Reti ShaneClause 7 Section 14 amended (Licences)Dr SHANE RETI (National—Whangarei): Thank you Madam Chair. Clause 7 starts to address licensing. This is a part that we've done an awful lot of work on and were and continue to be happy to share with Government some of those things that we found and discussions that we've had.Over the course of the next few calls I want to talk about licensing I want to talk about licence holders I want to talk about employees and the manufacturing process. This lends itself against the background of course of a void of any discussion of this. That is our issue. We've asked for even a sort of skeleton framework around what the full medicinal cannabis scheme might look like and we've seen a few more words in the Minister's new Supplementary Order Paper (SOP) in the past 48 hours actually using the word manufacturing and cultivation so that's sort of encouraging. But that's just a word; it doesn't give any detail or any description thereof and we're prepared to do that.So in our SOP 178 we actually address these matters. First of all we make it very clear and the Minister—if he adopts parts of our SOP or if it should turn out to be in his own hands—needs to make it very clear that for a medicinal cannabis scheme it's being viewed as for commercial production and not for personal use or personal production unless he views otherwise. Unless the medicinal cannabis scheme is going to allow personal production then just come out and say it. Put it on the table so the House can debate it look at it scrutinise it. Oh wait unnamed officials are going to decide that. It will never come back to the House. Great!We want to put out what has been up to scrutiny for a number of months now and that talks to initially commercial production and not personal production. Again let's be clear we support commercial production and I'll talk further to that in licensing; we do not support production for personal purposes. We specifically say that in SOP 178. We actually carry it through in several clauses but certainly in clause 4(1)(f) and (g) of new schedule 6 when we're talking about licensing we say the licence is for commercial not personal production.What's also interesting—because I think what a licensing regime should say is whether there's a need. What if there's an oversupply of manufacture? I want the director-general or someone in control to say You know we've actually got enough medicinal cannabis in either the cultivation form in the processing form or in the manufacturing stage. We're actually doing OK so no I'm not going to issue you a licence until some period of time." We think that's very reasonable and very sensible. Can you imagine having warehouses full of loose-leaf cannabis and then it continuing to be cultivated? The risk to that could be substantial. Risks of diversion primarily are what we're talking about here.In clause 4(1)(f) of new schedule 6 we specifically say "the licence [must be] … for commercial not personal production;" and we certainly stand by that. Then we give the director-general the ability to say "To get a licence there needs to be 'a need for commercial supply and demand for cannabis for medical purposes'." That seems to make a lot of sense. In all the discussions we've had with industry—and I want to thank industry for so willingly coming to the table discussing their issues and their concerns with the SOP: the detail we were able to put in front of them that the Minister hasn't been able to. What we have done—we've been informed by industry. It's better with their input. It's a more refined and it's a more sophisticated SOP because of industry input. This is what we expected of the Minister and his team to at least bring to select committee. But oh wait it was a 100-day promise and we only had 100 days to do it. Again to reiterate the licence in our hands is for commercial not personal purposes and there needs to be a need for medicinal cannabis. And we're giving the director-general the authority to say "No you're not having a licence for that."We then want to talk about the licence holders. This is very very important because we think a licence holder needs to be a fit and proper person. It's quite complex to figure out what a fit and proper person might be. We're thinking there's some description around the licence holder—and I'll come to that that there's a higher standard for the licence holder and there's another standard maybe for employees. Again with discussions with industry our initial thinking has been improved and has been refined. I want to discuss how that's changed and what the advice from industry is.Let's talk first of all around what we're thinking a fit and proper licence holder might look like. Well what we're saying is we don't think it's wise if you've had a drug-related offence under the Misuse of Drugs Act. If you're going to be a cannabis producer and you've had a serious drug offence you probably are not suitable to be a licence holder. No one in industry disagreed with that. They said "Yes we absolutely agree." [Bell rung]CHAIRPERSON (Poto Williams): I will call Dr Shane Reti again but apologies I omitted to say when I called for this debate that it also includes debate on new clauses 8AA and 9A new schedule 6 set out on Dr Shane Reti's SOP 178.Dr SHANE RETI: Thank you Madam Chair. I was discussing the fit and proper person criteria that together with industry we've determined is a pretty good start: no offences under the Misuse of Drugs Act no serious drug offences under the Crimes Act no crimes involving dishonesty and no offences outside of New Zealand. We also think it's reasonable for a licence holder not to have been addicted or habituated to the use of a controlled drug or prescription drug—a medical practitioner can certify that—has not at any time been declared bankrupt and has not had a licence revoked.Now if we look at what the Australians do in this space they are much more firm around what a fit and proper person should be to hold a licence. They are actually much more didactic around some quite deep relationships that a licence holder may not have. We've watered down some of those and brought in international best practice to give us a clearer idea as what a good definition of what a licence holder as a fit and proper person might have. We also expect them to have the expertise and resources of course and there are some specific locations which I'll talk to later that are appropriate. So "fit and proper person" for a licence holder: quite a high bar but every single industry person we met with said "Yep we agree. We can do that no problem. The industry needs to be clean."I want to then turn to the eligibility of or the requirements for an employee. The case was made to us that clearly the requirements for an employee would not be the same bar as for a licence holder. A number of industry players in my initial iteration said "Shane that's too tough. We would really struggle with that."—not everyone but a number said that's too much. So with their feedback and informed by them we were able to reach a compromise position on an employee of the licence holder for what they might look like as a fit and proper person.What we came to was this: also if they've had a serious drug-related offence—probably not suitable. Why put them at risk? A crime involving dishonesty an offence punishable for two or more years—of course that's "clean slate"; a clean history a clean criminal record and a clean slate of seven years unless you've been in prison for two years or more. An offence outside New Zealand—if an employee is currently habituated to the use of a controlled drug or prescription medicine it's probably going to be a challenge to be an employee in a cannabis processing facility. And what we've also said here is "not a member of a gang" and we've defined what that might be.These would seem to be very reasonable—very reasonable—fit and proper person qualifications that a licence holder would need to meet. Again we've tested this with industry and modified it. We peeled it back from maybe what was a harder position to what was still acceptable with the National Party caucus is still a firm standard and that looks backwards and says "If you have anything in your history that's really serious—probably not suitable." It also talks to the contemporary time frame that says "Currently here and now if you're habituated or if you have a gang affiliation you're probably not suitable as an employee." And we think this is a very reasonable framework for fit and proper persons for licence holders and their employees and we'd encourage the Minister to have a look at this to see if there's something useful in this and if so to absorb it or certainly to absorb parts of the SOP.I want to speak to locations as well but that's another call I think—another piece of work. What I want to talk to around that under this clause of licensing is how we got to the qualifications we have for a suitable place to cultivate to process and to manufacture—what we mean by that. And again that's been well informed by industry who have helped us and guided us from our initial position. Again this SOP is more sophisticated with their input. So I think I'll leave that for another call."