Regulations passed today will allow New Zealand businesses to manufacture and distribute medicinal cannabis products.

The law, which comes into effect on April 1, 2020, will mark the beginning of the local medicinal cannabis market.

Until now, New Zealand's cannabis businesses have been limited to research and have not been permitted to sell or export the products they grow or produce.

"There is huge international interest in the potential of medicinal cannabis," said Minister of Health Dr David Clark.

"These regulations mean New Zealand companies will be well placed to manufacture for both the local and international market."

Parker said he expected the first medicinal cannabis licences to be issued by mid-2020.

"There is already considerable expertise in this area with 20 companies currently licensed to grow cannabis for research purposes and another 238 growing industrial hemp. It's expected that at least some of these companies will apply for licences for medicinal cannabis."

Parker noted that while other markets have shown it can take as long as two years for product to become available after regulatory changes, he expects things to move faster here - partly due to the research that has already occurred here.

"People with prescriptions for medicinal cannabis products can currently fill prescriptions with products sourced from overseas, which are often costly," Clark said.

"I'm confident increased competition from local manufacturers will drive prices down over time. However, sadly we know some people won't be able to wait for domestic manufacturers to begin production.

"So as a compassionate measure, people eligible to receive palliation will continue to be exempt from prosecution for illicit cannabis. That will be reviewed once the scheme has been in operation and more quality products become available."

Cost of licences

The Government will establish an agency dedicated to carrying out the requirements set out under the new legislation. There will be a number of licences

Firstly, businesses interested in growing, harvesting, drying, storing or possessing cannabis will have to apply for a licence. There will be no fee for this licence.

Businesses that intend to manufacture or sell and distribute cannabis will have to apply for a licence to deal in controlled drugs, which will cost $966 (plus GST) per site per annum.

There will also be an additional licence required to import product, which will cost $194.22 (plus GST) per consignment. The same fee will also apply to exports.

The most expensive licence that businesses can apply for is the licence to manufacture medicines. This will set the applicant back $13,750 and apply specifically to organisations manufacturing medicinal cannabis products or active pharmaceutical ingredients (API) for therapeutic use.