LGP, MGC Pharma fined for alleged unlawful advertising of medicinal cannabis products

Two listed medicinal cannabis companies have been hit with 51 infringement notices over the alleged unlawful advertising of products online, leading to cumulative fines totalling $679,920.

Of the two companies, Little Green Pharma (ASX: LGP) was slugged with the heaviest penalty of $372,960 stemming from 28 infringement notices, while MGC Pharmaceuticals (ASX: MXC) has been ordered to pay $306,960 in relation to 23 notices from the Therapeutic Goods Administration (TGA).

In an ASX statement, LGP says the fines relate to the promotion of its medicinal cannabis products online and on certain social media channels, which the watchdog alleges breaches the TGA Act.

LGP says that given the nature and value of the penalty, it will be considering its options and may appeal the decision.

However, the infringement notices appear to have been welcomed more generally by LGP - one of Australia’s top 20 cannabis companies - which hopes the action taken by the TGA will lead to greater compliance from players in the sector.

“LGP believes the infringement notices were issued as part of a wider compliance campaign by the TGA focusing on medicinal cannabis companies in Australia, with another two significant Australian cannabis sponsors also receiving infringement notices for contraventions of advertising laws,” says LGP.

“LGP expects the infringement notices issued by the TGA will lead to greater compliance throughout the medicinal cannabis industry in Australia with the TGA requirement that unregistered medicines be advertised exclusively to health professionals as long as those advertisements are not accessible to the public.”

The 28 notices, each valued at $13,320, include:

• Nine notices relating to one page on the LGP website which referenced cannabis and provided eight links to replacement CMIs (being the Consumer Medicines Information leaflet that contains information on the safe and effective use of a particular medicine) with the name of the product within the link
• 10 infringement notices for replicating the SAS B data and conditions from the TGA website, and then hash-tagging those medical indications and referencing a further medical indication on two social media posts
• Seven infringement notices concerning references to cannabis or cannabis medicines on two social media posts
• Two infringement notices for social media posts by patients naming LGP medicinal cannabis products on one social media platform.

“The infringement notices were issued after recent consultations between the TGA and LGP concerning the company’s website and social media channels, following which LGP immediately removed the relevant content,” says LGP.

“All rectification measures have now been undertaken by LGP in respect of the matters raised by the TGA. Given the nature and value of the penalty, LGP will review its options and is considering an appeal.

“LGP is undertaking an extensive review of all of its communications materials and practices to ensure strict adherence with TGA and other regulatory requirements moving forward.”

MGC - also one of Australia's top listed companies in the cannabis space - says it has cooperated fully with the TGA in the removal of all posts of concern and in editing its website.

"MGC Pharma has cooperated fully with the TGA to remedy the issues raised, including removing all posts of concern from its social media channels, some of which were third-party posts, and placing the company’s website into maintenance," MGC says.

"The website will be live again in November following a rebranding exercise, with new internal guidelines implemented to prevent a repeat occurrence."

Shares in LGP are down 1.92 per cent to $0.26 per share at 11.51am AEST. MGC's share price has remained unchanged at 1.5c following an update of this story.