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Totes OK? Implications of the Cannabis Legislation and Control Bill

In this article we set out the fundamental aspects of the draft Cannabis Legislation and Control Bill (the Bill) to ensure that you are fully informed to make a decision on the ‘Cannabis’ referendum on 17 October 2020.

Totes OK? Implications of the Cannabis Legislation and Control Bill

There is no doubt that 2020 has been a tumultuous year to say the least and change is still afoot. As part of the general election process New Zealanders will vote on the ‘Cannabis’ referendum and ‘End of Life Choice’ referendum.

The first thing that most people will tell you about the Bill is that it legalises cannabis – but it is not that simple. The Bill proposes:

  • ONLY licensed outlets would be able to sell cannabis;
  • People aged 20 and over can:
    • buy up to 14 grams of dried cannabis per day;
    • possess up to 14 grams of cannabis and consume cannabis legally; and
    • grow a maximum of 2 plants each (with a household maximum of 4 plants).

Who can sell cannabis?

The Bill looks to control all aspects of the cannabis supply chain. In deciding whether to issue a cannabis licence a (yet to be formed) regulatory body would have to assess an application with certain criteria in mind, including:

  1. The purpose of the Bill (Act if passed into legislation);
  2. The suitability of the Applicant;
  3. The days and hours during which the Applicant proposes to sell cannabis;
  4. Whether the amenity and good order of the locality would be likely to be reduced, to more than a minor extent, by the effects of the issue of the cannabis licence.

Those familiar with alcohol licensing will notice that these criteria are very similar to those set out in s 105 of the Sale and Supply of Alcohol Act 2012 (the SSAA). Section 105 lists the criteria that a district licensing committee must consider when deciding whether to issue an alcohol licence. It will be interesting to see to what degree case law decided under the SSAA can be applied to issues which could arise under the Bill if it is indeed passed into law.

Police vetting would also be included in the process of deciding whether to issue a cannabis licence and the Bill will include a Schedule which sets out persons ineligible to be licensees. Local communities would also have an opportunity to comment on policies on licensed premises and make submissions on licensing applications.

Considerations for Employers

Employers must act in a fair and reasonable manner when interacting with their employees. Part of this is respecting the privacy of an employee. Testing employees for substance impairment is a breach of their privacy, but can be justified in light of health and safety and/or performance concerns in limited circumstances.

There is a limit to what kind of testing an employer can conduct and it depends, to a large extent, on the role that an employee is expected to carry out. Random testing is not allowed by law unless an employee occupies a safety sensitive role. Such a role is where impairment of the employee could jeopardise the health and safety of other employees, the general public or the employee in question. THC is the psychoactive ingredient in cannabis which produces the sensation of being “high”. It is the presence of THC that will be tested for when assessing whether an employee exceeds a certain limit or breaches a no-tolerance policy.

In general, workplace drug and alcohol policies may set out testing in the following circumstances:

  • Pre-employment testing;
  • “Reasonable cause” testing – where the employer has grounds to believe that the employee is demonstrating indicators of impairment; and
  • Post-accident/near miss testing

Employers retain the right to prohibit the use of cannabis at work or during work hours and prohibit employees from attending work while impaired. To establish whether an employee is impaired, testing will need to be based on one of the legal grounds set out above. Testing should be conducted in accordance with an employer’s drug and alcohol policy.

Complicating factors

A reliable test for impairment is not yet available in New Zealand. Likewise, research into non-invasive oral testing for THC presence is taking place but this method of testing is reportedly still some way off providing accurate results. At this stage, employers are urged to have defined limits of what levels of THC in an employee’s system will breach their workplace policy. Guidance will likely be provided in accompanying regulations.

Medicinal use

It should be made clear that the Bill would legalise recreational cannabis. Under the Misuse of Drugs (Medicinal Cannabis) Regulations 2019 (Regulations) individuals can already obtain a medical prescription for cannabis. The Regulations have strict standards around the strength, packaging and labelling of medicinal cannabis. Under the Regulations an applicant can apply for a licence to manufacture, supply and/or cultivate medicinal cannabis. Medicinal cannabis is typically used for pain relief and contains limited THC so it is generally accepted that medicinal cannabis will have less of an impairing effect than recreational cannabis.

Despite this, from an employment perspective medicinal cannabis should be treated like any other prescription medication. Employers should include a question in their pre-employment application form asking employees to disclose whether they are taking any prescription medicines which could affect their performance in the workplace. Whether use of medicinal cannabis by an employee will give rise to health and safety concerns will need to be determined on a case by case basis.

Drug and alcohol policies

Now is the time for businesses to consider or reconsider their employment agreements, policies and handbooks to ensure that they are able to undertake drug and alcohol testing in a manner which is consistent with their type of workplace. A reminder that meaningful consultation with employees should be undertaken whenever a document which contributes to the employment relationship is altered.

Harkness Henry provides advice on both Employment Law and Alcohol Licensing Law. We regularly draft Drug and Alcohol Policies for businesses and provide employment advice when issues arise in this area.

Given the Bill looks to regulate cannabis in a very similar way to which alcohol is regulated, we have taken an interest in the developments on the controlled legalisation of cannabis and will continue to do so. It is our hope that we can advise prospective licensees of cannabis in the future in respect of any legal advice they may need. We have already begun providing some advice in this area.

Please be in touch if you require any advice on Employment Law, Alcohol Licensing Law or the Cannabis Legalisation and Control Bill.



This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.

For further information

Alexandria Till - Harkness Henry Partner

Alexandria Till

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