In brief

In the last 2 years, the Therapeutic Goods Administration (TGA) has issued more than 165 infringement notices (totalling $2.3m in penalties) and commenced 2 civil penalty proceedings for unlawful advertising of medicinal cannabis; the most recent high profile proceedings being those brought against Alternaleaf Pty Ltd (Alternaleaf). This regulatory activity has brought the restrictions on advertising medicines (in particular, medicinal cannabis) into sharp relief.

Alternaleaf proceedings

Alternaleaf operates an ‘online medical clinic’ offering ‘alternative solutions’ for therapeutic relief following an online consultation. ‘Alternative solutions’ include prescribing and supplying medicinal cannabis to customers. Most medicinal cannabis products are not registered on the ARTG, but rather are unapproved therapeutic goods. Currently the pathways for supplying medicinal cannabis are either:

(a) as a product that is registered on the Australian Register of Therapeutic Goods (ARTG) as a prescription medicine; or

(b) more commonly, through special access pathways.

None of these supply pathways allow for advertising the products (because they are either prescription only or unapproved therapeutic goods).

On Thursday 16 April 2024, the TGA brought proceedings against Alternaleaf, its parent company Montu Group Ltd, and Mr Strauch (the sole director of Alternaleaf and one of the directors of Montu Group Ltd) for alleged unlawful advertising of therapeutic goods. As at the date of this article, the proceedings are still before the court.

The TGA alleges that, from at least January 2022 to April 2024, Alternaleaf unlawfully advertised medicinal cannabis on its website and social media accounts, and a website for medical cannabis awareness week. The TGA alleges that the ‘advertisements’ contained the following prohibited elements:

• advertisement of medicinal cannabis which is a ‘prescription-only’ medicine and an unapproved medicine;
• prohibited representations (being references to the treatment or cure certain diseases such as mental illnesses);
• restricted representations (being references to serious diseases, conditions, ailments or defects (not including pregnancy) that are accepted as requiring medical diagnosis or treatment or supervision by a health practitioner such as epilepsy, autism, ADHD and chronic pain) for which the prior approval of the TGA was not obtained;
• the implication that the medical cannabis supplied by Alternaleaf was recommended or approved by the TGA;
• the implication that using medicinal cannabis is safe, without harm or side effects, and ‘miraculous’ in its effects; and
• endorsements by health practitioners.

The TGA is seeking declarations, pecuniary penalties and injunctions (including interim injunctions) concerning Alternaleaf’s ongoing ‘advertisements’.

The TGA alleges that Alternaleaf’s promotion of medicinal cannabis products poses a risk to public health and safety for the following reasons:

• the lack of extensive research and/or clinical trials conducted on the products to establish their safety, quality and efficacy, particularly for all of the ailments for which its use was being advocated;
• the risk that consumers will use medicinal cannabis instead of conventional treatments and suffer adverse medical outcomes;
• the potential for acute and long-term side effects of, and dependence on, the products;
• the growth in single-issue and/or single-medicine online prescribing models of care that can result in fragmented healthcare which may lead to inadequate transfers of information and unclear treating responsibilities between treating practitioners to the detriment of the consumer/patient; and
• the risks of patients obtaining the products for use recreationally, rather than therapeutically.

Dolphins partnership

In an interesting aside to the TGA proceedings, the Queensland Dolphins (an NRL team) had entered into a sponsorship arrangement with Alternaleaf that included the Alternaleaf logo on the team jerseys, and signs around the stadium. Notably, the Alternaleaf logo that was placed on the team jersey did not contain any pictorial representation of medicinal cannabis (i.e. it solely consists of the text ‘Alternaleaf’).

Following the announcement of the TGA proceedings on Thursday 16 April 2024, and notwithstanding the fact that the Dolphins partnership was not referred to in the court filing, the Dolphins taped over the prominently placed Alternaleaf logo on their team jersey for their game on the Friday night. By the Saturday, any mention of the partnership was removed from the Dolphins website.

On 10 May 2024, the TGA announced that the Dolphins had agreed to remove all Alternaleaf branding from all materials visible to the public including jerseys and stadium signs. Clearly, from the perspective of the TGA, placement of the Alternaleaf logo (albeit limited to text) on the Dolphins’ team jersey and stadium signs was considered by the TGA to be ‘advertising’ of medicinal cannabis for the purposes of the Therapeutic Goods Act (Cth) (TG Act).

Neither Alternaleaf nor the Dolphins have publicly discussed the implications of the regulatory action on their partnership agreement.

Implications of the proceedings

The proceedings will not come as a surprise to those familiar with the strict prohibitions on advertising of prescription only and unapproved therapeutic goods. The TGA’s compliance priorities of 2023/24 included the ‘deterrence and disruption of unlawful advertising of medicinal cannabis’. Most recently, News Life Media was fined $56,340 for alleged unlawful advertising of medicinal cannabis on their website ‘Body + Soul’.

Historically, the TGA has rarely moved to prosecution unless there is a particularly egregious breach. However, in the Alternaleaf proceedings, the TGA has stated that it communicated with Alternaleaf between August 2020 and June 2023 in connection with the platform, social media accounts and website. It is apparent that the proceedings are a result of the failure of Alternaleaf to take appropriate action to ensure that its advertising complies with the therapeutic goods laws. In its statement in relation to the proceedings, the TGA also flagged the deterrent factor to the decision to commence proceedings:

“if the contravening advertising continues, it may cause other entities and individuals who conduct business in the market of prescribing or enabling the prescription of medical cannabis to advertise medicinal cannabis in contravention of the Act, leading to the adverse outcomes …“