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NSW Greens to Legalise Recreational Cannabis, and Overhaul Drug Driving

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The shift towards legalising and regulating the adult use of cannabis is picking up momentum across the planet.

And this global trend incorporates a few key truths: that the plant is fairly innocuous, criminalising people for its use is redundant and there are great societal benefits in legalising.

Colorado and Washington were the first jurisdictions to abolish cannabis prohibition in late 2012.

Today, 21 US states have legalised recreational cannabis, as have the nations of Uruguay, Canada, Thailand and Malta, with the courts in South Africa and Mexico having greenlighted adult home use.

And on Wednesday, the NSW Greens foreshadowed that cannabis law reform is likely on its way for this state, as the progressive party released its plan to legalise the plant, which entails all the trimmings that ardent cannabis advocates assert must be a feature of a just regulated market.

“More than one in three of us have used cannabis in our lifetimes and more than two million Australians use cannabis each year,” NSW Greens MLC Cate Faehrmann told the press. “Prohibition has well and truly failed and governments all around the world are finally accepting this fact.”

Indeed, as historian Dr John Jiggins recalls, the first Australian health director general Dr John Cumpston rejected the international call to ban cannabis under the 1925 Geneva Convention, telling the then PM that the readily available substance was already regulated and posed no real harms.

Prioritising the green

Faehrmann told Sydney Criminal Lawyers the day prior to the Mardi Gras parade that she’ll be moving to introduce legislation seeking to legalise and regulate recreational cannabis as a priority, after the state election later this month.

“It’s my hope that the Greens will hold the balance of power in the next parliament so that we can make Labor, if they do form government, act on drug law reform,” continued the lead candidate on the NSW Greens upper house ticket.

The Greens drug law reform spokesperson further points to a number of beneficial reasons to legalise the herb. Chief amongst them being that at present people are continuing to be arrested and, in some cases receive criminal records, over a drug that’s less harmful than alcohol or tobacco.

NSW Bureau of Crime Statistics and Research figures outline that over the five years to December 2021, cannabis consistently accounted for around 50 percent of all possession incidents recorded by the NSW Police Force, with 16,000 to 18,000 locals unnecessarily falling foul of the law annually.

“The Greens bill would ensure that cannabis products are labelled in terms of the strain and levels of THC and CBD,” Faehrmann said in a statement, adding that, unlike drug dealers, a regulated market would mean stores would be required to refuse sales to those under 18.

Just legalise it

The NSW Greens cannabis policy sets out that the party “will create a regulated cannabis market in NSW to reduce the harms from cannabis use, while also preventing the overcommercialisation of the cannabis market by large corporations”.

Also on the cards is a provision that will allow households to grow up to 12 plants of their own, whilst cannabis social clubs will also be legalised. These must involve at least five people, who will have permission to grow up to 12 plants each or collectively, the club can produce up to 200 plants.

Health warnings and the content of cannabis products will be printed on the packaging and advertising such goods will be banned. And as elsewhere around the world, those convicted of cannabis-related crimes will have those convictions expunged.

Another key feature of the Greens policy is the establishment of a NSW Cannabis Authority that will be charged with ensuring that smaller cannabis operators aren’t overshadowed by large corporations. And the authority will also issue cannabis licences and monitor the marketplace.

Impairment not presence

NSW Greens MP for Ballina Tamara Smith has raised the ongoing issue with drug driving in relation to prescribed medicinal cannabis users, which is an issue of particular concern in the NSW Northern Rivers region, as those on the medication can still have their licence suspended for use.

Right now, in all jurisdictions around Australia, besides Tasmania, the users of cannabis medicine can be pulled over by police, tested for drug driving and turn up a positive reading for THC, the psychoactive component of the plant, and then have their licence suspended and receive a fine.

This is in stark contrast to all other prescribed medicines. And another clear injustice is, unlike random breath testing which tests for levels of alcohol in a driver’s system to ascertain whether they’re too intoxicated to drive, drug driving only tests for the mere presence of a substance.

This means that prescribed medicinal cannabis users can lose their licence for driving with traces of their medication in their system, even when they’re not impaired. This is the same for recreational cannabis users. And the NSW courts have found that people are being charged days after use.

The NSW Liberal Nationals government has repeatedly voted down legislation that would provide those using legal cannabis medicine on prescription with a defence against drug driving. However, a Labor government in Victoria is currently seriously considering passing a similar law in that state.

So, with a Labor government looking likely for the next NSW parliament, the Greens are taking drug driving reform one long-called-for step further, as the party is prioritising a complete overhaul of the NSW drug driving regime, so that police will test for impairment rather than traces of a substance.

The green rush is coming

“The Greens are a grassroots democratic party, and we are discussing our priorities for any possible balance of power scenario with members,” said NSW Greens MP for Newtown Jenny Leong, in terms of an election outcome for her party that would be favourable in achieving cannabis reform.

“We have a very clear timeline for this and will be informing the community what we will be negotiating in any balance of power arrangement well ahead of when they come to vote on 25 March.”

Another benefit that follows on from cannabis legalisation is economic. Over 2020 in the States, the cannabis market pulled in between $54.6 and $66.9 billion, while the first eight months of legal cannabis in Canada saw an additional $8.26 billion added to that nation’s GDP.

And it’s estimated that nationwide legalisation in this country could raise $28 billion in revenue over the period of a decade.

Decades of cannabis prohibition have failed,” said Adam Guise, NSW Greens candidate for Lismore. “Continuing to criminalise cannabis users empowers the police to persecute particular populations and communities, like Nimbin.”

“Drug law reform can’t happen without political action and only by electing MPs who want to change the currently broken and unjust system will this occur.”

