A “not-for-profit” regulatory model for legal recreational cannabis: Insights from the regulation of gaming machine gambling in New Zealand

Assessing New Zealand's Cannabis Legalization and Control Bill: prospects and challenges

BACKGROUND

Few countries have developed detailed legislative proposals for legalizing cannabis. New Zealand recently released the Cannabis Legalization and Control Bill (CLCB) that will be the subject of a referendum in September 2020.

AIMS

To assess the CLCB, drawing on emerging evidence from cannabis legalization overseas, public health research on alcohol and tobacco and the attempt to establish a regulated market for 'legal highs' in New Zealand.

DISCUSSION

The CLCB proposes a strictly regulated commercial cannabis market that resembles the Canadian approach, but notably without on-line sales or regional heterogeneity in retail distribution. The objective of the CLCB of lowering cannabis use over time appears at odds with the largely commercial cannabis sector that will focus on expanding sales. The CLCB includes provision for home cultivation and social benefit operators, but it is not clear what priority these operators will receive. A potency cap of 15% tetrahydrocannabinol (THC) for cannabis plants is included, and this is at the high end of black-market cannabis. The proposed progressive product tax based on THC will be challenging to implement. There is no formal minimum price, but rather discretionary powers to raise the excise if the price drops too much. The CLCB includes a comprehensive ban on advertising, but non-conventional on-line promotion will be difficult to suppress. The central government cannabis authority is tasked with developing local retail outlet policies. We caution against the temptation to employ an interim regulatory regime following a positive referendum result, because a partially regulated market will expose users to health risks and undermine public support.

CONCLUSIONS

New Zealand's Cannabis Legalization and Control Bill's objective of reducing cannabis use via a commercial market will be challenging to achieve. The bill could be strengthened with formal minimum pricing, lower potency cap and greater clarity concerning social benefit operators and the role of local government.

"You have to make some money before you can do some good": Balancing the commercial, social and public health objectives in a "community enterprise" regulatory model for alcohol and cannabis

INTRODUCTION

New Zealand's alcohol licensing trusts are social enterprises that operate retail alcohol outlets in their districts and distribute profits back to the community. There have been calls for a similar "social enterprise" approach to legal cannabis sales. However, social enterprises face unique challenges in balancing commercial and social objectives.

AIM

To explore mechanisms that support the balancing of commercial, social and public health objectives in alcohol trusts and identify learnings for cannabis reform.

METHOD

Thematic analysis of interviews with 16 internal and external key informants (trust board members, trust retail managers, community activists, law enforcement) from two alcohol trust districts.

RESULTS

Key informants overwhelmingly conceptualised alcohol trusts as business entities, but commercial success was also seen as a means to help the community. Interviewees' perceptions of trusts' social mission ranged from simple "corporate social responsibility" to a "genuine" community orientation. Despite a near-monopolistic market position, forces within and outside the trusts create pressures to conform to standard commercial behaviour, including strategic placement of alcohol outlets. Participants attributed the potential public health benefits of the trusts to reduced density of alcohol retail outlets and ease of enforcement. The pragmatic political goal of maintaining a favourable public image (to secure survival of the trust and re-election of individual trustees) was the key mechanism balancing commercial and social objectives. Ethical dilemmas related to the sale of alcohol and conflicts of interest in allocating community funds were evident. Discord was "negotiated" with the community via the public discussion and voting, providing opportunity to correct mission drift.

CONCLUSIONS

The need to maintain a positive public image (to ensure favourable electoral results) was a key mechanism helping to balance the commercial and social goals of alcohol trusts. A community trust model for retail cannabis sales could similarly provide constraints on commercial behaviour while funding community services.

Cannabis policies in Canada: How will we know which is best?

BACKGROUND

The recent legalisation of cannabis in Canada by the Federal Government, along with the accompanying laws and regulations of provincial and territorial governments provides an opportunity to assess the expected benefits and harms of legalisation. While the legislative changes have been initiated by the federal government, much of the responsibility for the implementation falls onto the provinces and territories. These jurisdictions are responsible for regulating the wholesale distribution, retail structures, cannabis consumption, as well as a host of other regulations.

METHODS

Key characteristics of policies outlined are categorised according to a framework previously developed by the authors (2018). The categories are: (1) government regulation or control, (2) social costs that accompany its use, and (3) legal sanctions that accompany its production and use. Towards that end, we develop a framework for a cost benefit analysis (CBA) outlining in some detail the data that is needed to undertake a credible economic evaluation of cannabis policies.

RESULTS

Key data issues discussed include consumer surplus, government receipts including legal and regulatory costs, impact on substitutes, change in profits to firms (growers, wholesalers, and retailers), incomes earned in the industry, health and other costs incurred by cannabis users.

DISCUSSION

This paper presents a summary of the expected categories of costs and benefits given the various provincial cannabis policies. Additionally, it provides a framework for subsequent cost benefit analyses which can quantify said harms and benefits.