Local addiction specialists are welcoming a law change that will change the way synthetic cannabis-like products are sold.
From the middle of next year, legal high manufacturers will face an estimated $180,000 application fee plus $1 million to $2 million in testing costs for each product they want to sell.
They could also face up to eight years' jail for selling banned substances.
Bay of Plenty Addiction Service clinical team leader Anne Gosling, of the Bay of Plenty District Health Board, said the changes were a step in the right direction.
"These measures are designed to reduce harm. Some of the harms associated with these substances include changes in mental state, which include increased anxiety, mood changes, paranoia and psychosis.
"They can cause palpitations, respiratory difficulties, heart attacks and convulsions," she said.
"The BOP Addiction Service welcomes the Government's announcement, which is a positive step towards reducing the harm caused by 'legal highs'."
Staff at Tauranga Get Smart Drugs and Alcohol Services were also supportive of the action.
Manager Stuart Caldwell believed the changes would help reduce the use of legal highs and other similar substances.
"Currently the manufacturers have a field day, as [it appears] there is little or no requirements around naming ingredients in these products. If we compare it to a legitimate food product sold by a supermarket having to have very exact ingredient labelling, it makes the current legislation a nonsense," he said.
"We absolutely agree that the products need to be tested before they are sold.
"The purpose of this testing is to establish side effects etc, as is done with all pharmaceutical products." .
Krista Davis from the same organisation said many of the clients she had seen have experimented with legal highs, some with no serious adverse effects and others with very serious and dangerous side effects.
"Just this past weekend, one of my regular clients had to be admitted into the mental ward because of drug-induced psychosis, which was directly linked with synthetic cannabis use," Mrs Davis said.
"He was having auditory hallucinations - hearing voices - telling him to hurt others. He was also claiming he was the devil and spouting off about 666 and demons."
In Parliament, Mr Dunne said he made "no apologies for setting the bar high on public safety, and putting in place a regime with the process costs squarely on the legal highs industry and not the taxpayer".
"I have said all along that this regime will be fundamentally based on reversing the onus of proof, so those who profit from these products will have to prove they are as safe as is possible for psychoactive substances. We will no longer play the cat-and-mouse game of constantly chasing down substances after they are on the market."
Penalties under the new regime will include up to eight years in prison for importing, manufacturing, supplying or possession with intent to supply analogues of controlled drugs that come under the Misuse of Drugs Act, and up to two years for import, manufacture, supply or possession with intent to supply unapproved substances.
Labelling and packaging requirements will require all products to have a label listing their active ingredients, the phone number for the National Poisons Centre and contact details for the product's New Zealand manufacturer or supplier.
Since the Temporary Class Drug Notices was instituted in August 2011, 28 substances and more than 50 synthetic cannabis products have been taken off the market.