You need to set the `ellipsoidalMode` to `True`: 

    distance.setEllipsoidalMode(True)

And then you might need to set the ellipsoid over which QGIS will perform calculations, e.g., WGS84:

    distance.setEllipsoid('WGS84')

Now you can measure the distance once again:

    m = distance.measureLine(point1, point2)

Which will give you ~322.475m.