The push to legalise medical cannabis is gathering pace, with Greens Senator Richard Di Natale, chairman of the cross-party Parliamentary Group for Drug Policy and Law Reform, now finalising a bill that is set to be introduced into Parliament next month.

Supporters of legalised medical cannabis have been buoyed by Prime Minister Tony Abbott's strong public support for the legalisation of the drug for medical use.

"I have no problem with the medical use of cannabis, just as I have no problem with the medical use of opiates," Mr Abbott wrote in a letter to 2GB radio host Alan Jones, dated August 23.

"If a drug is needed for a valid medicinal purpose … and is being administered safely there should be no question of its legality."

Jones, who has been campaigning in support of medical cannabis, read Mr Abbott's letter on air earlier this month.

Senator Di Natale, a former GP, is also pushing for the Therapeutic Goods Administration to create a special category for the drug so that it can be available with a doctor's prescription. The TGA currently lists cannabis as a prohibited substance.

Senator Di Natale said his bill would cover the licensing of cannabis growers, quality control standards and how the drug should be processed and distributed. The regime would mirror the regulation of the cultivation of poppies for use in medical opiates.

Senator Di Natale said he favoured the creation of a new independent statutory authority to regulate the drug, but that the Department of Health could also serve this role.

"I am open to any discussions with the Prime Minister's office to maximise the chance of success," he said.

Medical cannabis can be used to alleviate pain and treat nausea – including for cancer patients undergoing chemotherapy and for people with multiple sclerosis.

Following a campaign on behalf of terminally ill Tamworth man Daniel Haslam, the NSW government announced a clinical trial of medical cannabis earlier this month.

Victorian federal Liberal MP Sharman Stone said: "We can put in place mechanisms to ensure that medical cannabis is properly regulated without leaking into the illicit drug market. It has worked in places such as Canada and Israel.

"I think this has support among many people in the Coalition party room."

Liberal Democrat Senator David Leyonhjelm said he would vote for the legalisation of medical cannabis, but that the drug should also be made legal for recreational use.

"The Greens are very timid on this issue," he said.

"The problem with the legalisation of medical cannabis is you have to have a whole regime established to restrict it to medical use; you have to get TGA approval. Drug companies do not want to invest in clinical trials. It's hugely complex. If you limit it to medical use everyone will be claiming to be sick."

In a statement on its website, the Department of Health says: "For any form of cannabis to be approved for medicinal use in Australia an application needs to be made to the Therapeutic Goods Administration with supporting data to assess its quality, safety and efficacy,"

"The government cannot compel a sponsor to make an application to the TGA and decisions are made independent of ministerial involvement."

The TGA has approved the use of Sativex, a mouth spray derived from cannabis.

A spokesman for Health Minister Peter Dutton did not respond to requests for comment.

Alex Wodak, former director of the Alcohol and Drug Service at Sydney's St Vincent's Hospital, said he supported the creation of an Office of Medicinal Cannabis.

"The political obstacles are diminishing by the minute so tackling the regulatory obstacles are critical," he said.

For any form of cannabis to be approved for medicinal use in Australia an application needs to be made to the Therapeutic Goods Administration with supporting data to assess its quality, safety and efficacy.

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