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The Department of Economic Development, Jobs, Transport and Resources has harvested its first crop of medicinal cannabis.
Testing and formulation of a safe treatment for the first patient cohort - children with severe epilepsy - is underway.
Victoria legalised medicinal cannabis in April last year.
“We promised Victorians they would be able to access this life-changing treatment and every day brings us one step closer to delivering on this Australian first commitment,” Minister for Health Jill Hennessy said.
“We have seen time and time again the difference medicinal cannabis can make to the lives of very sick children.”
The Office of Medicinal Cannabis will oversee the testing and processing stages through to manufacturing.
The state government said the product being developed would be the first locally produced medicinal cannabis to be legally available in Australia.
Victorian-based company the Cann Group has been granted the first cannabis research licence under the Narcotic Drugs Act 1967.
A cultivation and manufacturing facility has been built.
In addition to the Office of Medicinal Cannabis, the state government has established an Independent Medical Advisory Committee to advise on the types of medicinal cannabis products that should be approved for use by Victorian patients.
The 2016/17 Victorian Budget included $28.5 million for the creation of the two bodies.
“Every step along the way takes us closer to being able to provide product to Victorians who need it the most,” Minister for Agriculture Jaala Pulford said.
Meanwhile, the federal government authorised “controlled importation” of medicinal cannabis, to assist patients struggling to access the product on prescription due to a shortage of Australian product.
“At present, doctors approved to supply medicinal cannabis products must import the product as local production is only starting to be developed following the passage of legislation to allow domestic production late last year,” a statement on Minister for Health Greg Hunt’s website said.
Approved commercial importers will be able to source medicinal cannabis products from a “reputable supplier overseas” and store them in a “safe, secure warehouse” in Australia.
“Patients who have been prescribed medicinal cannabis by an authorised doctor will be able to source the medication from a company in Australia – rather than on an individual case by case basis from overseas which involves delays in importation,” the statement said.