Cannabis regulation: Profit versus public health

December 2018
Professor Simon Lenton, Director, NDRI

Last month, NDRI hosted its 2018 Annual Symposium: Alcohol and Other Drug Research, Policy and Practice, held in Melbourne for the first time. A highlight of the event was the final session on cannabis regulation, which featured an outstanding panel of experts who presented ideas and discussed issues with the aim of contributing to the Australian conversation around this topical area. The session was chaired by Professor Simon Lenton, who gives an overview of proceedings here.

Attitudes towards cannabis are changing around the globe and, in recent years, a number of regulated legal markets for adult ’recreational’ use have been introduced. Much of the focus has been on fully commercialised, profit-driven models of cannabis regulation, akin to alcohol and tobacco markets, as implemented in a number of US states. However, a number of non-commercial, ‘middle ground’ cannabis regulation options that put health before profit also exist, some of which have been implemented in several European countries and Uruguay.

In Australia, medicinal cannabis for certain conditions is now legal, and there is interest from several factions in legalising cannabis for ‘recreational’ use. However, many questions remain about how best to create a regulated cannabis market that removes the harms associated with its illegality while minimising any other potential adverse consequences associated with its use. What are the options for cannabis regulation that emphasise public health over profit?

NDRI’s panel discussion brought together current expertise from around the world, and highlighted some of the challenges and opportunities to be considered when deliberating the future of cannabis policy in Australia.

Commercial versus non-commercial models of cannabis regulation

The session commenced with a keynote presentation by Tom Decorte who is Professor of Criminology at Ghent University, Belgium and who has, in recent work, focussed on non-profit models of cannabis regulation [eg 1, 2]. Tom began with the UNODC (2016) position that cannabis prohibition has failed. In contrast, he noted that the legalised ‘commercial model’ promises the ability to use legislative and regulatory instruments, which are not available under prohibition, to reduce harm. However, the experience from alcohol, tobacco and pharma is that the effectiveness of these strategies is undermined by the actions of wealthy commercial companies who aim to subvert regulatory controls and maximise sales and profits, to the detriment of public health.

Turning to cannabis, Tom noted that there are a number of non-commercial, ‘middle ground options’ for legal regulation [3]. While he argued that ‘self-supply via home cultivation’ probably needs to be a part of any post-prohibition model for cannabis, most users don’t have the interest, capacity or opportunity to grow their own. Thus, there needs to be another cannabis supply model or the vast majority of cannabis users will be required to go to the black market. Tom sees Cannabis Social Clubs (CSCs), which began in Spain and are now found in 6 European countries, the UK, Switzerland and Uruguay, as a model of promise.

Tom explained that CSCs are non-profit organisations that grow and harvest cannabis on behalf of their members for their personal consumption. Individual plants are owned by individual CSC members and are cared for by the CSC, using a record system to make clear which plants are owned by which members throughout the whole production and distribution process.  CSCs must be properly registered with government authorities and must meet a number of strict conditions to hold a licence. CSC members must be adults. There are limits on the maximum number of members a CSC can have, and the maximum number of plants per member (eg 6), which should be enough to meet their personal consumption needs.

Tom identified a number of potential pitfalls with CSCs including: the need to get the regulatory balance right, the cost of true product quality control, and the need to ensure they don’t morph into commercial enterprises. He concluded that it was better to choose a cautious path by starting with a non-profit model for cannabis regulation and possibly extending it into a commercial model, as it is hard to unwind a commercial model once established.

Is Australia ready for cannabis legalisation?

Professor Nicole Lee, NDRI Adjunct and Director at 360Edge, having noted the experience of cannabis reform internationally, asked whether we are ready for cannabis legalisation in Australia. Noting variation in cannabis law between the states and territories, she also summarised the history of ‘decriminalisation’ in South Australia, the Australian Capital Territory and the Northern Territory.

Nicole said public surveys suggest that some 75% of Australians believe criminal sanctions should not apply to cannabis minor possession, but there is a lot less support for cannabis legalisation - from 25% to 30% depending on the survey. She noted recent interest in cannabis law reform in Australia, including the Greens proposal for a strictly regulated model of cannabis regulation, Senator David Leyonhjelm’s unsuccessful Bill to remove all Commonwealth controls on cannabis, and two proposals before the Victorian government.

Nicole concluded that we should be careful to separate concerns about the health effects of cannabis from discussions about the model of legal regulation which may apply to it.

Issues with Colorado’s commercial cannabis market

Todd Subritzky, NDRI PhD scholar, spoke about his research examining the implementation and first years of Colorado’s recreational cannabis market. Todd noted that since Colorado implemented the world’s first Retail Marijuana Code in 2014, multiple issues have emerged with this profit-driven model.

Prohibition of cannabis federally means no access to banking leading to the recreational cannabis market being totally cash based, no involvement of the Food and Drug Administration (FDA) and the Environmental Protection Agency (EPA), and considerable political uncertainty.  Budtenders (cannabis sales people) are focussed on maximising sales rather than health concerns, and the cannabis industry has, from the start, been invited into the rule making tent watering down what they see as unnecessarily burdensome regulations. Industry documents show that they recognise daily heavy users as the backbone of the industry and target them accordingly [4] and use social media and online reviews to subvert advertising restrictions.

