By Matt Hansen, Partner and Bianca Lopez, Solicitor |

 3 June 2024

The Therapeutic Goods Administration (TGA) commenced proceedings in the Federal Court of Australia against Montu Group Pty Ltd, its subsidiary Alternaleaf Pty Ltd and their common director Mr Christopher Strauch, in April 2024.

Alternaleaf is a fully online medical clinic that provides ‘holistic health’ services, including connecting patients with online doctors and nurses for access to medicinal cannabis.

In its claims, the TGA alleged that Montu and Alternaleaf published unlawful advertising of medicinal cannabis across their websites and social media. The TGA has also come after Mr Strauch personally, alleging that Mr Strauch aided, abetted, counselled or produced the alleged contraventions in Montu and Alternaleaf’s advertising.

This action brings into sharp focus the strict rules and restrictions surrounding the advertising of medicinal cannabis. Although many entrepreneurs are keen to enter the market, it remains a tightly controlled substance and its advertising to the general public remains prohibited.

Even indirect advertising of medicinal cannabis is unlawful, a lesson the Dolphins NRL team recently learned following its controversial sponsorship deal with Alternaleaf which threatened to land the team, as well as broadcasters, in hot water unless they agreed to cover up the logo of Alternaleaf on its team uniforms and grounds.

So what is actually the issue?

The issue that arose is not with Alternaleaf and Montu being providers of medicinal cannabis as a therapeutic good. Rather, the TGA’s concern related to Alternaleaf and Montu promoting the use of medicinal cannabis for the treatment of serious diseases, conditions and disorders directly to consumers.

Specifically, the TGA claimed that Montu’s and Alternaleaf’s advertisements:

  • implied that medicinal cannabis had been approved by the TGA;
  • represented that medicinal cannabis was safe or without harm or side effects;
  • suggested that medical cannabis was “magical or miraculous”; and
  • included endorsements from current or former health professionals as to the efficacy of medical cannabis.

The above advertising representations are known as restricted or prohibited representations and are not permitted in advertising for therapeutic goods, unless approved by the TGA. According to the TGA, Montu and Alternaleaf were provided numerous warnings with respect to the non-compliant advertising, however these were seemingly ignored.

For the claims made against Mr Strauch personally, the TGA has alleged that Mr Strauch is personally liable for the advertising contraventions of the TGA by Montu and Alternaleaf. That is, Mr Strauch should also be held responsible for the contraventions of the TGA as he was directly involved in producing the non-compliant advertising.

In its claims, the TGA is seeking declarations and pecuniary penalties against Montu, Alternaleaf and Mr Strauch. The TGA is also seeking injunctions to prohibit any future unlawful advertising of medicinal cannabis by Montu, Alternaleaf and Mr Strauch, as well as injunctions to stop the current promotion of medicinal cannabis, such as the promotion on the Alternaleaf website. 

The current legal framework

The TGA is the medicine and therapeutic regulatory agency of the Australian Government and is responsible for administering the therapeutic goods regulations in Australia, including the Therapeutic Goods Act 1989 (Cth) (the “Act”) and the Therapeutic Goods (Therapeutic Goods Advertising Code) Instrument 2021 (the “Advertising Code”). This includes regulating the supply, import, export, manufacturing and advertising of therapeutic goods.

There are specific provisions under the Act and the Advertising Code with respect to the advertising prescription medication and medicinal cannabis. Section 42 of the Act applies to advertising of all therapeutic goods and notes that advertising medicinal cannabis regulated as prescription medicines to the public is prohibited under the Act. Similarly, advertising of therapeutic goods to the public that does not comply with the Advertising Code is also prohibited.

The TGA has stated specifically that the rules for advertising of therapeutic goods apply to promotion of medicinal cannabis across all media types visible to the public. This includes web pages, social media and targeted sponsored posts. The basis for the strict regulation of advertising directly to consumers is based on the TGA’s position that advertising prescription-only medicines directly to consumers could create an inappropriate demand for these medicines and lead to unnecessary or harmful prescribing. Instead, companies should be directing consumers to consult with medical professionals for correct and appropriate treatment, rather than pushing prescription products to the consumer. 

Where to from here?

It is important to note that the main issues here relate to advertising and promoting certain restricted therapeutic goods directly to consumers. That is, companies can promote their holistic health services and ability to prescribe medicinal cannabis if deemed appropriate following medical consultations, and this will not be in breach of the Act or the Advertising Code. However, companies cannot advertise medicinal cannabis as a product or represent the benefits of medicinal cannabis directly to consumers. This type of advertising is not permitted and is a breach of the Act and the Advertising Code.

We have seen the TGA take a strong interest in this area. Over the past two years, 119 infringement notices have been issued by the TGA to medicinal cannabis companies, totalling over $1.4 million in fines, highlighting that enforcement action to deter unlawful advertising of medicinal cannabis is a priority.

To further assist companies with compliance, in December 2023 the TGA published a guidance document that sets out the guidelines for advertising medicinal cannabis. Amongst other things, the guidance document, available here, includes relevant information to assist companies with ensuring their advertising material is not unlawful. This guidance sets out the requirements for promoting their goods and services, and also clarifies the application of the Act and Advertising Code in relation to medicinal cannabis advertising.

Given the keen interest the TGA has taken in this area and the release of the guidelines so that companies can ensure their marketing materials are compliant, we can assume that the TGA will continue to monitor and pursue companies for non-compliant advertising.

 Contact us

We understand that advertising and promoting your goods and services is fundamental for brands and companies. However, as noted above this area is highly regulated and can be tricky to navigate. If you are working within the holistic health and/or medicinal cannabis space and would like further information or advice on promoting therapeutic goods to consumers, please contact one of our experts below.

Matt Hansen Bianca Lopez
02 8935 8803 03 9907 4304
[email protected] [email protected]

 

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