Comment

Cannabis questions dropped in too hard basket?

The details around any future legal recreational cannabis market remain foggy, especially when it comes to the role of the police, and the price of products, says Peter Dunne

In a welcome diversion from the understandable preoccupation of recent weeks with Covid-19, the Government announced last week the final details of its proposed recreational cannabis scheme ahead of the referendum to be held alongside the next General Election, whenever it may occur.

Given that the moves towards freeing up the recreational cannabis market were primarily Green Party initiatives that neither Labour nor especially New Zealand First were all that keen about, the proposal that has now emerged hangs together reasonably well. It is an improvement on the current de facto situation, and for that reason alone is worth supporting in the referendum.

However, possibly reflecting the awkwardness of its development, it is far from perfect, with a significant number of issues either apparently unresolved, or seemingly parked in a very deep too hard basket.

It is likely though that voters will be seeking clearer answers on each of these before they vote in the referendum. Unless such answers are forthcoming, they may yet prove to be the devil in the detail that defeats the scheme in the referendum, in that event setting off an even more unsatisfactory situation than at present.

The first question is what happens next if the referendum supports change.

Should the National Party lead the next government, the prospects for any form of legislative change following on from a positive referendum vote seem pretty low

The present Government has made it clear that while it will not regard the outcome as binding, it will undertake to introduce reform legislation at some unspecified time during the next Parliamentary term.

There is no guarantee within that commitment that any such legislation will mirror the referendum proposals or that the Labour Party will even support it beyond its introduction stage. If, for example, the Greens have less influence in the next government, what influence will that have on the shape of legislation? Conversely, if the next government is more reliant on New Zealand First, what assurance is there that a Bill will even make it to the introduction stage?

Should the National Party lead the next government, the prospects for any form of legislative change following on from a positive referendum vote seem pretty low, based on statements to date from its various spokespeople.

They reinforce my own experience working as Associate Health Minister responsible for drug policy, in the last National-led government where National was extraordinarily wary of any changes to drug laws.

Whatever the perambulations, a bigger unanswered question relates to how long it will take to pass such legislation and what happens in the interim.

Typically, a Bill of this type takes between six and nine months to pass through all its stages in the House, including the select committee process and the hearing of public submissions.

Even if such a Bill were to be introduced early in the life of the next government, it would most probably be the latter half of 2021 at the absolute earliest before it would be passed by Parliament. Again, typically, allowing time of say two to three months as a minimum for the development and implementation of the regulatory regime to follow, it would most likely be late next year at the earliest before recreational cannabis could be legally available.

In the meantime, assuming a vote for change, there will be a strong public feeling that having voted for change it should be permissible to use cannabis recreationally immediately.

That would put the police in a very awkward position. Would they be quietly encouraged to go lightly on the current law, because it is about to change, which would be a very dangerous precedent, or would they be expected to keep enforcing a law that everyone knows is about to be overturned?

Either way, their position is invidious, and does not appear to have given been sufficient consideration. Certainly, to date, the Government has given no indication of its thinking on this point, which is not helpful.

The next unclear issue relates to the referendum itself. Government spokespeople and official statements have consistently said that for the referendum to pass it must have the support of at least 50 percent of those who vote.

What is of interest here is the constant reference to 50 percent, rather than to a simple plurality. Does this mean that if, hypothetically, 49 percent vote yes, 45 percent vote no, and the remainder spoil their votes, the referendum will be deemed to be lost?

With most opinion polls indicating a likely close result, this scenario is well within the bounds of possibility and requires clarification.

In terms of public usage, the regime proposed is rather conservative, and to that extent in line with the public health approach its supporters say is their overriding concern.

Consistent with the rules regarding tobacco smoking, consumption of cannabis will be generally prohibited in public places, other than cannabis retail outlets. This, along with the age restriction to 20-year olds, is much tougher than the current de facto situation, where the gentle aroma of cannabis smoke frequently wafts through parks, beaches, music festivals and other public places. All these currently commonplace situations would be illegal under the proposed new regime, with strict penalties for any breaches.

Presumably, the police would be expected to enforce these new restrictions vigorously, otherwise they are pointless. But enforcement of this type would lead to more people coming before the Courts for diversion, a fine, community service, or even possible imprisonment.

However, the current law on illegal use has been barely enforced by the police for years now, so it is an open question whether they would be any more diligent in enforcing any new, tighter law. And if they are not going to do so, what is the point of making the law tougher?

Current policing attitudes notwithstanding, one of the strongest criticisms over the years from cannabis reform advocates has been of what they have seen as the clogging of the Courts from cannabis prosecutions and the consequent labelling for life of many people with criminal records as drug offenders. 

Yet under the new regime, this could potentially intensify, making the situation much less satisfactory than at present.

It would be a shocking commentary on the government’s business acumen to assume it could be planning to set up a state monopoly... without any information on overall costs and the consumer price.

The biggest unanswered question remains that of price.

While economists and others have touted a possible $490 million revenue gain to the Crown through an excise tax on recreational cannabis products, evidence on how that figure has been derived is scant.

The relevant Cabinet papers make no estimate of the potential size of a retail cannabis market, nor do they specify in any way or quantify how and at what rate an excise tax, presumably in addition to GST, might be applied. They just make the virtuous observation that taxes on cannabis products will be ploughed back into the public health system.

Nowhere is any official information available about the likely end-price to the consumer. This is especially curious given that the whole system is to be government run, with little input from the private sector.

It would be a shocking commentary on the government’s business acumen to assume it could be planning to set up a state monopoly on recreational cannabis production and distribution, without any information on overall costs and the consumer price. Yet that appears to be what is happening.

In the absence of any government figures, some informal calculations can be made. Anecdotal information suggests that cannabis is selling on the Wellington black market for around $13 a gram at present. In Canada, the country whose legal regime we appear to be broadly following, the current official cannabis price is NZ$11.70 a gram. Prior to its law change, the street price in Canada was NZ$7.50 a gram. The state’s intervention there has lifted the consumer price by 56 percent. Were the same to happen here the price per gram would rise to just over $20.

Under the New Zealand plan, a person would be able to buy up to 14g of cannabis at any one time. According to international estimates, a typical joint contains 0.32 g of cannabis, meaning about 42 joints could be made from the original 14g. At $20 per gram (or $280 per 14g) that equates to about $6.66 per joint. By comparison, the average tobacco cigarette contains about 0.625 grams of tobacco, and with a current average price of $37.48 for a packet of twenty cigarettes, means each tobacco cigarette, currently retails at around $1.87, less than a third of the potential price of a joint.

Where it all becomes rather confusing is that one of the strongest arguments for permitting the distribution and sale of recreational cannabis is that, while not without risk to young people, it is relatively harmless for adults, compared to drugs like tobacco or alcohol, yet the Government seems to be suggesting a regime that will make recreational cannabis substantially more expensive than tobacco to users, in actual and proportionate terms.

Is that the message the Government wants to send? Especially since one of its big selling points – which is good and worthwhile – is that its changes are all about treating cannabis as a public health rather than a legal issue?

One of the paradoxes of this Government has been that it either becomes too transfixed by the task ahead to be able to do anything meaningful, so ends up promising big but delivering little, or just plunges ahead regardless, hoping someone else will sort out the details, as well as carry the blame if things do not work.

Unfortunately, its recreational cannabis scheme is beginning to look more like further proof of the paradox, than the coherent reform package many supporters of change were hoping for.                                          

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