The new just announced regulatory scheme for cannabis based medicines is generally positive. But the government may be significantly underestimating the demand for licenses, raising the spectre of an underfunded industry regulator.

What is good about the new regime is the requirement that medicinal cannabis producers meet Good Manufacturing Practice (GMP) quality thresholds. This will ensure cannabis-based medicines meet the same high standards as all other pharmaceutical products. That high quality standard will be good news for patients. Provisions allowing  the rapidly developing industry to access the vast knowledge and cannabis cultivars that already reside in the underground medical cannabis community are both positive and sensible. And the licence fee structure being proposed is broadly supportive of the industry and should not inhibit its development.

The Ministry of Health says its expects to issue 110 medicinal cannabis licences in the first year, while at the same acknowledging the inherent difficulty in estimating the number of industry participants in what is an emerging NZ industry. There has to be some concern, therefore, that the Ministry of Health may not be able to cope any unexpected surge in licence applications. Moreover, there is the additional risk the Ministry may have underestimated the time and cost of monitoring - especially planned and unplanned surveillance audits – and subsequent enforcement action where breaches and/or illegal activities are identified. It would be a major concern if the implentation of the new regime were to fall down or become subject to substantial delay because the regulator’s office was inadequately resourced.

However, so long as long as the government remains committed to quickly resourcing the new regulatory agency to meet actual demand, then the regime should be introduced relatively smoothly. But, the absence of appropriate resourcing would likely create a significant bottleneck to industry growth, especially if the numbers of applications are consistent with market expectations and not the Ministry’s more conservative estimates.

If there are bottlenecks which lead to significant delays New Zealand patients will be the loser. At best, this will mean local patients will be paying more for relatively expensive overseas products. At worst, patients with limited financial means may continue to suffer unnecessarily or turn to the black or grey market,which is precisely what the Ministry is trying to avoid.

One disappointment is that that the government has decided to leave the cannabis extract Cannabidiol (CBD) as ‘Prescription Drug’ rather than ‘Pharmacist Only’. CBD is non-psychotropic and non-addictive and there is a strong body of evidence that it can provide safe and effective relief for a number of conditions including inflammatory pain and sleep disorders. It has been reported that 230,000 New Zealanders were prescribed drugs for sleep disorders in 2018, and with an estimated 700,000 New Zealanders suffering from arthritis, there is a strong and growing demand for cannabis-based alternatives to mainstream drugs, which can be addictive and cause unwanted side effects. CBD products have a role to play here, and it is to be hoped that they will become generally more available both as ‘Pharmacy Only’ medicines and eventually as ‘Over The Counter’ (OTC) medicines, depending on their potency.  

Overall, the new scheme will open the door to offering many New Zealanders relief from chronic pain and other symptoms, with non-addictive cannabis-based medicines. Cost-efficient New Zealand medicinal cannabis producers should enjoy a strong cost advantage and, in some cases, quality advantage relative to offshore-based providers of these cannabis-based medicines.

While the potential is there to establish a quality cannabis based medicines industry in New Zealand, progress could still be frustrated if the government does not put in place the appropriate infrastructure and oversight to allow medicinal cannabis products to be developed and brought to market in a timely manner. It has already taken two years to achieve regulatory certainty, and there is no excuse for further delay or uncertainty.

By way of disclaimer, I am Chair of SETEK Therapeutics, one of the new companies becoming involved in this market. SETEK is a New Zealand owned bioscience company looking to cultivate, process and manufacture pharmaceutical grade, pure organic, cannabis-based medicines and cannabis-infused skincare and wellbeing products for New Zealand, Australia, the Asia Pacific region and beyond.

My comments, however, are made from the perspective of someone with a long interest in this issue, who began the process of making access to cannabis based medicines more available to New Zealanders over five years ago (including declassifying CBD under the Misuse of Drugs Act), and who is generally pleased with the progress made subsequently. Interest, tolerance and understanding, both within government and the public, have grown considerably in that time, and the opportunity now exists to establish a viable cannabis based medicines sector in New Zealand.

