It would also codify police discretion into law, clarifying that a prosecution for drug use or possession - regardless of which drug - should only be pursued if it was in the public interest, taking into account whether a "health-centred or therapeutic approach would be more beneficial".
While generally applauded as a move towards a more health-based approach, Māori public health organisation Hāpai Te Hauora says Māori have generally suffered from inequities in the system, including from police discretion.
"When we talk about the police discretion, we know categorically that for many, many years that has not benefited Māori communities," Hāpai chief operations manager Selah Hart told the Herald.
She said without proper training to enable police to unpack unconscious biases, the bill could lead to poor outcomes for Māori.
"There is a lot of unconscious bias that occurs within many different levels of society. We are potentially putting more of our community at risk."
The Drug Foundation, in its submission to the health select committee, said the bill improved the status quo but warned that putting police discretion into law "may mean continued over-representation of Māori in conviction and imprisonment rates".
"While it can minimise costs and harms by diverting people away from the criminal justice system who ought not to be there, it can also provide an opportunity for unfairness, discrimination and uncertainty," the foundation said, paraphrasing concerns raised in the Law Commission's 2011 review of the Misuse of Drugs Act.
Foundation executive director Ross Bell told the Herald some police did outstanding work, but they were not infallible.
"Police try their best. They've got great people. But not every police officer is perfect."
According to Ministry of Justice statistics, about 40 per cent of people charged or convicted for cannabis offences in 2018 were Māori, a rate that has mostly stayed the same in the past decade.
For drug offences, 43 per cent of people convicted in 2018 were Māori, while 42 per cent of people charged were Māori.
Bell said a long-term solution that did not rely on police discretion would be something similar to the mandatory cautioning scheme that the Law Commission recommended in its 2011 review.
The scheme - rejected by the previous Government - would have meant that a person caught in possession of drugs would be required to attend an intervention, and would only be prosecuted after three warnings.
The Cabinet paper on the Government bill said police were taking steps to improve awareness of unconscious biases, but noted: "Māori are ... disproportionately impacted by cannabis possession and use prosecutions. Reinforcing police powers of discretion may raise issues around the disproportionate impact of the criminal justice system on Māori."
Police have said that the use of discretion was guided by the Policing Act 2008, the Solicitor-General's prosecution guidelines, and the police's "prevention first" operating model.
"Applying this discretion increasingly includes the use of alternative resolution options including pre-charge warnings, Te Pae Oranga (Iwi Community Panels), and referrals to health and other support services," a police statement said.
"Police will work closely with partner agencies to develop clear guidance for dealing with those in possession or using drugs, as legislative details are confirmed."
In its submission on the bill, the Drug Foundation welcomed the reclassification of synthetic drugs, but cautioned that it could criminalise society's most vulnerable.
"It was clear from our investigations that people who use synthetic substances heavily are some of New Zealand's most vulnerable people ... Many were homeless and most were unemployed.
"Classifying these substances as Class A puts these vulnerable people at risk of criminal conviction - whereas what they most urgently need is intensive health and social support."
The foundation also called for a review of the Misuse of Drugs Act, which it said was 44 years old and no longer fit for purpose.
The thresholds that indicate when drugs are for supply, rather than personal use, were an indication of how out-of-date it was, the foundation said.
"This makes it possible that some heavy users may be wrongly prosecuted for supply, which carries very high penalties under the act."
Ministry of Justice statistics
• 41 per cent of people convicted for cannabis offences in 2018 were Māori
• 40 per cent of people charged for cannabis offences in 2018 were Māori
• 43 per cent of people convicted for drug offences in 2018 were Māori
• 42 per cent of people charged for drug offences in 2018 were Māori
