’s peak bodies. Feedback was received from two licence holders during the consultation process. No concerns were raised regarding the proposed indexation.
Authority: Section 9 of the Narcotic Drugs (Licence Charges) Act 2016
ATTACHMENT A
Details of the Narcotic Drugs (Licence Charges) Amendment (Charge Amounts) Regulations 2025
Section 1 – Name
This section provides that the title of the Regulations is the Narcotic Drugs (Licence Charges) Amendment (Charge Amounts) Regulations 2025.
Section 2 – Commencement
This section provides for the commencement of the Regulations on 1 July 2025.
Section 3 – Authority
This section provides that the Regulations are made under the Narcotic Drugs (Licence Charges) Act 2016 (the Act).
Section 4 – Schedules
This section provides that each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.
Schedule 1 – Amendments
Narcotic Drugs (Licence Charges) Regulation 2016
The Narcotic Drugs (Licence Charges) Regulation 2016 (the Charges Regulation) is made under section 9 of the Act. It prescribes the amounts of charge imposed on a medicinal cannabis licence in a ‘licence year’, as that term is defined in the Charges Regulation.
The Charges Regulation complements the Narcotic Drugs Regulation 2016 (the Principal Regulation), which prescribes fees in respect of the ODC’s administration of the medicinal cannabis regulatory scheme under the Narcotic Drugs Act 1967 (the ND Act).
The Regulations amend the Charges Regulation to increase the charges that are currently prescribed in relation to licence charges for commercial and non-commercial medicinal cannabis licences, and in relation to routine compliance inspections and verification inspections, in accordance with annual indexation. Under the Regulations, annual licence charges increase by 1.7% for the financial year 2025-26.
Specifically, the Regulations increase the charges that are currently prescribed in the Charges Regulation in relation to:
- licence charges for:
- a commercial medicinal cannabis licence; and
- a non-commercial medicinal cannabis permit;
- routine compliance inspections; and
- verification inspections.
Item [1] – Subsections 6(2) and (3)
This item amends subsections 6(2) and (3) of the Charges Regulation to increase the charge payable for a commercial medicinal cannabis licence from $27,830 to $28,310.
Item [2] – Subsection 6A(2)
This item amends subsection 6A(2) of the Charges Regulation to increase the charge payable for an ‘inspection type 1’ from $12,810 to $12,950.
Item [3] – Subsection 6A(3)
This item amends subsection 6A(3) of the Charges Regulation to increase the charge payable for an ‘inspection type 2’ from $4,840 to $4,920.
Item [4] – In the appropriate position in Part 3
This item introduces new section 13 to the Charges Regulation, which provides for the application of the amendments in these Regulations. New section 13 provides that:
- the amendments to section 6, made by the Regulations, apply to licence years that start on or after 1 July 2025; and
- the amendments to section 6A by the Regulations apply to inspections commenced on or after 1 July 2025.
ATTACHMENT B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Narcotic Drugs (Licence Charges) Amendment (Charge Amounts) Regulations 2025
The Narcotic Drugs (Licence Charges) Amendment (Charge Amounts) Regulations 2025 (the Regulations) are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
Section 9 of the Narcotic Drugs (Licence Charges) Act 2016 (the Act) provides that the Governor-General may make regulations prescribing matters that are required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act. Section 8 provides that the amount of a charge is the amount prescribed by, or worked out in accordance with a method prescribed by, the regulations.
The Narcotic Drugs (Licence Charges) Amendment (Charge Amounts) Regulations 2025 (the Regulations) amend the Narcotic Drugs (Licence Charges) Regulation 2016 (the Charges Regulation) to increase the prescribed charges by applying annual indexation for the 2025-26 financial year.
Under the Regulations, annual licence charges increase by a minimum of 1.1% and a maximum of 1.7%. The increase to charges has been determined using an indexation formula based on the relevant work effort to administer the medicinal cannabis regulatory scheme and average salary rates for the Department of Health and Aged Care, as provided by the Department of Finance.
Specifically, the Regulations increase the charges that are currently prescribed in the Charges Regulation in relation to:
- licence charges for:
- a commercial medicinal cannabis licence; and
- a non-commercial medicinal cannabis licence;
- routine compliance inspections; and
- verification inspections.
The Regulations complement the Narcotic Drugs Amendment (Fees) Regulations 2025, which update the fees payable in respect of applications for medicinal cannabis licences or medicinal cannabis permits, and related inspections, as well as applications for variations of a medicinal cannabis licence or medicinal cannabis permit, and related inspections.
Human rights implications
As the Regulations do not introduce any changes to the Charges Regulation other than to implement the changes outlined above, they do not engage any of the applicable rights or freedoms.
Conclusion
The Regulations are compatible with human rights as they do not raise any human rights issues.
Ged Kearney, Assistant Minister for Health and Aged Care