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The National Business Review (NZ)
Friday, 3 April 1998
Deborah Hill
Three articles in this week's influential National Business Review confirm
that things are really heating up on the cannabis front.
Parliament takes joint approach
The country's lawmakers have decided to take a big inhalation and address
the hot issue of cannabis law reform.
The pot issue has been put on the business and political agenda this week
with the release of a report from a high level think-tank recommending
cannabis should be regulated and taxed.
Parliament's select committee has announced it will hold an enquiry on
cannabis. The inquiry has limited terms of reference focusing on the effect
of cannabis on mental health.
Ministry of health paves way for lifting ban on hemp cultivation
A confidential Ministry of Health report is backing trials of cannabis
cultivation as industrial hemp.
The September 1997 report has been kept from the public, but a copy obtained
by The National Business Review reveals the ministry's chief adviser on
regulation and safety, Bob Boyd, suggests New Zealand should commence trials
of hemp cultivation.
If adopted, the report's recommendations are likely to open the way for hemp
to again become a major commodity, as it was in the US up until the 19th
century.
This week a major New Zealand company added its voice to the call for
free[ing] up cannabis laws to allow hemp to be cultivated as a crop.
The Body Shop's local franchise holders are planning to meet with Health
Ministry, Maf [Ministry of Agriculture and Fisheries] and Customs officials
as well as police to discuss reform allowing the growth of cannabis for hemp.
Body Shop director Michael Ogilvie-Lee said the restrictions on hemp were
preventing New Zealand businesses benefiting from a valuable opportunity.
"If New Zealand wants to remain competitive internationally it must show the
ability to move efficiently past legislative hurdles that have little merit
or logic," Mr Ogilvie-Lee said.
Industrial hemp and marijuana are both classified as cannabis sativa,
although the strain used for hemp has very low levels of
tetrahydro-cannabinol (THC).
THC is the psychotropic substance concentrated in the flowering tops and
leaves and used as a recreational drug.
Cannabis strains for hemp contain 0.3-1% THC whereas varieties grow for drug
use contain 10-15% THC.
There are more than 25,000 industrial applications for hemp, spanning
products from chipboard, paper, fabric and biodegradable plastics made from
the fibre to soap, moisturiser and cosmetics made from the oil of the hemp seed.
The Body Shop markets a hemp dry-skin range but is prevented from selling it
in Australia under current law which classifies hemp seed oil as a poison.
Hemp clothing is sold on small scale in New Zealand but products containing
hemp oil could be illegal.
The Body Shop founder and retailing guru Anita Roddick wrote to Prime
Minister Jenny Shipley from the UK last December asking for hemp to be able
to grown legally in New Zealand.
Ms Shipley wrote back to Ms Roddick in general terms without responding to
the hemp question, but if the Health Ministry report on hemp is adopted it
could fulfil Ms Roddick's request.
The report followed a research visit by Dr Boyd to look at Australia's
licensed hemp programme, in which license to cultivate for trial purposes
were issued in most states.
Dr Boyd concluded growing cannabis for industrial hemp did not cause a
security problem as there was minimal interference with the crops and no
arrests.
National Organisation for reform of Marijuana Law (Norml) promotions
director Chris Fowlie said no one would bother trying to steal cannabis
plants grown for hemp because its THC levels were too low to have any effect.
The Ministry of Health report stated clearly it was dealing only with
cannabis in its capacity as a source of hemp, excluding the issues of drug
reform.
Dr Boyd reported that no one he had spoken to in his research considered the
Australian trials had made cannabis sativa more acceptable as a drug.
Norml's Mr Fowlie said the UN convention on psychotropic drugs specifically
excluded hemp and seeds.
Norml imports raw hemp fabric and gets it made into T-shirts and jeans which
are sold through its Hemp Store in Auckland's Queen Street.
The plants for hemp look different as they're cultivated close together to
foster the tall stalks which provide tough fibres.
According to drug mythology, newspaper baron William Randolph Hearst,
industrial giant DuPont and the US organisation now known as the Drug
Enforcement Association [sic] (DEA) conspired to ban cannabis in 1937.
It was Mr Hearst, the "real" Citizen Kane, who dubbed the plant "marijuana"
after the Mexican name and masterminded the anti-cannabis campaign after
having tracts of forest he owned returned to Mexican nationalists.
Mr Hearst did not want hemp to overtake wood pulp as a prime source of
paper, while DuPont had just invented nylon and didn't want hemp to take
over as a prime source of fibre.
Alcohol prohibitionn had just come to an end and the DEA had 30,000
officers, which it didn't want to get rid of, but had nothing for them to
police.
The congress passed the anti-cannabis legilsation in 1938 [sic] which met
all three parties' needs.
