James Farmer


Cannabis Bill Not the Right Reform

Wednesday, October 07, 2020
I have previously written about the Cannabis Bill referendum on my Blog on two occasions.  This is the third.   My justification is that the referendum is close and recent public debate has clarified the issues.  The report by the “panel of experts” chaired by the Prime Minister’s Chief Science Adviser and the further report by the New Zealand Drug Foundation also raise concerns as to whether the public is receiving full, accurate and sufficient disclosure of the potential harm that cannabis causes to health, particularly the young.  The distinction between legalization and decriminalization is also not fully appreciated.  Hence this further (and final) posting, which was the subject of a presentation to the Auckland Rotary Club on 5 October.


What those in favour of the Cannabis Bill proposed by the Referendum argue

The principal arguments appear to come down to these:

1. Freedom of choice – smoking tobacco and drinking alcohol is not unlawful and so using cannabis should not be either
2. Cannabis is being used widely now and is said to have one of the highest rates of use in the world – 6% of the population use it daily and 3% weekly.  Users should not be subject to the stigma of criminal conduct
3. Maori, whose criminal convictions for cannabis use are disproportionately high to the rest of the population, will suffer less prejudice in the criminal justice system if cannabis use is decriminalized
4. The adverse career and overseas travel restrictions arising from a criminal conviction for cannabis use are disproportionate.
5. Income and excise taxes on cannabis revenue would (according to economic consultants BERL) generate over a billion dollars which can be used for educational and health measures required to address cannabis health effects.  Regulation would also create 5000 new jobs, essential in a Covid environment. 

The harmful effects of cannabis use, particularly on young people

Even the proponents of legalization of cannabis use admit that it may have harmful effects – the Bill itself says that its intent is “to reduce harms from cannabis use” - though the supporters consistently downplay and minimise those effects.  Thus, nowhere in either the report of the so-called “expert panel” led by the Prime Minister’s chief science adviser Juliet Gerrard or in the Drug Foundation’s publications and Campaign in favour of the Bill is there any mention of schizophrenia as a result of cannabis use by young people or any detail as to what psychotic effects comprises in the broader population of regular users.

In a recent article (3 August 2020) in The NZ Herald, Professor Mary Cannon, Professor of Psychiatric Epidemiology and Youth Mental Health at the Royal College of Surgeons in Ireland, said that, based on extensive medical research, cannabis “is strongly associated with psychotic symptons and psychotic disorders such as schizophrenia”.  She continued: “In fact, cannabis use is now the most powerful single environmental risk factor for psychotic disorder.”  She has also referred to a statement by Dr Brendan Kelly, Professor of Psychiatry at Trinity College Dublin, that: “It is now exceedingly rare to meet a man with new-onset schizophrenia or a related disorder who was not smoking cannabis before he experienced symptons”.

Again based on research, Professor Cannon says that it has been established that young people (teenagers and young adults) are particularly vulnerable because of the effect that cannabis has on the developing brain.   Those who start using cannabis before the age of 15 were found to have 4 times the risk of being diagnosed with schizophrenia by the age of 26.  There was evidence also of an 8 point drop in IQ - that appears to be irreversible - and lesser employment achievement.   Professor Cannon described the psychosis associated with cannabis as one with “high levels of agitation, aggression and paranoia and can present a risk to family and others”.

Professor Cannon is far from being on her own.  A joint review of 18 separate research studies by Marconi, Di Forti, Lewis and Murray (Meta-analysis of the Association between the level of Cannabis Use and Risk of Psychosis, (2016) 42 Schizophrenia Bulletin 1262) established that higher levels of cannabis use were associated with increased risk of psychosis including schizophrenia.

Dr Robin Murray further, together with Wayne Hall, has recently researched the increase in the use of cannabis in those States in America that have legalised cannabis and found that the risk of dependence among those who use cannabis was estimated at 9% in the 1990s but is now closer to 30% with attendant increases in such harmful effects as cognitive impairment and effects on the unborn child by women who use it to combat nausea.  They also refer to evidence of increased risks of depression and suicide but then say that “by far the strongest evidence concerns psychosis [including] an increased risk of later schizophrenia-like psychosis”: Will Legalization and Commercialization of Cannabis Use Increase the Incidence and Prevalence of Psychosis, (American Medical Association, JAMA Psychiatry, 8 April 2020).

