Next Investors logo grey

New Zealand relaxes medical weed laws, mulls over recreational use

Published 20-DEC-2018 09:22 A.M.


4 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

New Zealand is set to hold a binding referendum on personal weed use at the 2020 general election.

Justice minister, Andrew Little, told reporters on Tuesday that the results would be binding, although he noted that there was still “a bit of detail still to work through,” particularly regarding how the question would be worded.

A cannabis referendum was promised as part of a deal by the Labour Party to get support from the Green Party to form a government after last year's general election, and MPs have been deliberating the specifics in relation to timing and conditions.

Prime minister, Jacinda Ardern, remained tight-lipped about which way she would vote, saying it depended on the question itself.

A vote in favour of legalisation would make New Zealand the first Asia Pacific country to allow recreational pot use. It also be the first country to put the issue to a nationwide vote — a rather different move in terms of cannabis advocacy.

This comes a week after MPs passed a bill that makes medicinal cannabis more widely available and sets up a licensing scheme for commercial growing.

The bill will allow terminally ill patients to smoke marijuana without fear of legal prosecution. Rules for wider use will be formalised over the next two years.

The law changes also pave the way for New Zealand companies to manufacture medical marijuana products for both the domestic and overseas market.

This move not only turns a previously illegal activity into a source of tax revenue but, according to The Guardian, could also be game-changing for the deprived Māori communities on the east coast of the North Island, who are hoping to turn the previously illegal industry into a thriving legal one.

Police, meanwhile, have recently been ordered to ease off laying charges against those arrested solely for possession of any drugs in what the government says is a shift towards a health-based approach to substances.

It might actually come as something of a surprise that full legalisation of pot in New Zealand hasn’t already happened. The country tends to be renowned for being socially progressive, with previous governments having decriminalised sex work and legalised same sex marriage.

However, neither of the two major parties — centre-left Labour (which leads the current government) or centre-right National — has previously been willing to touch the subject of recreational weed.

Support for loosening rules around recreational pot use has grown in New Zealand, with a survey by the Drug Foundation this year showing two-thirds of people supported either legalisation or decriminalisation.

Weed is commonly used in New Zealand and nearly 39% of Kiwis who took part in the 2017 Global Drug Survey said they had used it in the previous year.

Small-scale, personal use is largely ignored by the police — however, as in the US, studies have shown that minorities are more likely to be arrested and prosecuted for it.

Chloe Swarbrick, Green Party lawmaker who has advocated for legalising the drug, said the party was "stoked" with the news and encouraged Kiwis to vote "three ticks Green" in 2020.

“We've long advocated for a binding referendum with legislation setting out a clear, evidence-based regulatory framework. That way, we avoid a Brexit-type situation figuring out what a 'yes' vote means after the fact, and cut grey moral panic from the debate.

"Illegal substances are exactly the opposite of controlled substances. Cannabis needs to be regulated,” Swarbrick posited.

Swarbrick said New Zealand should look at best practice from around the world. "We don't have the re-invent the wheel here, because we have the opportunity to look at best-practise frameworks around the world that minimise harm."

"We want to avoid a scheme that repeats the problems we have with the alcohol industry or with corporate pharmaceuticals. Any model that prioritises profit – whether in the black market or by big business – typically puts people and safety second. We want community control and regulation that reduces harm."

If more than half of voters taking part in the referendum support legalisation, New Zealand will join the tiny crop of countries that have fully legalised cannabis use — namely, Canada and Uruguay. Several US states have also legalised recreational usage, although it remains illegal on a federal level.

Most recently, Donald Trump is this week expected to sign a bill that will end the prohibition of hemp — a critical step as US weed culture rapidly enters the mainstream. That, in turn, would create a legal market for CBD that could be worth more than US$20 billion by 2022, according to research firm Brightfield Group.

Dozens of other countries and states have decriminalised recreational use, legalised medicinal marijuana or eased enforcement of possession laws.

Medical cannabis legalisation is spreading around the world like wildfire, with UK and South Korea being some of the most recent nations to have cottoned on.

Medical marijuana has been legalised in Australia but remains a bureaucratic labyrinth to access in practical terms. Yet while Australia has the highest rate of pot users in the world, legalisation of recreational use is still very much a pipe dream, so to speak, with some advocates saying this is at least five years away.

According to a report by New Frontier Data, if this were to happen, the total Australian market would be worth $5.5 billion annually.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.