The current law has failed. Cannabis prohibition has fuelled a lucrative illicit market ruled by violence, while not deterring use. The NZ Law Commission estimated police spend $300 million every year on cannabis law enforcement. Yet more than half the population has tried cannabis, and one-in-ten are regular consumers. New Zealand voters will decide whether to keep the current law or try a new approach.

Decriminalisation models may lead to increased police activity and do not address the illicit market, whereas a free market could increase problematic use. A government-controlled and tightly regulated legal market can reduce harms from law enforcement, achieve public health objectives and comply with international drug treaties. Sales would be restricted to adults, and rules set by regulators. Legal cannabis products would be tested, clearly labelled, and providers would be responsible for consumer safety. Making cannabis legal could also raise hundreds of millions of dollars in taxes and create thousands of jobs.

A Cabinet paper released by the Government says the referendum will be a choice between the status quo and a regulated approach that would:

  • allow adults to possess and use cannabis in private spaces including private homes and licenced premises;
  • provide for themselves and share with other adults; and
  • purchase cannabis from licenced premises.

All the parties that make up the current Government have committed to abide by the outcome, effectively making it binding. Officials have been empowered to draft the legislation with stakeholder input. Ultimately the model must achieve public health outcomes while reducing illicit activity and discouraging a powerful industry. The government has indicated the starting point for any model will be:

  • Adults over 20 can use, possess and grow their own cannabis.
  • Sales of cannabis will be permitted through physical stores.
  • Potency will be limited.
  • Consumption will be limited to private homes and licenced premises.
  • Public use will remain prohibited. It would remain an offence to supply minors.
  • Advertising and promotion will be heavily restricted.
  • Driving and impairment will be treated consistently with alcohol and controlled regardless of the referendum results.
  • Products attractive to minors, such as candy, are not expected to be available.
  • Medicinal access and hemp will remain separately regulated. \

Retail sales are likely to be among the most controversial aspects of the model proposed for the referendum. The model presented for the referendum must incorporate local concerns over the availability of tobacco, alcohol, and legal highs sold under the Psychoactive Substances Act. Canada has already made cannabis legal and the provinces provide several examples for New Zealand to learn from, including state-run monopolies and local craft production.

This model takes the social objectives of the Liquor Licensing Trusts but rejects both their quasigovernmental status and their monopolies which are typically disliked among residents and associated with higher prices and fewer choices. Instead, this model makes social equity a central part of the reforms, and supports good behaviour by market participants. This includes:

  • Expunging criminal records for cannabis and removing reducing other barriers for experienced providers to go legal.
  • Imposing a Cannabis Sales Levy with revenue targeted to treatment and education, law enforcement, research, public awareness, local grants administered by the Lotteries Board, and social equity programmes.
  • Supporting regional development and helping communities most affected by previous policies.
  • Taking stores away from shopping and residential areas, and making
    consumption limited to member’s Social Clubs (similar to RSAs or sports clubs).
  • A points-based licensing system that supports social equity applicants, encourages retail to be run as social enterprises, and favours local, craft and artisanal production.

Cannabis levies would fund the costs of the scheme, increased research, education and treatment, and provide a contestable pool for local grants. This would be administered by the Lotteries Grants Board, not controlled by the licence holder or an entity run by local politicians. Local bodies who allow Social Retail and/or Social Clubs can opt to impose an additional Regional Cannabis Levy (of up to 3%) which they would receive.

Legislation should be passed with priority, ideally within 6 months of the referendum. The scheme should be operational 12 months later, with licences issued in several waves, and improved on an ongoing basis. Regulators must be empowered and adequately resourced to do this work. To speed this up, many of the rules can be copied from Canada or Uruguay. Some issues could be devolved to local government, although this could prolong any local controversy and media attention.