Hard News by Russell Brown


The Cannabis Legalisation and Control Bill: pretty good so far

As you're probably aware, the draft bill outlining the proposed legal cannabis regime to be put to a referendum late next year was published yesterday, and has already attracted a flurry of comment. It's notable that a good deal of the comment is about proposals that aren't actually new.

A minimum age of purchase of 20, regulation of potency, restriction of use to private homes and licensed premises, inclusion of harm-reduction messaging, permission for physical but not online retail, recognition of "social sharing", permission for home cultivation, no importation of cannabis products, regulated sale of edibles and concentrates, and a ban on advertising and most marketing – these were all clearly laid out in the Cabinet paper in May.

And yet, of course, it does all seem more material when it is presented in the form of a statute. And in various places, important detail has been added. Home cultivation will be limited to two plants per person and four plants per household. It won't be possible to buy more than 14 grams (that is, half an ounce, or half what is allowed in Canada) from licensed premises in a single day.

That second piece of news has already been the subject of babbling from people who, in good faith or otherwise, seem to think that means consumers will go and buy their maximum allowance every day, at a cost (assuming retail prices are set around those in the current black market) of $150 to $200. Literally no one will do that.

The 14g limit has other elements. Most notably, it's the quantity it will be legal to possess in public. It's also about the right quantity to make physical-retail-only viable. Without access to online sales, people outside urban centres may find themselves some distance from licensed premises. If they can come to town, buy a reasonable stock and take it home, they're far more likely abandon the black market.

Yes, it would be possible to drastically reduce the daily limit. It would also be stupid, unless you actually want your licensed premises to operate like tinny houses.

There's also considerably more detail around restrictions on advertising, notably around licensed premises. Any exemptions are pretty tight. For example:

(b) display inside that retailer’s place of business any notice for the public that—

(i) does no more than indicate, using only printed or written words, the fact that, and the location or locations where, cannabis prod-ucts in general are available for purchase in that place; and

(ii) complies with the regulations:

(c) display the retailer’s name or trade name at the outside of the retailer’s place of business so long as the name is not and does not include either or both of the following:

(i) any word or expression signifying that any cannabis product is available in that place for purchase:

(ii) the trade mark of a cannabis product or the company name of a cannabis product manufacturer.

So a business can make it clear what it sells, but not do any branding around that. Well, okay. The drafters are also keen to curb any offer of cannabis, even on-premises: it can only be provided on request. You could certainly argue that anyone who has chosen to enter R20 licensed premises  has effectively made a request to know about products by doing so, but even inside permitted signage will only be that which:

does no more than identify the cannabis products that are available for purchase in that place and indicate their price

But the bill also appears to require that no customer is allowed to see (let alone, say, smell) any cannabis until they have purchased it and it is being "delivered" (ie: handed) to them. I'm honestly not sure what this is supposed to achieve, or what actual harm would be done by allowing people to see  what they're buying. Perhaps it's an extension of the plain-packaging practice that has been developed around tobacco – but tobacco is an addictive and harmful drug sold in corner shops. I don't think this carries over well to R20 licensed premises.

(Ironically, the bill provides an advertising exception for medicinal cannabis products. It's ironic because Medsafe is currently shopping around a maximal interpretation of Section 29 of the Medicines Act that holds that even mentioning the existence of an unapproved – but still legal and available for prescription – product in virtually any context, including journalism and talking with your neighbour, is "advertising" and therefore illegal. Yes, it is ridiculous.)

The bill also puts some numbers around home cultivation: any person will be allowed to grow two plants for personal use, to a limit of four per household. (Non-expert growers might expect to yield, at most, about 140 grams of cannabis flower per plant.) These limits will be hard to police and you'd expect only the more egregious breaches to be prosecuted. In that context, you might as well set the limits low.

