However, his drug use has continued.
"He has presented to previous boards with a number of positive features, but he lets himself and others who have supported him down," the latest board report, released to APNZ, says.
Manawatu Prison manager Ngaire Knowles said it was not known how Nicholson-Kuiti obtained cannabis.
"Having drugs in prisons in not acceptable and Corrections have a range of measures to keep them out," she said.
"Manawatu Prison is taking a range of measures to prevent the introduction of drugs into the prison and the distribution of drugs between prisoners. We cannot comment in more detail due to security considerations."
But Ms Knowles did say efforts included camera surveillance in prison visit rooms, scanners and x-ray machines to search visitors, and banning people who tried to smuggle drugs into prison.
She said all that was working, highlighted by the drop in the number of inmates who tested positive for drugs. In 1998, when random tests were introduced, 34 per cent of inmates nationwide tested positive.
Last year that dropped to 4.3 per cent. At Manawatu Prison, there were 11 positive tests out of 123.
Nicholson-Kuiti and other inmates found to be using drugs inside face internal sanctions, although Ms Knowles would not say what punishments he faced.
The Parole Board said he needed to produce negative tests and undertake a drug treatment programme.
Bailey Kinita's mother Cath said it was good Nicholson-Kuiti had declined to apply for parole and instead seek treatment for his drug use.
"It means he's trying to mend himself."
Ms Kinita said she harboured no resentment towards Nicholson-Kuiti, who at an inquest last year delivered a tearful apology for his role in the crash.
It was alleged Nicholson-Kuiti was racing Michael James Needham at the time. At a High Court trial Mr Needham was acquitted of charges of being a party to manslaughter and dangerous driving causing injury.
Miss Reichenbach had just finished a three-year diploma of occupational therapy when she died.
Bailey, who had not been drinking the night of the crash, was newly enrolled at Manawatu College and just a week shy of his 15th birthday.