The New Zealand cannabis industry is stepping up calls to hold a review into the quality standards demanded by health authorities as it emerged one company is already in financial strife.
MedGreen Pharmaceutical, which formed in 2016, went into voluntary administration on Monday, with accountants from insolvency specialists Khov Jones investigating whether the business can be saved.
It is unclear if the move by MedGreen directors to turn to administrators is partially related to the stringent standards that must now be met by cannabis firms. But fears are mounting that others will also begin to struggle unless the Ministry of Health rethinks its hardline approach and eases the approval pathway.
New Zealand’s requirements are widely regarded as the strictest in the world.
Cannabiz has approached MedGreen and Khov Jones for comment.
The plight of MedGreen, a member of the New Zealand Medicinal Cannabis Council (NZMCC) and one of the first movers in the industry, will resonate with competitors, with some firms now generating zero revenue after being forced to shelve products that were previously available to patients.
The government had twice extended the transition period for companies to hit the minimum quality standard (MQS) but refused a third extension beyond October 1.
So far, only two companies have successfully had products approved by the government’s Medicinal Cannabis Agency (MCA). Tilray had four oral solutions verified between March 5 and April 10, with New Zealand operation Helius Therapeutics receiving the all clear on Monday for two oils.