On that note, Dunne Speaks takes its leave for 2019. Best wishes to everyone for a safe, and happy Christmas with family, friends, and those dearest to you. 2020 will offer a whole fresh set of challenges and opportunities, and Dunne Speaks will be back in a few weeks to comment on those as the year unfolds. Meantime, Merry Christmas!

Britain votes today in an election brought on by the ongoing failure of the House of Commons to approve any of the Brexit deals put before it over the last couple of years by successive Prime Ministers, Theresa May and now Boris Johnson. Mr Johnson will be hoping his gamble to call an early election will pay off and that he will be able to honour his latest commitment to the British people to leave the European Union by the end of the coming January. But whether even a decisive election outcome will help heal the divisions that have exploded in Britain since the 2016 referendum, and now threaten the very survival of the United Kingdom, is doubtful.

There has been another aspect to this election that has been significant. Jeremy Corbyn’s Labour Party has been campaigning to end what it describes as the austerity of the last decade by promoting the most left-wing manifesto published by Labour since 1945. It even surpasses Michael Foot’s 1983 effort, now remembered as “the longest suicide note in history” which contributed to Labour’s landslide defeat by a Margaret Thatcher rampant after recapturing the Falklands Islands a year earlier. Time will tell whether Mr Corbyn can buck history, or whether a similar fate awaits him this election.

The relevance of this to New Zealand was highlighted by the Greens’ announcement earlier this week that they will no longer be bound by the Budget Responsibility Rules they agreed with Labour before the last election to stave off allegations that they were too profligate to be trusted in government. The Rules were designed to show that both Labour and the Greens could act responsibly in office, and to pacify sympathetic but edgy voters that they would mismanage the economy, if put in charge.

Now, the Greens say the rules are too restrictive, stopping the government at a time of record surpluses from investing the amounts they see as required to overcome local rising social and infrastructure deficits – from increasing child poverty levels to upgraded schools and hospitals. As well, even Labour, after a similar two years of criticism from its core supporters that it is being too stringent, is looking to loosen its purse strings and considerably soften the self-imposed Budget Responsibility Rules.

In so doing, both parties will be hoping to regain some momentum towards becoming the “transformational” government they jointly pledged to become at the last election. But the Finance Minister will not abandon fiscal restraint altogether, as, like Finance Ministers before him, he has developed the acute sense of parsimony that goes with the job. Nevertheless, as Labour enters election year it can be expected to become considerably freer with its spending promises than it has been so far. Even more freed of the restraint of the Budget Responsibility Rules the Greens can be expected to go full Corbyn now when it comes to spending promises. Between them, both look like offering a veritable cornucopia of expensive election goodies for voters to drool over.

National will be rubbing its hands in glee at the prospect of at last facing unashamed real tax and spend parties at the election, but they may need to tread a little carefully. If, as Jeremy Corbyn is so obviously hoping in Britain, the public reaction against government restraint has built up to the extent that voters are now prepared to indulge in a splurge of public spending and mounting debt, based on selective discriminatory tax increases on others, National may quickly find that being the harbinger of fiscal responsibility is not the winning card it once was. After a decade of relative stability and steady although modest income growth, voters may indeed be willing to kick back their heels somewhat come election time. In such circumstances, it will without hesitation and quickly and shamelessly seek to outspend Labour and the Greens. And we will end up with potentially the biggest election auction of recent times, possibly even since 1957 and Labour’s infamous final campaign advertisement “Do you want 100 pounds or not?”.

With the ongoing international economic uncertainty caused by Britain’s dithering over Brexit, through to having to pay for yet another visit here by a member of its Royal Family, New Zealand has not had much to be grateful to Britain for in recent years. It may have even less to be pleased about should Mr Corbyn emerge as its next Prime Minister and the contagion he unleashes spread to our shores.

