NZ recreational cannabis bill released – prioritises social good over profits
New Zealanders will go to the polls on September 19 to vote for their federal government as well as two contentious referenda: voluntary assisted dying and recreational cannabis.
But first we invite you to take a moment to bask in the glory of an efficient and reasonable government that communicates concisely and clearly. Round of applause for you, New Zealand.
What we knew from the draft legislation
- Adults 20 years and older would buy products from licensed stores (no home delivery)
- Adults would be able to buy up to 14g flower (or equivalent amounts for other products) per day
- No advertising of any kind and plain packaging would be enforced
- Home grow would be allowed but limited to 2 plants per person, 4 per household
- Licensed consumption venues would be allowed
Industry structure and social benefits
Now to the new information.
More than any other piece of cannabis legislation, this one clearly aims to fulfil on its stated purpose which is to “reduce cannabis-related harm to individuals, families/whānau and communities”
Should this referendum succeed, it would create a locally-focused and diverse industry with genuine social benefits. And not just the ‘taxes and jobs’ kinds of benefits we see from more free-market cannabis frameworks. But genuine social improvements targeted at the most disadvantaged members of society and those most harmed by the criminalisation of cannabis and other drugs.
Government would set a cap on cannabis production
A cap would be imposed on the amount of cannabis that the industry as a whole can produce. Licensed companies would apply for permission to produce a percentage of that total amount. Applications would be considered based on the extent to which the applicant:
- represents or partners with communities disproportionately harmed by cannabis
- generates social benefit and builds community partnerships
- promotes employment opportunities and career pathways
But here’s the really interesting part: the maximum share of that total national amount one company could be issued is 20%. So no licensed producer will ever gain more than 20% of the total market by law. And some percent of that total amount will be set aside for micro cultivators.
Products must be assessed and approved
THC limits on cannabis and cannabis products would be set, while taking into account health concerns, consumer choice and the potency of black market products. So it could be that legal recreational cannabis THC limits are set somewhere below, but close to, black market levels. And this would disincentive the mindless pursuit of higher THC concentrations seen in other markets.
The first products to become available would be dried and fresh cannabis, plants and seeds. As time goes by, more product types would be permitted via regulation including edibles and concentrates. Interestingly, some product types would be banned from the outset including beverages and also “packaged dried or fresh cannabis containing roots or stems” which might be a quality control provision but strikes us as strangely specific.
Taxes and levies
Cannabis and cannabis products themselves would be taxed at the point of packaging and labelling and be based on a combination of weight and potency. Along with a standard fee structure to fund the regulator, additional levies would be imposed on licensed producers directly linked to public health interventions aimed at reducing social harms caused by cannabis. Public health strategies would be designed by an advisory committee which would also be responsible for setting potency limits, production caps, and other aspects of the regime.
But will the referendum succeed?
That’s the 20% of one million dollar question. We haven’t seen a major poll on this in some time and even then polls can be unreliable. But how do we think this proposed legislation, now released in full, will play into the political debates leading up to the referendum?
The bill clearly sets out to reduce cannabis related harms, which is ostensibly what the anti-legalisation camp are all about. Marginalised communities are prioritised; potency is government-controlled; products require pre-approval; industry will pay levies to fund drug harm reduction programs; you can’t really argue with any of that.
The other concern we often hear anti-legalisation folks espousing is how ‘big cannabis’ will push the government around and be generally evil. Leaving aside how those arguments could also apply to legally-available drugs such as alcohol, the cannabis industry will be fragmented by design. Mandating a maximum 20% market share is genius as far as politics goes because it prevents market power concentration. It also somewhat limits economies of scale, reducing the extent to which people can be replaced by machines.
In other cannabis markets, profitability and revenues are first priority and most ‘corporate social responsibility’ programs are thinly veiled marketing exercises. In the New Zealand model, being a genuinely good corporate citizen is the only way you will be issued market share. It’s not hard to imagine how this might produce a ‘race to the top’ between cannabis companies. This sounds almost naive but that’s exactly what this legislation is designed to produce.
This kind of smart and pragmatic policy design is what we’ve come to expect from a small but nimble country able to adapt quickly to emerging circumstances. There may be more than a few bumps on the road but we are confident that, should this referendum succeed, it will be a global example of how to legalise recreational cannabis while prioritising social good over corporate profits.
FreshLeaf Analytics, a division of Southern Cannabis Holdings, is the leading supplier of data about the medicinal cannabis industry in Australia. We have access to medicinal cannabis product, pricing and clinical data sets from some of Australia’s leading healthcare companies and organizations including healthcare clinics, pharmacies, product suppliers and the TGA. The FreshLeaf Analytics team provides custom research, analysis and consulting services in the Medicinal Cannabis market in Australia. The FreshLeaf Analytics team can be contacted on +61 2 8203 8741 or [email protected]