Future options for cannabis law reform in New Zealand

Associate Professor Chris Wilkins, from SHORE and Whariki Research Centre at Massey University, described the situation in New Zealand, where the Government has announced there will be a national referendum on recreational cannabis law reform by 2020. Chris noted that although the current official scheme is prohibition with criminal penalties, about half of people charged receive a pre-charge warning and no further action.

Chris said there are a number of drivers for cannabis reform in NZ including older users who want access to medicinal cannabis, changes internationally, the appeal of taxation revenue, and discriminative application of the law against Maori. Chris has proposed a scheme based on the NZ gambling community trust model [5] which would enable 40% of sales revenue collected to go back to the local community to invest in sport, drug treatment and prevention. A survey by Chris’ group showed Maori, those from towns, and older respondents were more likely to support a non-profit model over a profit-driven model or continuing with the current prohibition.

Implications of cannabis law reform in Australia

Dr Kate Seear, NDRI Adjunct, practising lawyer and academic in the Faculty of Law at Monash University, drew on the work of Carol Bacchi, who argues that whatever we propose to do about something reveals what we think we need to change and what we think the problem is [eg 6]. To this end, Kate argued that existing policy options and our assumptions set up, create, or define, problems from complex phenomena. Many existing and proposed drug policy options such as prohibition, but also commercial models, may themselves be responsible for harm.

Kate asked, ‘What if we problematized cannabis policy and harm in new ways?’ Thus: 1. Recognition of the historic criminalisation, marginalisation and stigmatization of illicit drug use; 2. The historic erasure of pleasure from drug use; 3. Ignoring the expertise and entrepreneurship of people who use drugs including in managing harms; 4. Ongoing criminalisation and its effects on individuals; and 5. Growing recognition that a multitude of social factors contribute to forms of harms experienced as a result of drug use.

Kate argued that policy ought to address these harms, and people with a history of drug use should be given the opportunity to be centrally involved in policy design and administration. Such policy may or may not have the features of a non-profit model. In addition the objectives of the legislation should be clearly articulated. Finally, we need to be mindful of how schemes, such as those proposed by Tom Decorte, relate to overlapping areas of law, such as product liability, consumer protection, advertising and deceptive conduct, and criminal law etc.


The above presentations were followed by a stimulating discussion involving audience participation, which served to illustrate the extensive range of issues and concerns to be considered in any deliberations around cannabis law reform.

There were questions from the audience about: how best to make space for policy makers and politicians to consider middle ground options without being shut down as ‘soft on drugs’; how to ensure continued government control rather than it being handed over to the commercial market; arguments for merging medicinal and recreational cannabis markets; how a more regulated cannabis market might impact the dark net market and its usage; expungement of prior cannabis offences; and, regulation of cannabis social club models to ensure profits go back to the community.

Concerns from the floor included passive smoking; regulation of cannabis intoxication; harm to others; and, potential for young cannabis users to turn to more harmful drugs if legal cannabis no longer perceived to be ‘cool’.

Comments included noting that, in law, the Cannabis Social Club model might be similar to the legal trust model in Australia; and, the need for governments to provide an evaluation structure to see how schemes are being implemented and their impacts.


The panel discussion confirmed that there was interest in exploring and discussing some of the ‘middle ground’ options for a legal regulated market for cannabis in Australia. The debate threw up opportunities and complexities in thinking about models such as CSCs in the Australian context. We hope that this will be the first of many opportunities to continue this discussion contributing to the public discourse about drug policy in Australia.

  1. Decorte T. Regulating Cannabis: A detailed scenario for a nonprofit Cannabis Market. Bloomington, IN: Archway Publishing; 2018.
  2. Decorte T, Pardal M, Queirolo R, Boidi MF, Sánchez Avilés C, Parés Franquero Ò. Regulating Cannabis Social Clubs: A comparative analysis of legal and self-regulatory practices in Spain, Belgium and Uruguay. International Journal of Drug Policy. [Article]. 2017;43:44-56.
  3. Caulkins JP, Kilmer B. Considering marijuana legalization carefully: insights for other jurisdictions from analysis for Vermont. Addiction. 2016;111:2082-9.
  4. Subritzky T, Lenton S, Pettigrew S. Legal cannabis industry adopting strategies of the tobacco industry. Drug and Alcohol Review. 2016;35:511-13.
  5. Wilkins C. A “not-for-profit” regulatory model for legal recreational cannabis: Insights from the regulation of gaming machine gambling in New Zealand. International Journal of Drug Policy. 2018 2018/03/01/;53:115-22.
  6. Bacchi C. Drug Problematizations and Politics: Deploying a Poststructural Analytic Strategy. Contemporary Drug Problems. [Article]. 2018;45:3-14.