Recreational Cannabis Regime could be around the corner for New Zealand

In two months, New Zealand will hold a referendum giving its residents the opportunity to weigh in on whether recreational use of cannabis should become legal in the country. The referendum will occur alongside New Zealand's 2020 general election, set to take place on September 19, 2020. If more than 50% vote "yes" to legalizing recreational use of cannabis, the incoming government may introduce a Bill to Parliament that would create laws to establish a legal recreational cannabis regime.

To inform voters, the federal government released the final details of its proposed "Cannabis Legalisation and Control Bill" (the "Bill"), on May 1, 2020. The stated objective of the Bill is to create a regulatory framework that will reduce cannabis-related harm to individuals, families, and communities. The Bill aims to do so by controlling the quality and potency requirements of cannabis, improving access to health and social services, and educating individuals about the health risks associated with cannabis use and misuse.

If the Bill survives the referendum, the public will have an opportunity to submit comments before it is introduced to Parliament. If the Bill is enacted as it is currently proposed, individuals who are 20 years or older will be legally allowed to purchase, share, and possess cannabis (subject to certain restrictions set out in the Bill).

Other key provisions of the Bill include:

  • The role of the Cannabis Regulatory Authority: The Bill, if passed, will establish a new regulatory body, the Cannabis Regulatory Authority (the "Authority") to oversee the supply and use of recreational cannabis. The Authority's main objectives are: (a) to further develop the well-being of individuals in New Zealand; (b) reduce harms associated with cannabis use; and (c) decrease the illegal use of cannabis. To achieve these objectives, the Authority will be assigned a wide range of functions which include enforcing compliance with licensing conditions and provisions related to individual possession and use of cannabis. The functions of the Authority listed under the Act is not exhaustive, and the Authority may delegate some of its functions to other governmental bodies.
  • Growing cannabis for personal use: Individuals will be entitled to grow their own cannabis, but will be limited to two plants. If multiple adults live in a household, there will be a maximum of four plants per household. All homegrown plants must be cultivated in private.
  • Licensing requirements: You must hold a license under the proposed Bill to interact with cannabis commercially. There are three types of licenses contemplated by the Bill:
    1. Cannabis production license: This authorizes activities related to growing, selling, and supplying cannabis growing stock or cannabis to other license holders; processing, packaging, and labeling cannabis; selling cannabis seeds and growing stock to the public; conducting cannabis research and development; and performing safe destruction of cannabis.
    2. Distribution license: This authorizes retail activity (i.e., selling cannabis and cannabis products to the public) and consumption activity (i.e., operating public spaces for the consumption of cannabis).
    3. Testing license: This authorizes activities relating to testing and verifying cannabis products. These activities include altering the chemical or physical properties of cannabis; certifying the quality, quantity, and potency of cannabis before the public has access to them; providing a destruction activity authorization to a cannabis production license holder; and destroying cannabis.
  • Retail premises: The Bill contemplates that distribution license holders will be entitled to sell cannabis products to the public at locations approved for retail activity by the Authority. However, retailers will be required to comply with the restrictions set out in the Bill (e.g., cannabis products should not be sold to an impaired person).
  • Consumption premises: A license holder must allow individuals who are 20 years of age or older to consume cannabis products on any premises that have the authorization for consumption activity. These premises must have food, non-alcoholic beverages, and water available for patrons. Individuals are prohibited from consuming tobacco and alcohol on these premises.
  • Security, testing, and record-keeping: Each license holder, notwithstanding the type of license, will be required to (a) keep their cannabis products secure, and ensure the safety of their employees, customers, and the community; (b) ensure their cannabis products were tested by an authorized analytical testing laboratory before it is sold or marketed for recreational use; and (c) keep records detailing all cannabis purchased, sold, supplied, or destroyed.
  • Packaging and labeling requirements: Cannabis products must meet a set of packaging requirements (e.g., each package cannot have more than 14 grams of dried cannabis or its equivalent) and labeling requirements (e.g., all cannabis products must include health warnings on the labels).
  • Restrictions on advertising and promotional activities: The Bill, if passed, will prohibit all advertising of cannabis products, with exemptions outlined for certain publications and retailers. The Bill also prohibits any sponsorship involving the use of a cannabis product's trademark. Licensed products will be permitted to bear the producer's brand name only.
  • Enforcement of general provisions and licensed activities: Penalties for not complying with the legislation include fines and, in serious cases, imprisonment.

A recent poll conducted in June by Horizon Research and commissioned by New Zealand's largest licensed medicinal cannabis company, Helius Therapeutics, found that 56% of respondents planned to vote in favor of legalizing cannabis. Although it seems that the recreational use of cannabis will become legal in New Zealand, there are still several months left before the referendum, and changes in voter opinion are possible.

We look forward to finding out whether the majority of New Zealand voters will support the Cannabis Legalisation and Control Bill on October 9, 2020, when the official results will be released. If this Bill is passed, it will open up a new market for Canada to interact with for market activity, notwithstanding the distance between the two.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.