- Hon David Seymour
Regulation Minister David Seymour has today announced a reform of the regulations for the industrial hemp sector.
"New Zealand's hemp industry has been treated like a criminal for too long. The industry has been held back by outdated, heavy-handed rules that treat growing low-risk crops like high-risk drugs. That ends now," Mr Seymour says.
Cabinet has agreed to a package of changes to scrap the current licensing regime for industrial hemp and replace it with a more practical, proportionate regulatory approach.
"This is important to Kiwi hemp businesses because red tape for the sake of it costs growers money and limits innovation. The proposed changes are expected to generate a net present value (NPV) benefit of $7.5 million over the next 10 years. As the market continues to grow, the benefits will too. Over 20 years, the NPV is about $41 million," Mr Seymour says.
"The changes will reduce costs and give certainty to growers and investors.
"We continue to cut red tape to give businesses the best chance at success. Peer reviewed analysis estimates that work by the Ministry for Regulation in its first 18 months will deliver a net public benefit of $223 million to $337 million. The return on investment is large, from expenditure of around $20 million.
"Industrial hemp contains very low levels of THC and is grown for food, oil, fibre and health products. Despite its low risk profile, it has been heavily regulated for nearly 20 years. Common sense says that's absurd.
"This is another example of why New Zealand needs the Regulatory Standards Act. If the Act was in place at the time these regulations were made, you would be able to see the low risks the crazy regulations were in place to 'mitigate'. So far though, the disproportionately high costs of regulating the use and exchange of industrial hemp have been hidden."
Under the new settings:
- Industrial hemp will no longer require a licence to grow or handle.
- A clear THC threshold of less than 1% will distinguish hemp from high-THC cannabis.
- Hemp biomass, including flowers and leaves, may be supplied to licensed medicinal cannabis producers under strict conditions.
- Growers must notify Police before planting to avoid accidental enforcement and assist in controlling illicit cannabis activities.
- Growers must also notify MPI at the same time as Police.
- Hemp use remains restricted to fibre, seed, and oil, with additional permissions for medicinal cannabis supply as noted above.
- Existing food safety and medicinal cannabis requirements will continue to apply.
The new regulations will include safeguards to prevent misuse and ensure compliance.
Implementation of these changes will be led by the Ministry of Health who will draft the new regulatory settings with the Parliamentary Council Office.
"In a high-cost economy, regulation isn't neutral - it's a tax on growth. This Government is committed to clearing the path of needless regulations by improving how laws are made," Mr Seymour says.
"Bad regulations have real consequences for real people. People work hard to earn their livelihood. Now with the Regulatory Standards Act there is scrutiny for people who ruin it with bad regulations. The public will be brought around the Cabinet table. They will be able to see how politicians make decisions, based on whose advice. If people don't like what they see, they can have their say at the voting booth."
