October 30th, 2020
Conor O’Brien
**Update** As of the final vote count released on the 6th of Friday, the results are: 48.4% Yes, 0.9% informal and 50.7% No, which confirms that the legalisation bill in New Zealand has been rejected.
Results:
A total of 53.1% of voters voted against the Cannabis Legalisation and Control Bill which would legalise the sale and consumption of adult use cannabis in New Zealand. In the referendum results released on Friday, the No vote led by 167,333 or ~7% of the votes. These results are preliminary and do not include the estimated 480,000 Special votes which are yet to be counted. Special votes are the votes which were not taken at a designated voting place, or were not on the printed electoral roll, such as those votes coming in from abroad or those sent in from prisons and hospitals.
Source: electionresults.govt.nz
Special votes are generally considered to be left-leaning, meaning a majority of these are likely to be Yes votes. However, over two thirds of these votes would need to support the draft bill in order to obtain a majority and this is relatively unlikely to be achieved. The final results will be announced alongside the official results of the general election and referendum on euthanasia next week.
Prominent proponent of the Yes vote and member of the New Zealand Parliament Chloe Swarbrick has said “we need to wait for the specials to be sure of the result” and that “many who have traditionally felt disenfranchised by the political system may have their voices heard at the specials. We’ll wait to see how that plays out next week”.
What happens now?
In the case of a final No vote being announced next week, the current prohibition on adult use of cannabis will be maintained until another referendum occurs or the law is changed by the New Zealand legislature which would likely take several years.
In the case of a Yes vote, the results of the referendum are not binding. That is to say that the government is not legally obligated to enact legalisation of recreational or adult-use cannabis in the case of a Yes vote. However, Professor of Law Andrew Geddis of the University of Otago said it would be “pretty hard for them not to act” on a strong majority yes vote. In that case, it is highly likely that the draft bill would be introduced to Parliament and passed under in the incoming government.
What was in the bill?
The Cannabis Legalisation and Control Bill contained a number of measures which would regulate adult-use cannabis in New Zealand while introducing measures aimed at reducing harms caused by damaging use of cannabis as well as use by minors.
The bill would have allowed 20+ years old to:
- Purchase a maximum of 14g per day from licensed establishments (not online or remotely)
- Grow up to two cannabis plants for personal use on their own property, up to a maximum of four plants per household
Other measures include:
- The establishment of a state licensing regime under a newly formed Cannabis Regulatory Authority.
A ban on advertising and inclusion of health warnings on packaging. - The application of an excise tax and a harm-reduction levy to cannabis products (in addition to the 15% GST which applies to all goods sold in New Zealand)
- Controls on the permissible THC content
Cannabis still hugely popular among New Zealanders
Cannabis is New Zealand’s most commonly used illicit drug, and the latest New Zealand Health Survey found that 15%, or 590,000 New Zealand adults used cannabis in the past 12 months. A study commissioned by the Ministry of Justice found that around NZ$1.5 billion or US$1 billion dollars were spent on black market cannabis every year in New Zealand. The report further estimates that under a legalised industry, NZ$640 million of excise taxes and NZ$180 million of goods and service taxes.
Cannabis for medical purposes is legal in New Zealand under the Misuse of Drugs (Medicinal Cannabis) Regulations. The medical cannabis scheme is still at an early stage of development. Patients may be prescribed cannabis medications under one of the following conditions:
- The product is an approved medicine under the Medicines Act 1981. Only Sativex has this approval
- The product meets the “medicinal cannabis minimum quality standard”. While some products are in the application stage, none are approved
- The Minister of Health approves the use of a product for a named patient. Prohibition Partners have learned through communication with the Ministry of Health that 255 patients were actively receiving cannabis medication via this route as of September 2020.
A Yes result in this referendum would have represented the first time a country had voted to legalise adult use cannabis. While Uruguay and Canada both have legal and regulated adult use markets, both were enacted by the legislature rather than popular vote. Nine states in the US have in the past voted to legalise the adult use market, and the issue is on the ballot for four more in this general election. Final results for the NZ referendum will be announced on the 6th of November.
For more in-depth information, market data and strategic support, contact the Prohibition Partners consultancy team at info@prohibitionpartners.com or download one of our industry-leading reports.
*Informal votes are those which did not clearly indicate a preference
