Drugs are regulated in Australia on both the state and federal level. Where they conflict, state law supersedes federal law. If a substance is controlled by federal law and is not specifically dealt with in state law, then the federal law applies. However, states may pass legislation that nullifies federal legislation. For example, a state may pass hemp legislation that nullifies the federal prohibition on hemp. Drug laws may therefore vary dramatically from state to state.

The federal schedule is the Standard for the Uniform Scheduling of Drugs and Poisons (SUSDP), which is administered by the Therapeutic Goods Administration (TGA). The SUSDP is intended to be a guide for the states and technically has no power in itself. However, over the last few years a shift from state-based drug law to federal drug law appears to be underway, and the SUSDP is slowly becoming a de facto schedule. Several states now write in their schedules "see equivalent federal schedule", though they frequently set their own penalty levels.

In recent years it has become increasingly common for federal drug law to be implemented in the Criminal Code Act. The CCA has provisions regarding possession and import of controlled substances. It places controls on precursors and includes one of the most broad-ranging analogs clauses in the world.