However, those hoping that New Zealand represents a significant opportunity for cannabis brands will be disappointed by the tight restrictions put forward for the sale and promotion of cannabis products. The bill allows for standardised product packaging, including a uniform colour, size and font and mandatory health warnings. This is on top of an outright ban on all marketing and advertising, promotional discounts, and the prohibition of licence holders from sponsoring organised activities in New Zealand. Even more dramatically, the draft Bill appears to prevent retailers from displaying any cannabis, product packaging, smell jars or even images inside their stores - with retailers permitted only to present, upon request, the products available and their price.

Furthermore, the Bill states that maximum limits on THC will be established. It’s unknown whether this would be applied in milligrams or as a specified cannabis ratio, and whether this would apply uniformly across product categories. While capping THC is a popular idea in public health circles, future regulators will need to strike a very careful balance to ensure that limits don’t discourage consumers switching from unregulated to regulated markets. It’s also unclear how such a cap would work for high-THC products such as resin and concentrates permitted under the Bill.

However, perhaps the most significant announcement is that total cannabis cultivation will be capped to a specific level nationally, with a view to reduce this figure over time. This is a major contrast to Canada, where the regulator does not make licensing decisions based on market conditions or a desired end state. Capping and reducing output may lead to two undesirable outcomes in particular: a race to secure licences (potentially simply to flip them) without regard to a sustainable industry development, and a general under-investment in cultivation and manufacturing: after all, why invest millions in research, infrastructure and workforce training if you don’t even know the permitted future size of your operation?

The draft Bill still leaves a lot of questions unanswered, particularly in terms of licensing requirements, production standards and taxation levels, as well as the future regulatory status of CBD. The proposals also say very little at this stage about social equity provisions and Maori engagement, although a full draft Bill is due to be published in early 2020.

As for now, the release of the draft Bill allows legalisation advocates to point to concrete proposals when campaigning, to help counteract the scaremongering and hyperbole employed by some in the prohibitionist camp. This should drive engagement with the issue, and may help to reverse the declining support for legalisation seen in public polling this summer. As of yet however a clear, unified pro-legalisation campaign has not emerged, and it cannot be assumed that the Referendum is a guaranteed win.

To find out more please contact our consultancy team at info@hanwayassociates.com