Consistently with that, a recent research paper published by Professor Graham Mellsop and others concluded that frequent use of cannabis, which they reported has grown considerably in strength in New Zealand, and methamphetamine in young people in their 20s led to the development of schizophrenia in over 10% of users with a higher proportion of Maori in that number: Mellsop, Tapsell and Holmes (2019) General Psychiatry 32.

An appalling feature about the claim that legalisation will reduce harm from cannabis use is that the harm is grossly underplayed by the cannabis reform lobby.  Patrick Cockburn, writing in The Independent on 22 June 2018, says: “A depressing aspect of the present debate about cannabis is that so many proponents of legalization or decriminalization have clearly not taken on board that the causal link between cannabis and psychosis has been scientifically proven over the past ten years, just as the connection between cancer and cigarettes was proved in the late 1940s and 1950s.”  And, as he also points out, since the time that the message did get through to the public about the link between tobacco and cancer, the number of cigarette smokers in Britain has fallen by two-thirds.

Cockburn’s further point is surely a good one.  He says that “legalisation of cannabis legitimises it and [sends] a message that the government views it as relatively harmless”. 

In this respect, it is concerning that the work of these researchers should be completely ignored by the Drug Foundation and the Prime Minister’s expert panel.  The Chair of the Drug Foundation, Tuari Potiki (who commendably overcame a youth blighted by drug use), in a very recent NZ Herald interview claimed that regular cannabis use “doesn’t cause them any [health] problems”.  Rather, he said, the problems are caused by the law, through criminal convictions, and which he blames for perpetuating the black market.  I will return to the black market later which, in a letter to me from the current Green Party spokesperson Chloe Swarbrick, is said to be principal justification for legalization.

What the Cannabis Bill (if enacted) does and what it doesn’t do

It is an overstatement to say that the Bill legalises or fully decriminalises cannabis.  It does allow cannabis to be purchased by adults up to a maximum daily amount from licensed businesses and to be used by them either at home or at a licensed cannabis cafe.  To that extent and to that extent only and on the conditions as to location of use, the Bill legalises and decriminalises the use of cannabis.

Thereafter, cannabis growth and supply is the subject of a regulatory regime.  Anyone who does not strictly in compliance with that regime remains open to criminal prosecution and sanction.  For instance, a person who sells cannabis without a licence is liable to 2 years imprisonment or a fine up to $100,000. And any person who supplies (whether by sale or otherwise) cannabis to a person under the age of 20 is liable to imprisonment for 4 years or a fine up to $150,000. 

And persons under the age of 20 remain subject to penal law.  They are prohibited from growing, possessing or using cannabis (whether from a legal source or otherwise) and, if they breach that prohibition, may be issued with an infringement notice and ordered to pay an infringement fee of $100 or a fine up to $200.  The infringement notice may however include a requirement for the youth to attend a “support service” and if that is done within the prescribed period the fee is waived and the notice is treated as being revoked. There is thus an incentive on a youth offender to take the option of seeking advice and help from a support service rather than pay a fine or infringement fee.  This is modelled on the 2019 amendment to the Misuse of Drugs Act 2015, to which I will come back.   

The proposed regulatory regime operates at different levels of the supply chain.

First, it allows adults to grow 2 cannabis plants at home (maximum 4 per household) for self-use provided it is out of sight and not accessible from public areas. 

Secondly, apart from that home-grown product, the growth and supply of cannabis must be through a licensed market.  Licensees are vetted for suitability and there is a cap on the amount of cannabis for sale in that market.  No licensee may hold more than 20% of the cap.  The criteria to be taken into account by a proposed Cannabis Regulatory Authority, when deciding which businesses will be given a portion of the cap, are the degree to which the licence applicant represents or partners with communities disproportionately harmed by cannabis, generates social benefit and builds community partnerships or promotes employment opportunities and career pathways.  The unspoken premise of that provision is that those who are presently growing large amount of cannabis will be encouraged to convert their illegal operations into lawfully licensed operations and to take into partnership their local customers who the Bill says are presently being harmed disproportionately 

Vertical integration – based perhaps on the telecommunications and electricity models – is prevented by prohibiting a licensed grower from also being a licensed retailer or the owner of licensed premises where cannabis may be consumed.

Price and quality (i.e. potency limits) are also regulated.  Retailers may not sell cannabis products at a reduced price and the levels of THC (tetrahydrocannabinol), described as “the main psychoactive compound in cannabis” are set by the Authority which, when doing so, must take account of reducing problematic use and preventing overconsumption, providing consumer choice and the existing potency of illegal cannabis.   

