Kevin Jenkins is managing director of professional service firm MartinJenkins
The uneven liberalisation of cannabis laws internationally is throwing up some strange and thorny issues. On the West Coast of the US there's a 'pot banking' problem: recreational marijuana businesses are legal at state level but not at federal, and this means most banks won't touch their money for fear of breaching federal money laundering laws.
For the new West Coast marijuana entrepreneurs, having all that cash around is inefficient, frustrating and also – according to a friend-of-a-friend with a son in the business out in LA – more than a little scary.
In Oregon, marijuana businesses have to pay their state taxes by lugging cash each month all the way to a single bullet-proofed site in the state capital, Salem – so much for 'making compliance easy'.
In California, the idea of a central state bank has been floated to fix the cash-only problem, and in other states credit unions are also stepping into the gap. I'm sure lots of people are thinking about offering a blockchain solution here too, but that's another story.
In Aotearoa we don't have that disconnect between state and federal jurisdictions to complicate cannabis law reform. But, as the submissions on our Government's medicinal cannabis Bill show, it's already complicated enough.
The Misuse of Drugs (Medicinal Cannabis) Amendment Bill attempts to bridge the gap between those who see the medical benefits of cannabis – particularly for those terminally ill or with chronic pain – and those concerned to manage its risks through continued tight control.
The Bill takes a bite at a complex, highly charged issue with several different legal and/or practical dimensions – not just (de)criminalisation, but also regulatory frameworks for medicines, quality of supply, and doctors' prescribing behaviour.
What the amendment Bill does
Given the Bill was introduced as part of the Government's 100-day plan, there seems little question it will be passed. However, it's attracting some heavyweight submissions both for and against, and therefore may change quite a bit by the time the Health Select Committee reports back at the end of July.
As the name of the Bill indicates, it's not about recreational use. The Government is going to hold a referendum on that much wider issue by – or at the same time as – the 2020 general election.
So what exactly does the Bill do in its current form?
The Bill has three distinct elements.
First, if would let you off the hook if you're terminally ill and are caught with cannabis or cannabis products. It's already legal for patients to possess medicinal cannabis on prescription from a doctor who has Ministry of Health approval (assuming a suitable imported product is available).
The law change would remove criminal liability for people who are terminally ill even if they hadn't obtained the cannabis on prescription.
Second, the Bill removes cannabidiol – 'CBD' – from the list of controlled drugs. Cannabidiol, as you might have guessed if you didn't know already, is a chemical found in cannabis. It has little or no psychoactive properties and is reportedly a good pain reliever. Again, doctors can already prescribe it, but its current status as a controlled drug places a significant burden on those who handle it in the supply chain to keep it safe.
The third proposed change in the Bill – and seemingly the least controversial – is a new regulation-making power to set quality standards for medicinal cannabis products (and others containing controlled drugs) that are manufactured in or imported into New Zealand.
What will the law changes mean in practice?
Let's suppose the Bill does survive in pretty much its present form – what will it mean in practice?
Most obviously, patients who are terminally ill will be able to use their own sources to get their cannabis, without having to go through a doctor.
But what this change doesn't do is make it any easier for terminally ill people to get their hands on the right stuff.
Also, the protection against criminal charges doesn't extend to family and friends who may be sourcing and handling the drug. So it seems the effect of this change on the actual use of cannabis for palliative care would be minor. It will, however, provide some peace of mind for those facing a situation none of us want to be in.
The loosening of restrictions around CBD looks more promising as a means of effective relief.
There are still arguments in the medical and therapeutic community on the effectiveness of the compound in treating ailments. For local business to take off, doctors will need to have confidence that the available supply is of the right quality, and pharmacists will also need to be willing to stock the CBD products. Again this is far from a slam dunk.
How the Bill could change
In simple terms, it could become either more or less permissive.
The Auckland Patients Group recommends that the proposed protection for those with a terminal illness – defined in the Bill as one from which you can reasonably be expected to die within 12 months – should be extended to those with 'severe or debilitating' conditions. After all, suffering is suffering, regardless of whether death is reasonably imminent.
The Auckland Patients Group also argues it shouldn't be an offence for a sick person – or someone else on their behalf – to cultivate or manufacture cannabis for medicinal use. You can see their point. Removing criminal liability here looks a pragmatic way of getting medicinal cannabis to anyone who believes they would benefit from it.
But you can also see the objections if you are still committed to controlling the recreational use of cannabis. It's hard to draw lines around 'severe or debilitating'. And how are you going to stop leakage from casual medicinal growers to the recreational market?
This highlights the central issue with the Bill: we have an established process for channelling potent drugs to those who need them, and the Bill partially circumvents that process.
Getting drugs approved takes time and money, and going to the doctor for a prescription is an added hurdle. But these processes are there for good reason. The Bill goes round these controls for cannabis – but once the case is made for cannabis, what next?
New Zealand business waiting in the wings
It's been estimated that by 2024 the global legal cannabis market will be worth around $90 billion. With that in mind, a number of New Zealand-based businesses are positioning themselves to acquire a share of this market when cannabis restrictions loosen here.
The Hikurangi Cannabis Company is already growing hemp in Ruatoria under a Ministry of Health licence. The company has now also signed a Letter of Intent with US firm Rhizo Sciences to produce 12 tonnes of pharmaceutical grade cannabis products for export over the next four years.
This $160 million deal would mean a major boost for Gisborne and the East Coast if it goes into action.
Hikurangi Cannabis has certainly generated some interest: when the company came out with its public offer on a crowdfunding site in May, the site crashed before the offer could even open. When it reopened the next day it raised $2m from 3,000 people in a little over quarter of an hour.
Helius Therapeutics is another New Zealand cannabis start-up that's raising capital in preparation for cannabis restrictions opening up.
Paul Manning, one of the firm's three owners, says the entry barriers are significant, and that it will take more than $5m just to set up the facility that's needed.
But Manning, who gave up a comfortable slot in the ad industry, has an eye on the Ministry of Health's estimate that 235,000 Kiwis are already using medicinal cannabis, and he thinks the local medicinal cannabis market is worth $1b.
The Government's proposed 'Medicinal Cannabis Scheme'
In its current form the new amendment Bill will not of itself allow those New Zealand-based entrepreneurs to go into full-on production for the market – the Bill does not of itself legalise the domestic growing of cannabis where it's currently illegal.
Cultivating cannabis is already permitted with a licence from the Ministry of Health, but so far MOH has only been granting licences to cultivate for scientific research or clinical trials.
However, the power in the amendment Bill to make regulations to set quality standards is a key component of the new 'Medicinal Cannabis Scheme' being developed by the Ministry of Health. This could mark a significant shift.
According to MOH: 'The scheme will support medical practitioners by increasing the range and availability of quality cannabis products, and providing information on those products.'
As well as quality standards and a licensing regime, the Medicinal Cannabis Scheme will also include a new medicinal cannabis agency to oversee the cultivation and manufacture of cannabis domestically and also imports from overseas.
There is clearly political support for some easing of controls around cannabis. But decriminalisation in itself is not likely to be enough to increase usage. That, it seems, will take something of a 'whole of system' approach and sustained regulatory work on a number of inter-related fronts, including attitudes and practices among the medical profession.