A note at the top of this draft marks it out as a "work in progress" and makes it clear that there are key areas "yet to be developed". Easily the most significant of those key areas is licensing and "market allocation". Part 4 highlights one element of that as a key purpose of the bill:

(b) prioritising social equity outcomes through decisions on market allocation and authorisation requirements:

In other words, this is where non-profits and, if they choose, Māori organisations will have access to the regulated market, via preferential licensing. I'm told that detailed proposals here are still under discussion but will definitely be included in the finalised version of draft bill in March.

So that's small cannabis. What about Big Cannabis? Well, the ban on import of non-medical cannabis products cuts off any prospect of our market being flooded with foreign products. But this line, I suspect, signals something more:

(3) A person may not hold a licence to cultivate cannabis at the same time as they hold a licence to retail cannabis.

I hope this develops into a more general ban on vertical integration: ie, no company will be allowed to operate at more than one tier of the market. That is what Mexico has recently announced – and what Canada signally failed to do. May's Cabinet paper included undertakings about curbing the size (and hence, regulatory and political influence) or cannabis businesses, and this is one good way of doing that.

As keen as I was to see detailed proposals along these lines, I don't think it's a big problem that they're not yet ready for what is only a discussion draft of the law. It just means mre time to lobby for the best approaches.

I would also expect to see more detail on promised potency controls. It's not yet clear whether these would apply to cannabis flower or only to concentrates, which, it appears, would still be permitted at retail. Confusingly, the bill bothers to define concentrates but not to otherwise mention them, apart from acknowledging that they're not the same thing as infusions. I do think the very strongest THC concentrates warrant separate treatment: they can deliver enough of a dose that they are, in effect, a different drug.

I would like to see potency controls also address CBD content. We know a lot now about how CBD mitigates the undesirable and anxiogenic effects of THC, and we know that the most problematic cannabis use relates to very high THC products. I would like to see the idea of more favourable tax treatment for products with a higher CBD ratio explored. No one else has done that, but that doesn't mean it can't be done.

Edibles will be permitted, but will need to be approved on a case-by-case basis by the new Cannabis Regulatory Authority. There are two good reasons for this: it would enforce standardised dosing (in most other jurisdictions, the standard is 10mg of THC per portion) and it would weed out any product potentially attractive to children.

One thing I'm very pleased to see as part of the parameters of the proposed Authority is:

(j) collecting and analysing data and reporting on the dynamics of the supply and demand for, and use of, cannabis in New Zealand, to ensure the regulatory regime is meeting its objectives; and

(k) promoting and supporting research focused on understanding and reporting on cannabis use in New Zealand and informing evidence-based approaches to preventative and harm-reduction activities.

We stand apart from most, if not all, jurisdictions that have legalised in the paucity and poor quality of public health data we have around cannabis use. We will have trouble assessing whether reform is affecting cannabis use in the ways we want if we don't have that data. Interestingly, I asked Andrew Little last month whether the bill would provide for such data gathering and he said it currently didn't, but thanked me for raising it. So perhaps I can claim a score there.

Overall, I'm pretty happy with this draft bill. Like the Cabinet paper that preceded it, it's an unprecedented document for New Zealand. After years of activism, three select committee inquiries, a Law Commision review and any number of fine words, we finally have a detailed picture of what a reform for New Zeaand could look like. That's remarkable.

I don't think every single regulatory detail needs to be included in the bill. Some of those are properly the purview of the Cannabis Regulatory Authority. One thing we've seen from legalised jurisdictions is the importance of being responsive to the realities of a developing regulated market. We don't want to be going back to Parliament every time a single setting needs shifting. The job of the law is to establish the bones and the backstops of a regulated regime.

Finally, I would say two things. The first is that anyone insisting that the tightly-regulated regime this bill describes would be more harmful than the completely unregulated status quo needs to read the damn thing again. The second is that the time is past due for good-faith engagement from Parliamentary parties. All of them. This is much too important to deployed as a mere political wedge. New Zealanders deserve better than that.

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