That regulation clearly recognizes the fact that there will be competition both as to price and potency between the regulated, legal product and the unregulated, illegal product.  Advertising by licensed retailers is prohibited which means, in that respect, that there will be a level playing field. However, the illegal operators will maintain the competitive advantage over regulated lawful operators of being able, covertly, to undercut the regulated price and to increase the potency of the product.   

The overseas experience of cannabis reform

There are various countries or States that have adopted some form or other of legalization of cannabis use.  The best known are Portugal, the Netherlands, Canada and a number of States in the United States of America.  The measures that have been adopted differ and in some cases the reform is better described as decriminalization rather than legalization.  In the jurisdictions which approximate the New Zealand Cannabis Bill – that is, legalization within the context of a regulatory system in which cannabis can be produced and sold by licensed operators – there have been unintended consequences that run counter to the aims of the reformers.

I will start with North America.

Research in those States in America (nine) which have legalised and regulated the cultivation, supply and use of cannabis have seen a jump in the overall number of deaths from drug use (an increase of 165,000 deaths during the period of cannabis reforms).  This arose because the Mexican drug lords who traditionally supplied marijuana undercut the new regulated product price with heroin, increasing production by 70%, increasing its potency level from 46% to 90% and dropping price (in New York) from $200,000 a kilo to $50,000 a kilo.  This was described by one writer as “classic market economics”.

Another perspective of the American reforms is that, like tobacco and casinos, the emerging American cannabis industry is incentivised to encourage heavy users leading to what one commentator calls “deregulated overconsumption”: Simon Kuper, 26 October 2018, Financial Times.

The Canadian experience to date illustrates the laws of unintended consequences.  A journalist, Mike Power, who had followed the implementation of Canada’s Cannabis Act of 2018 legalising cannabis use, reported recently that the black market in Canada was “still vibrant”: Stoners cheered when Canada legalised cannabis.  How did it go so wrong?, The Guardian, 5 April 2020.

More than that, stocks in firms (described as “vulture capitalists”) that were licensed to grow and supply cannabis at the end of 2019 crashed with substantial staff redundancies. This was true also in the United States with share prices dropping by up to 80%.  The Black Market, it seemed, was very much up to the competitive challenge that the new regulated producers presented.  Power’s account was as follows:

“… the price [of legal cannabis] was almost double that of the illegal market…  That was caused by tax burdens and overheads: the legal market has to comply with regulations on fungicide and pesticide residue levels, and draconian security requirements for grow sites, such as huge vaults in which to store the cannabis and record-keeping for every person who enters these vaults.  The illegal market, meanwhile, is completely unregulated – and thriving because of this. Statistics Canada, a state agency, reports that just 29% of cannabis users buy all of their product from a legal source.”

Power’s conclusion was that the new Canadian drug laws generated “countless unintended consequences – in fact, drugs laws often create the exact opposite outcomes to those desired … ironically, and with a beautifully stoned logic, it turns out that legalizing cannabis in Canada has generated just as many challenges as it solved”.

If we turn to Europe, the two countries most often cited by pro-legalisation advocates as being reform success stories are the Netherlands and Portugal.  However, cannabis use is not lawful in the Netherlands.  Rather for the past 50 years, the State has followed a policy of not prosecuting for use and has allowed it to be sold from so-called “coffee shops”.  Over time, however, that has given rise to concerns at the fact that this tolerance has created an environment that has encouraged the growth and sale (including export to the United States and Australia) of cannabis, methamphetamines and synthetic drugs, initially by gangs assisted by Mexican drug barons but more recently by ordinary people who are attracted to the large profits and the relatively low risk of prosecution: Pieter Tops https://www.dw.com/en/netherlands-the-possible-consequences-of-liberal-drugs-policies/a-51474578.

The Portuguese reforms, enacted in 2001, are regarded as a success story.  This is because there remain legal consequences for personal use but they are consequences that are aimed at achieving harm reduction and treatment.  A person apprehended with drugs for personal use faces one of a number of actions.  He or she may, first, be issued with a written warning; secondly, charged with a fine or, thirdly directed and required to seek professional help from a local commission comprising doctors, lawyers and social workers and who also have access to support services.  This was accompanied by a deliberate Government decision to increase funding of the health sector – not, as proposed in New Zealand by relying on taxes from the revenues of drug sales to fund treatment of the increased use that legalization inevitably leads to.  The effects of the reforms has been decreased use among the general population and among teenagers and young adults in particular, considerably lower numbers of drug-related deaths and a significant reduction in drug-related crime rates: https://canex.co.uk/why-is-portugals-unique-drug-policy-working/.

