November 27, 2020

Cannabis referendum: Proposals likely far more restrictive than you think

OPINION: If your main source of information on this year’s cannabis referendum were the Say Nope To Dope campaign, it would be pretty easy to imagine marijuana-leaf decorated cannabis shops on every corner.

Contrary to that campaign’s full-page ads portraying classic Kiwi dairies turned into garish marijuana stores, the Cannabis Legalisation and Control Bill is rather restrictive. Shops like the one portrayed would be illegal under at least two provisions of the bill relating to its signage.

The draft legislation is far from the kind of business-friendly liberalisation that critics fear. And, in some respects, that is part of the problem.

If the bill enabled greater commercialisation, those expecting to do well under a legalised market would be funding a more extensive campaign in support of the referendum. Instead, barring some campaigning by the New Zealand Drug Foundation in support of the bill, the Yes campaign has been rather less vocal than its opponents.

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And if the bill’s drafters had considered one potential legitimate business worry, one reason for opposing it could have been mitigated at the outset rather than needing to be considered at committee.

The proposed legislation on cannabis is a lot more restrictive than opponents say, says Dr Eric Crampton, chief economist with The New Zealand Initiative

UNSPLASH

The proposed legislation on cannabis is a lot more restrictive than opponents say, says Dr Eric Crampton, chief economist with The New Zealand Initiative

But let us first go through the bill as it stands.

Legalisation would shift cannabis from the illegal market into a highly regulated environment. Rather than helping to fund gangs, cannabis purchasers would be paying reasonably heavy taxes to fund both harm-reduction measures and general government activities.

All aspects of the cannabis trade would be heavily regulated. Potency of licensed cannabis would be controlled. Advertising would be banned.

Supply to those under the age of 20 would be prohibited.

Licensing processes would require fit and proper person tests for licensees and for key personnel, including duty managers.

Consumption outside licenced premises, or outside a private home, would be prohibited.

Dr Eric Crampton, chief economist with The New Zealand Initiative, says employees should have the right, in a legalised environment, to consume cannabis on the weekend. But employers should be able to discipline workers who show up to work while impaired.

cameron burnell/Stuff

Dr Eric Crampton, chief economist with The New Zealand Initiative, says employees should have the right, in a legalised environment, to consume cannabis on the weekend. But employers should be able to discipline workers who show up to work while impaired.

Even consumption within a private home could be risky if someone thought you were really running an unlicensed consumption facility open to the public more broadly.

The total amount of cannabis available to the retail market would be capped. Would-be commercial growers would need a cannabis production licence, with preference in licensing given to communities disproportionately harmed by cannabis.

Licenced retailers would need to apply to sell a portion of that capped amount of cannabis; no licence-holder could hold more than a fifth of the total. Distribution licences would be preferentially given to non-profits, and characteristics of the proposed venue’s location, like proximity to schools and other public facilities, would matter.

Growers would not be allowed to operate retail or consumption facilities, so cannabis growers would not be allowed to operate the equivalent of cellar-door or brew-pub operations.

The main scare stories really do not hold up. The legalisation experience abroad counters many of them; the restrictiveness of New Zealand’s proposed framework puts paid to much of the rest.

If you are not certain about any aspect of the bill, it is all easily checked. But a fairly simple heuristic can also work. Just imagine the bill was drafted by people who deeply mistrust business and commerce, who hate advertising, who are not all that keen on cannabis consumption in any case, and whose ideal cannabis operation would be a small non-profit community-based cooperative that employs people from underprivileged communities. Any provisions you might imagine would be drafted by that kind of group will not be far from how the bill really looks.

Scare stories don’t stack up when it comes to the proposed cannabis legislation, says Dr Eric Crampton.

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Scare stories don’t stack up when it comes to the proposed cannabis legislation, says Dr Eric Crampton.

That also leads to a bit of a problem, even if your ideal cannabis operation looks like the kind of business likely to be authorised and licensed under this draft legislation. How can employers whose workplaces involve risky activities like heavy machine operation ensure that they can maintain appropriate health and safety regimes, while not running into trouble with employment law?

It is a difficult circle to square.

Employees should have the right, in a legalised environment, to consume cannabis on the weekend. But employers should be able to discipline workers who show up to work while impaired. The bill does little to enable the latter.

Proving that an employee is impaired can be difficult. Workplace drug testing is a poor indicator of on-the-job impairment; cannabis use over the prior weekend can too easily be caught in those tests if the threshold is set at a low level. Further, if an employee’s terms of initial employment did not include provision for drug testing, it can be difficult to add those provisions later.

Prohibition makes it risky for workers to show up to work while impaired, the consequences could be worse than an angry boss. Removing that constraint, while not providing better ways for employers to ensure on-the-job safety, can make for a problem.

I hope the cannabis referendum passes, and that the bill is brought to Parliament. When Parliament considers the bill at committee, it should also think on how to balance workplace health and safety requirements. Making it easier for employers to add testing requirements to employment contracts may help.

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