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The Cannabis Legislation and Control Bill 2020

07 July 2020 - By Oliver Fredrickson

On 1 May 2020, the final Friday of Alert Level 3, the Beehive released the complete and final version of the Cannabis Legislation and Control Bill 2020 (the bill). The bill will be voted on at this year’s General Election, with the two options being:

Yes, I support the proposed Cannabis Legalisation and Control Bill.

No, I do not support the proposed Cannabis Legalisation and Control Bill.

Purpose

The overarching objective of the bill is to reduce the harms associated with cannabis use. To this end, the bill will provide a regulatory framework to legalise and control the production, possession, and use of cannabis in New Zealand. This will allow the government to effectively take control of the cannabis market “from seed to sale”.

Cannabis Regulatory Authority

The bill creates the Cannabis Regulatory Authority. The Authority would oversee regulation of the supply and use of cannabis in New Zealand in a way that –

Cannabis leaf

  1. promotes the well-being of New Zealanders; and
  2. reduces the multiple harms associated with cannabis use; and
  3. reduces the overall use of cannabis over time.

The primary functions of the Authority will include:

  1. licensing and authorising activities in the cannabis supply chain;
  2. setting limits on the allowable levels of THC in cannabis products;
  3. regulating cannabis production and marketing;
  4. administering and collecting excise taxes, levies, and fees; and
  5. conducting public education campaigns to raise public awareness of the harms associated with cannabis use.

Importantly, the Authority must also operate in a way that allows it to develop meaningful relationships with iwi and Māori representatives. This is particularly significant as Māori communities are the most disproportionately affected by cannabis-related harms and convictions under the present model.

Who can do what?

The bill enables all persons aged 20 or over to grow, purchase, and consume cannabis under certain specified conditions.

Growing

Any person over the age of 20 will be able grow up to two cannabis plants, with a maximum of four plants grown on a single property. A cannabis plant may only be grown if it is out of public sight or in an area that is not accessible from any public area. If an individual fails to comply with these requirements, they will face an infringement fee of $500 or a fine imposed by the court of up to $1,000.

Products available

Cannabis products will only be available at physical stores. The bill also places a number of controls on what products may be sold and how they may be supplied. First, there will be a complete ban on advertising for cannabis products. The Authority will also develop packaging requirements that discourage cannabis consumption, such as plain packaging and additional health warnings. Further, to help consumers make informed decisions, all cannabis product labels will have to show the amount of THC (tetrahydrocannabinol), CBD (cannabidiol), and how the product compares to the daily purchase limit. The Authority will also set a potency limit of THC that no product may exceed.

Cannabis edibles, a concern already raised by members of the Opposition, would be required to meet additional requirements. Edibles will be restricted to baked products that do not require refrigeration or heating and will be banned if they are found to appeal to children or young people.

Finally, certain cannabis products will remain prohibited, for example: cannabis beverages, products designed to increase the psychoactive or addictive effects of cannabis, and products that involve ways of consuming cannabis that are higher risk, including injectables or suppositories.

Purchasing and Possessing

The bill sets the threshold for purchase and public possession at 14 grams of dried cannabis (or its equivalent: 70 grams of fresh cannabis, 14 cannabis seeds, 210 grams of cannabis edibles, 980 grams of liquids, or 3.5 grams of concentrates).

Any person over the age of 20 may purchase up to 14 grams of dried cannabis (or its equivalent) per day from a licenced cannabis provider and also possess up to 14 grams of dried cannabis (or its equivalent) in public. This threshold has already proven controversial. However, as Iain Lees-Galloway MP has pointed out, there is no maximum amount of alcohol that an individual may purchase at any one time. Simply because an individual will be legally entitled to purchase 14 grams of cannabis per day, does not mean they will actually purchase (much less consume) this amount. For reference, the maximum amount is 30 grams in Canada, 28 grams in Washington State, and 28 grams in Colorado.

A breach of the purchasing or possession regulations will result in an infringement offence, with fines ranging from $200 to $1,000. However, any person who sells or offers to sell cannabis without holding a licence is liable to two years’ imprisonment or a fine not exceeding $100,000. This hefty punishment illustrates the government’s strong desire to entirely eradicate the illicit market for cannabis.

An interesting but necessary part of the bill relates to the “social sharing” of cannabis. A person may gift, share, or supply up to 14 grams of cannabis with another person over the age of 20, provided they do not do so for a pecuniary advantage.

Consumption

Public consumption of cannabis will not be permitted. A person may only consume cannabis at a private residence or a premise that holds a “Consumption Premises” licence. These premises will provide a space for the on-site consumption of cannabis products and will operate very similarly to bars currently. Entrance will be limited to individuals over the age of 20 and each premises will be required to provide conventional food and drink and ensure that customers follow safe practice. Smoking or vaping cannabis indoors will also remain prohibited.

The Money Side

In the current illicit market, growers are forced to operate small scale, indoor hydroponic facilities which have high per-unit costs and a high carbon footprint. If cannabis is legalised, outdoor growing, using natural light and rain, can reduce both cost and carbon footprint. The government anticipates that these reduced costs will allow regulated cannabis distributers to drive illegal growers and suppliers out of the market.

The New Zealand Institute of Economic Research has prepared a comprehensive discussion paper analysing the projected economic impacts of cannabis legalisation. Most notably, it estimated that with a 25% excise tax and GST attached, the cannabis industry could raise about $490 million per year in annual revenue. This revenue will be used to directly fund services that will assist in reducing the harm caused by cannabis use. This increased revenue would be further bolstered by the almost $200 million that could be saved by diverting Police resources away from cannabis enforcement.


Oliver Fredrickson recently completed an LLB(Hons)/BCom at Victoria University of Wellington and works as a Clerk to the Chief District Court Judge Heemi Taumaunu. He can be contacted at  oliver.fredrickson@justice.govt.nz

Last updated on the 7th July 2020