 

Source: https://www.sydneycriminallawyers.com.au/blog/nsw-greens-to-legalise-recreational-cannabis-and-overhaul-drug-driving/



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Driving Under the Influence of Marijuana

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No national standard exists to determine how long someone should wait to drive after consuming marijuana. However, experts at the Colorado Department of Public Health and Environment recommend waiting at least six hours after smoking less than 35 milligrams of THC and eight hours after eating or drinking something containing less than 18 milligrams.

For reference, a “typical” marijuana cigarette contains at least 60 milligrams of THC, and most edibles contain around 10 milligrams per serving size. A 12-hour wait is safer, as the high (and subsequent drowsiness) from smoking a typical amount lasts far longer.



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How can it help distressed cannabis companies today?

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Without the option to declare bankruptcy—due to federal illegality—the only recourse for cannabis businesses in distress to become solvent and / or distribute assets to creditors is to enter into an expensive and difficult judicial cannabis receivership. Receiverships are inherently adversarial, and the required input from third-party experts, lawyers and regular engagement with the courts can be incredibly costly.

Meanwhile, businesses operating in mainstream sectors have the ability to declare bankruptcy. This is also a court-ordered procedure that allows companies to satisfy lenders by liquidating assets, restructuring operations and finances, and to enjoy a break of sorts to make deals with creditors and renegotiate contracts and leases. Without a change to federal banking laws, cannabis companies are blocked from the benefits of bankruptcy, and the situation is only getting worse.

Given the current tight capital market environment, the increase in cannabis distressed assets, and the shortage of options to cannabis operators to address said challenges, is there a possible alternative option to alleviate the rather dire situation?

 

Genesis—Transition from Equity Financing to Debt Financing

Equity financing has been the most prominent way to raise capital in cannabis for the last several years. However,recent data collected by Viridian Capital Advisorsreveals that debt currently makes up 93% of capital raised by U.S. cannabis cultivation and retail companies, compared to 55.7% in U.S. industries overall.

This change in the capital-raising environment, which has led to an increased number of creditors in the sector, combined with continued market pressures on cannabis businesses to remain competitive, make it highly likely that the industry will inevitably see more receiverships.

Ultimately, while debt financiers are willing to lend cannabis businesses money, they expect to be paid back on time and often with high interest. If the business begins to struggle and enters a distressed phase that leads to receivership, the business assets will be sold off and the secured lenders will be the first to get paid, while the business itself is likely not to recover much.

Consider an Administrative and Collateral Agent

With receiverships punishingly expensive and the debt financing landscapebordering on predatorial, distressed cannabis businesses are desperate for any assistance or support available.  An Administrative and Collateral Agent (ACA) could be the alternative support required, benefitting borrowers, lenders and regulators alike, and offering a more cost-effective and less punitive option to courts, receivers and lawyers.

Instead of dealing with the courts and an expensive court-appointed receiver, cannabis companies seeking relief could turn to an ACA to facilitate mediation between parties and create alignment within the industry, which does not exist today.

An ACA could create a level of trust, transparency and complementary positioning with industry participants that simply has not yet existed in cannabis. The use of an ACA could challenge the competing perceptions that there is already alignment between regulators, operators and lenders, or that a useful alignment between these parties could ever exist.

An ACA could be a real and valuable tool for state governments and regulators as they begin to understand that it is in their best interests to assist cannabis businesses in their states in the face of continued federal illegality and restrictions. Under a private agreement between parties, the ACA would conduct something more akin to an administrative receivership as opposed to the traditional judicial receivership that is the only current option for insolvent cannabis businesses to seek relief.

Building upon a Cannabis Credit Rating Framework

Ideally, an ACA would work within an industry-specific credit rating system for cannabis businesses in distress in order to work within an established framework for potential investors. If cannabis companies are ranked across an equitable, systematic and formulaiccredit rating system, borrowers, lenders and regulators would benefit from the quantifiable transparency afforded by said rating, and debt financing would have an inherent regulatory-like structure to prevent predatory lending. By avoiding the courts, the distressed cannabis company would save time, money and create a more attractive scenario for potential lenders.

Initial Path to Mitigating Solutions

While the current challenges facing cannabis businesses today are well documented and have risen to both creditors and regulators attention, a viable solution has yet to be identified. Most likely no one solution exists beyond waiting for the economic and capital environments to evolve. Yet, mitigating options do exist.

The introduction of an ACA is one such option. Questions remain as to the mechanics, regulatory, operative and fiscal alike, as well as who to trust to take it on. The introduction of a credit rating framework is the first step to creating a solid foundation from within which an ACA can operate transparently and equitably. Any potential buy-in from regulators, creditors and operators remains an open question.

All of that said, there is today an unprecedented set of market forces that is pushing all cannabis stakeholders to think outside of the box. The still growing opportunities in the cannabis industry, the will of operators to survive and succeed, as well as the increasing exposure from creditors, all point to not only an acceptance for the need of an alternative, but to the drive to do things differently.

Is your cannabis business in distress? Would you benefit from expert guidance and support in deciding on whether to enter into a receivership?Reach out to United CMC today.



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United States: Alex Malyshev And Melinda Fellner Discuss The Intersection Of Tax And Cannabis In New Video Series – Part VI: Licensing (Video)

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Carter Ledyard is pleased to announce the launch of our short-video series on the cannabis industry focusing on business and legal issues for those companies and entities interested in doing business in New York.

This series offers a perspective on tax policy and specific statutes affecting cannabis businesses today. Our cannabis shorts are a great way to get to know our professionals, Alex Malyshev and Melinda Fellner, in quick and easy to watch clips, packed with the salient information you need.

In Part VI of our series, Alex and Melinda discuss licensing for cannabis businesses in New York. Watch below!

 



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