The legalisation of cannabis for personal recreational is set to become a major issue next election when voters will be asked to support or oppose a draft law in a referendum.

Legal use would be limited to people aged over 20, smoking would be limited to specially licensed premises and private property, and there would be limits on home-grown cannabis, if legalisation is approved in the referendum, and passed by the next Government.

Advertising cannabis products would be banned and it would be taxed.

But much of the detail of the draft law is yet to be decided. The Ministry of Justice will consult interested parties including academics, researchers, cannabis users and iwi before drafting the proposed law.

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And Justice Minister Andrew Little is forming a cross-party group of MPs to have input into the draft bill which, according to the timeline in the Cabinet paper, should be ready by June next year.

The Electoral Commission will run a public education campaign on the referendum, which was a condition of the Green Party's confidence and supply agreement with Labour.

Prime Minister Jacinda Ardern will not give a personal position on the referendum, saying the aim of the exercise is to let New Zealanders decide.

But the three parties of Government, Labour, New Zealand First and the Greens, have promised to abide by the referendum result.

That means if their MPs are personally opposed to legalising the personal recreational use of cannabis, their MPs would be honour-bound to vote in favour of it if they are returned to Government.

Little has previously said the referendum would be binding - and Cabinet agreed on December 17 to a binding referendum, meaning a law would be passed which would come into effect if approved by a referendum.

The draft law as proposed is a weaker version of what Little previously outlined.

Little's Cabinet paper said the primary objective to introducing a regulatory model for personal recreation use were to reduce harms, lower the overall use of cannabis over time through education and addiction services, particularly by youth, and that revenue raised should contribute to relevant health-related measures.

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A secondary objective was to disempower the gangs and illegal trade in cannabis and lower the prison population over time.

National leader Simon Bridges says he will not commit to abiding by the referendum result until he sees the actual draft law.

"I would need to have some answers to some basic questions like: What's the tax rate going to be? Will gangs be able legally to sell drugs? Will edible gummy bears be legal?"

Drug reform spokesperson Paula Bennett said by putting up a draft law, the legislation would not have the opportunity to go through the House, and Parliament would not have the chance to improve it through a select committee and expert advice.

Act leader David Seymour welcomed the referendum, saying prohibition of cannabis had clearly failed.

He said New Zealand would be able to learn from Canada which was two years ahead of New Zealand in the legalisation process.

"The Government should send commissioners to Canada to find out everything they can about that country's experience with legalisation."

Personal use of recreational cannabis - Referendum 2019

What question will voters be asked at next year's election?

It will be a simple Yes or No answer to a question that will drafted by the Electoral Commission about legalisation of personal cannabis use.

When will the Electoral Commission do that?

Probably not until the Government has come up with a draft law in June next year to legalise cannabis.

What will the draft law say?

It is not 100 per cent agreed yet among the three parties of Government, Labour, New Zealand First and the Greens, but before drafting the law, the Ministry of Justice will consult interested parties.

What has been agreed by the Government in terms of defining a legal market for cannabis?

These elements will definitely be in the bill: the minimum age would be 20; there would limited options for growing cannabis at home; there would be restrictions on who could sell recreational cannabis; it could be legally smoked only in licensed premises or at home; and advertising cannabis products would be banned.

Will the referendum be legally binding?

No, not in the usual sense of the term. But Labour, the Greens and New Zealand First have promised to abide by the results of the referendum. National will wait until it sees the draft law before it makes any promises.

Who will run an education campaign on the referendum?

The Electoral Commission, after the draft law has been released in June next year.