The 2019 amendment to the Misuse of Drugs Act 2015

A health-focused solution, but via the deterrence and incentivisation (to seek assistance) of the criminal law, is in fact available now in New Zealand, a fact that scarcely rates a mention in the current public debate leading up to the referendum.  In August of last year the Misuse of Drugs Amendment Act was passed, inserting section 7(5) and (6) into the principal (1975) Act.  This directs the Police not to prosecute drug users (of all kinds) where prosecution is not in the public interest.  In determining that question, regard must be given to whether a health-centred or therapeutic approach would be more beneficial to the public interest in the particular case than criminal punishment.

The proposed Cannabis Bill, as previously referred to, adopts a similar concept in the case of persons under the age of 20 years who will be prohibited from growing, possessing or using cannabis.  A youth who breaches that provision will be issued with an infringement notice and ordered to pay an infringement fee of $100 or a fine of up to $200 (presumably for repeat offenders).  However, the infringement notice may include a requirement to attend a support service and if that is done within the prescribed period the fee is waived and the notice is revoked.  It is said that this process will not lead to a conviction.

That provision surely provides a surer incentive to a health-centred outcome for those who are using and in danger of harm from cannabis use.  The Police are already taking a hard line on the enforcement of existing laws against the manufacture, growth and supply of harmful drugs (including cannabis).  If they need more resources to be more effective, they should be given them.  The exercise of their discretionary powers under the 2019 Amendment should be encouraged and their effectiveness monitored.

There have been complaints about the conduct of the Police, both historically in relation to Maori by reference to unconscious bias, and to the initial operation of the 2019 amendment.  Information obtained by the NZ Herald under the Official Information Act indicates that, since the amendment, there has been “a significant drop in police prosecutions for drug use and an increase in warning and alternative resolutions” including Youth Aid referral, family group conferences, alternative action plans, community justice panels or simply no further action.  The number of prosecutions has dropped by over 20% and the number of people who have been sentenced to jail has reduced by 80%.  However, the proportion of Maori drug users apprehended by the Police has remained constant which has led to those favouring legalization to claim that only that will “even the legal playing field and quash the biased application of the law against Maori”: Derek Cheng, NZ Herald, 2 October 2020. 

The Police response to those claims is that the problem of unconscious bias exists but that a programme of education and training has begun.  That must surely be the place to start to deal with Maori criminal conviction disproportionality, which is not on the statistics confined at all to cannabis offences and which no doubt requires a wide variety of both social and legal reforms.  Using that problem to support the Cannabis Bill without regard to the many other facets, especially those relating to harm to health is myopic and illogical.   


Convicting and sending users of cannabis to prison in circumstances where there is no related criminal activity can legitimately be questioned.   That is the very question raised and addressed by the 2019 amendment to the Misuse of Drugs Act.  Retaining the possibility of a criminal conviction may arguably be justified on the basis that its existence provides a more powerful incentive to chronic users to agree to undertake rehabilitation, counselling or other remedial course.

The other alternative – which on balance I would prefer – is the Portuguese model of mandatory submission to a health-focused commission or panel of professionals, non-compliance with which would be an offence punishable by a fine or community service or both.

Neither alternative requires legalization of cannabis use.  At most it requires decriminalization.  Nor does either alternative require revenue-raising from licensed cannabis growers and retailers, whose profit maximization incentive will inevitably lead to greater cannabis use in the community and with that greater harm.   

If there truly is a common and informed consensus on all sides of the cannabis debate that there is serious harm to our youth in particular, the community will support the provision of adequate resources to the Police to combat the black market, to recognise and address any unconscious bias against Maori and also for the Ministry of Health to provide the required health and educational measures.   

We have poured substantial resources into the attempt to establish New Zealand as a more health smoke free country by 2025. Conscious of the health risks of tobacco, the public has got behind this and, as in other countries, there are significantly fewer people (and in particular young people) who smoke today.  What is the logic in replacing that with the promotion of cannabis use and the increased harm to health that it entails?

Jim Farmer 

7 October 2020 

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