There is an element of the proverbial curate’s egg in the government’s proposed recreational cannabis regime. It is good in parts, and not so good in others, but overall leaves a somewhat underdone impression.

For a start, it is good that the government has spelled out the basis of a comprehensive regime to govern a recreational cannabis market, should New Zealanders vote for it at next year’s referendum.

But herein lies the first problem. Although the government has attempted to spell out a recreational cannabis regime in detail to provide certainty and clarity in advance of the referendum vote, the legislation it is proposing will not be introduced to Parliament until and unless there is a positive vote for change in the referendum. That means there is no guarantee, whatever government is in power in 2021, that the legislation will be introduced as announced now, or immediately after the election, or even at all. Nor does it ensure that it will not be substantially amended as a result of a select committee process. So, the final outcome may end up nothing like what people thought they were voting for.

A more practical problem is what happens between the referendum and the passage of the legislation a few months later? It will be a messy hiatus. Will the Police apply the current law during that time, or just ignore it? How will those currently enjoying a puff in the park or at the beach react when they realise they will not will be able to do so under the new law? That proposes making smoking cannabis in public places illegal. So it will actually be more restrictive than what they are used to. How will the Police react to the new law? Whatever happens, it is likely to be a very messy interlude.

A preferable, clearer and far more certain outcome would have been for the government to have legislated all the details of the recreational cannabis scheme before the referendum, so that people know exactly what they were voting for. If the referendum passes, the new law could take effect immediately. That way, there would be no messy transition, and everyone would know exactly where they stand from the day after the referendum. It is hard to fathom why the government did not pursue this option, unless New Zealand First had made it clear it did not want to be seen as supporting a recreational cannabis regime by voting for enabling legislation before the referendum. If that is the case, then it is hard to see that party – should it still be in Parliament after 2020 – supporting the relevant legislation then, thus adding more uncertainty.

On the whole, the actual regulatory regime proposed is surprisingly conservative, which should assuage some of the likely public concern. However, it is not without some problems.

The first is one of context. The cannabis regime is harsher than that for alcohol, tobacco and vaping. For example, it is currently legal to purchase alcohol, tobacco or vaping products at the age of 18, yet the government is proposing, for what it says are sound public health reasons, an age limit of 20 years for cannabis. In so doing, is it, undoubtedly unwittingly, risking making drinking, smoking and vaping more attractive to 18-20year olds than cannabis consumption, and is that a sensible move?

Then there are the issues around the amounts of cannabis one can possess. The 14gram daily purchase limit, allegedly the equivalent of 42 cannabis joints, seems extremely high, and listening to the Justice Minister’s explanations of how the limit was arrived at, to be based on pretty flimsy evidence. Presumably this matter will be tidied up and the figure reduced as a result of the round of inter-party discussions now getting underway. If not, it risks becoming a major distracting point of controversy during the coming debate.

Associated with this is the issue of quality control for cannabis plants grown for personal use. The Minister says that the new Cannabis Regulatory Authority will set quality standards as to potency and risk for manufactured products to protect the public safety. That is a good and sensible move, to be applauded, but how will the same standards be applied to plants grown at home? Unless the origin of every single plant grown at home is checked and verified, which is absolutely impossible to achieve, there can be no guarantee on this score.

Our drug laws are past their use-by date. Significant change is required, and the referendum process provides the opportunity to initiate that. But the heavy weather the government has gone through so far raises concerns that this could be yet another instance where its bold plans fall down on the implementation details.

It seems to be placing all its hopes on the referendum passing. But what if it does not? We also need to know what the government’s plans are should the referendum fail. Will, the current unsatisfactory situation be allowed to just drift on; or, does the government have something else altogether in mind? Whatever, the public needs to know both sides of the equation, so that it can weigh up all the options and make a balanced decision, come the referendum.

The government deserves credit for taking a serious approach to the issue and seeking to engage the public in its resolution. However, its ponderous approach so far means there can as yet sadly be only limited confidence that it will succeed.