Is Australia about to legalize recreational cannabis?

I’m often asked about the state of cannabis in Australia.

And I reply that we have medical cannabis that is federally legal, but the industry is very small with many licensees are yet to be operational. My bet is that we’ll have recreational within five years.

We have an important step forward today as the Australian Greens have released a paper by the Parliamentary Budget Office on the benefits and a proposed model to legalize recreational cannabis in Australia.

And when there is potential tax revenue to the tune of $28 billion on the horizon, it certainly makes legalization a lot more feasible politically.

Although the stigma is definitely strong in Australia, we are seeing more support for legalization and huge growth in our medical program as people seek out treatments that are less harmful to their health and more effective for their condition.

And given this debate will be played out in the halls of Parliament, an advantage we have is that the largest voting cohort are Millennials and Gen Zs who are more inclined to consume cannabis that to drink alcohol.

We’ve seen their impact at the Federal election last year where the former Government was turfed out of office in a spectacular bollocking at the ballot box.

Why?

They didn’t listen past the factional wars in their Canberra bubble to hear that the people were crying out for progressive, transparent government which resulted in very successful campaigns against them.

The Greens are being smart about this.

They’re approaching this as a federal model to avoid any state to state rivalries or inconsistencies, and using the GST (Goods and Services Tax which is a flat 10% tax on all ‘non-essential’ goods and services that everyone understands) and a 15% cannabis sales tax.

The revenue would be used to fund public infrastructure and programs that are in desperate need of investment.

They’ve also proposed establishing a new agency to oversee regulation, licensing - and interestingly - to be the sole wholesaler between producers and retailers. Prices will be set based on street value until the market is mature enough to decide for itself.

This is a smart approach because it deals with a lot of the negative externalities that we’ve seen play out in the US and other places where a legal market comes in but

Setting the price to the street price doesn’t incentivise people to buy underground and doesn’t distort the price to make it inaccessible.

Acting as wholesaler gives visibility over all production, providing less opportunity for illicit activity, and also helps prevent a market failure through price fluctuation.

In addition to what the Greens have proposed, there needs to be a strong focus on industry capacity building to ensure we have a skilled workforce to service the demand when legalisation happens. This will need time and resources.

It will also need a system like the BlakthumbOS to provide the infrastructure that can disseminate knowledge, standardization and best practice and manage operations in a way that is flexible and transparent.

There also needs to be a focus on streamlining the approval process so that it doesn’t take years to get licensed, and providing ways to build equity into the policy so that we see opportunity for underrepresented groups including financial support and guidance like we see in the NY model.

Indigenous communities could really benefit from legalisation as a lot of Local Aboriginal Land Councils have land that could be used for production (indoor, outdoor or hybrid) and create local jobs and interesting brands. US producers like Native Nations Cannabis provide a model that I think could work here in Australia with Indigenous communities.

And the products that we could make are exciting. I think about how amazing a lemon myrtle and macadamia infused chocolate would be!

We also need to get the planning right. Both land use planning to make sure people can set up production facilities in cities and elsewhere (something we are failing at and I teach at course on Planning for Urban Agriculture through the Planning Institute of Australia), and capacity planning to make sure that there is access to product, and there is enough supply for the demand and vice versa.

Oh, and for my non-Australian friends, we refer to our unemployment benefit as the “dole”. The amount of funding for the dole is at a level that hasn’t increased meaningfully in decades and means many Australians are living in poverty or don’t have income to engage in the economy.

I’m very interested to see how this proposal plays out and whether it will get traction with the Government. The reasoning is sound and the model it’s a good place to start.

I’m curious to know your thoughts are on the sole wholesale model approach?

Credit: Reference article written by Samantha Maiden

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