‘This isn’t going to be a lolly scramble’
Why running your own cannabis business won't be easy
Starting a recreational cannabis business won’t be as easy as buying a few planters, seeds and soil from your local Bunnings. The Government’s Cannabis Legalisation and Control Bill proposes strict regulation, covering everything from cultivation and testing to retailing and advertising.
There are 10 activities listed under controlled activities in the draft legislation. To engage in any of these activities, you’ll need to acquire a licence from the Cannabis Regulatory Authority (yet to be formed).
Importation, cultivation, production, testing, researching, wholesaling, retailing, operating a business, transporting or even the destruction of cannabis will require the appropriate authorisation from the authority.
If, for instance, you do not have the necessary licence to cultivate then the standard personal use rules apply, imposing a strict limit of two plants on a property per person older than 20. If there are two or more people living on the same property aged older than 20, then the limit is a total four plants — hardly conducive to a burgeoning cannabis enterprise.
Rather than bemoaning the severity of the regulation, business executives on the medicinal side of the sector have welcomed the response from the Government.
“This is very important as a lack of a clearly defined framework of how a regulated adult-use market in New Zealand would function creates confusion,” said Cannasouth cofounder Mark Lucas.
“The medicinal cannabis industry and voters need clarity of what a yes vote means and it is pleasing to see the Government beginning to provide that.”
Helius Therapeutics co-chief executive Paul Manning, who like Lucas has had to go through the rigmarole of applying for licensing on the medicinal side of business, sees the strict regulatory steps as a positive. “This isn’t going to be a lolly scramble,” he says.
“It’s going to be really tough for operators to get into the system, but once they do there could be a number of opportunities.”
Cannabis cafes, dispensaries and farms are among the more obvious, but Manning looks beyond these and sees business opportunities throughout the supply chain — some of which are, in fact, created by the regulations.
The bill’s proposed limitations on the potency of cannabis products, for instance, create opportunities for research experts to establish testing facilities to ensure standards are met.
There will also be opportunities on the research and development side and for horticultural experts who may want to lend their skills to the sector.
This, says Manning, will all play a role in ensuring that consumers are better placed to make informed decisions rather than relying on the vague promises of a street dealer.
Once all the regulatory steps have been met and a retail premises has been established, one of the biggest challenges a business could face lies in the total ban on advertising.
The limitations in this regard are akin to those applied to tobacco products in that there are rules regarding the display of products.
As Andrew Little explained: “The primary objective of the legislation is to reduce overall cannabis use and limit the ability of young people to access cannabis.”