Kiwi green becomes big business
Pot, weed, dope, cannabis, marijuana - call it what you like, the country's
cannabis crop is up there with kiwifruit, wool and forestry as a major New
Zealand commodity.
Legitimate cannabis cultivation for industrial hemp is estimated to yield up
to $800 per acre whereas cannabis grown for sale as a recreational drug is
about as lucrative as it gets - provided you don't get caught.
"It's not a boutique industry anymore, it's a mainstream crop," one drug
world source said.
In economic terms, marijuana has become a currency of its own.
"A bag of cannabis may leave, say, the Coromandel and goes through a series
of transactions before it arrives in a joint between someone's finders.
Each one of the those transactions is untaxable and untraceable," a drug
world source explained.
In Northland marijuana is considered the biggest cash earner in the regional
economy, with locals citing two operators who grossed $5 million in one
season from plants grown in the Puketoto Hills as an example of the money to
be made.
Drug reform campaigners say prohibition is leading to a "drug and dole"
economy. They warn New Zealand is following the US down the road to gang
warfare, and a blood-soaked drug underworld.
A high-powered group of physicians and professionals agree prohibition has
failed and this week their independent Drug Policy Forum put the issue
firmly back on the political and business agenda.
A report from the trust, released this week, recommends a body be set up to
develop and enforce regulations for the production, distribution, sale and
use of cannabis.
"New Zealand politicians and public should accept that cannabis has become
part of our culture. Whatever harms are associated with cannabis are
magnified by driving its use underground," the trust concludes.
The trust, which includes Auckland Medical School medicine department head
Norman Sharpe and other respected health and legal figures, concludes the
health effects of cannabis are no worse than alcohol and tobacco.
It suggests a tobacco, alcohol and cannabis authority should be set up to
regulate the three substances, including setting age and point-of-sale
restrictions.
The trust's suggested regime would allow the government to reap millions of
dollars of tax revenue. Inland Revenue figures for the year to June 30,
1997 show $35 million in tax was assessed from people involved in illegal
activities.
In the late 1980s the annual value of the national cannabis crop was
estimated at $300 million, twice the value of kiwifruit exports or all the
cheese export trade.
More recent figures are hard to come by as the government appears reluctant
to conduct research - some say they don't want more proof showing
prohibition doesn't work.
Australian research found its cannabis industry was worth $18 billion and on
that basis New Zealand's industry would be worth about $3 billion.
In "New Zealand Green" Redmer Yska wrote that a nationwide wholesale and
retail marijuana network had developed linking the regions, and syndicates
bought between the regions to manipulate higher prices and bigger margins.
"[In the 1980's] drug barons squared off against the 'side roaders' in a
shadowy and ruthless turf war that has fed off faltering regional farm
economies and spiralling unemployment," Mr Yska wrote.
The homegrown industry became more sophisticated with new strains of seeds
and cultivation techniques which more than doubled the average potency of
marijuana.
Most New Zealand cannabis seeds originated from the "buddha sticks" imported
in bulk from Thailand by Marty Johnstone and his Mr Asia syndicate in the
late 1970s.
The violence surround the Mr Asia crime ring served to demonise cannabis in
middle New Zealand, who classified it as the same as the narcotics which the
ring also trafficked.
In the late 1990s drug reform campaigners want to separate "soft" and "hard"
drugs, pointing to the Netherlands' experience where an attempt was made to
keep the two separate.
A report by Netherlands Trimbos Institute says the more cannabis users
become integrated into a drug subculture where, apart from cannabis, hard
drugs can also be obtained, the greater the chance they will switch to hard
drugs.
"Separation of the drug markets is therefore essential," the report said.
New Zealand already has its own version of the crack house in the "tinny
house" - a gang-run dope shop operated on a strict business scheme marketing
to school students which minimises risk while maximising revenue.
It works like this: the gang rents a house near a high school which because
it is not owned, cannot be taken off them under the Proceeds of Crime Act.
The "shop" is staffed by young people of only 13-14 years who, due to their
age, cannot be arrested. As less than an ounce of marijuana is kept on the
premises the risk of serious charges is reduced.
A motorcycle courier keeps the "shop" stocked, delivering packages of drugs
hourly, and the drugs, often pre-rolled into joints, are sold at highly
inflated prices of up to $20 for two joints. The tinny shops get their name
from the tin foil in which the marijuana is wrapped.
The infamous "hole in the wall" drug house in Yates Rd, Mangere, which was
raided in 1988, is believed to have generated many millions of dollars in
tax-free revenue for its gang masterminds.
The police estimated the Yates Rd house had turnover of $9 million but a
drug source said, as it was running 24 hours a day for several years, this
would be a conservative assessment.
"You're talking tens of millions of dollars, You have to have your own
accountants to launder the money so you can't get it taken off you," he said.
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