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Common(wealth) Knowledge #64(20): Greens cannabis bill to rely on intellectual property law

The Greens have introduced a bill to legalise cannabis in the second week of federal parliament's sitting this financial year.

The Greens have made Australian history, introducing the first legislation in the nation's federal parliament to legalise the recreational use of cannabis.

Under the proposed terms of the legislation, this would include the use of cannabis for private consumption and the commercial production of cannabis.

Although laws regarding the use of cannabis for medical purposes have been implemented in Australia, only the Australian Capital Territory has taken any steps toward allowing non-medicinal use of cannabis.

In a statement released by the Greens, the party's justice spokesperson David Shoebridge stated that the bill would “regulate the quality, strength and safety of a product” that is consumed by several million Australians, of which 80,000 go through the criminal justice system each year for possession of this drug.

Part 5 of the Legalising Cannabis Bill 2023 (Cth) would establish a regulatory body, the Cannabis Australia National Agency, with Sections 35 giving it a broad range of powers, including the authority to issue licences, test commercially produced cannabis, oversight of the training given to registered cannabis providers, and advise the Minister for Health.

The CANA would fall under the executive branch of government, as the CEO is appointed by, and answerable to, the Minister for Health.

Another indicator of its status as part of the executive is Section 36, where a note states that the CEO, on behalf of the CANA, can “enter into contracts … on behalf of the Commonwealth.” Importantly, this is only a conferral of power already held by the Commonwealth government, which Williams v Commonwealth (No 1) and (No 2) limits to contracts authorised under the powers of the Australian Constitution and legislation passed by Parliament.

(Check out Common(wealth) Knowledge #55 for more on the limitations on the executive branch’s contracting and spending powers).

Under Section 11, the CANA is expected to maintain a Register of Cannabis Strains, which is independent of Parliament, with only strains of cannabis listed under this register being lawful. This reinforces the fact that legalisation also means regulation; medical standards mean that only cannabis that is safe for production should be allowed on Australian streets.

Regulation also means taxation, with Senator Shoebridge expecting the legislation to bring in $28 billion in tax revenue over the next 9. It is currently unclear whether this will operate like the scheme that applies to cigarettes or to alcohol taxes, as the former also requires packaging to explain the risks involved in consumption.

Taxation is where the Greens’ bill differs from the Drugs of Dependence (Personal Cannabis Use) Amendment Act 2019 (ACT), which amended the Drugs of Dependency Act 1989 (ACT).

The ACT legislation merely decriminalised the possession of small amounts of cannabis by adults. Section 171AA applies a maximum punishment of 1 penalty unit, currently $154.80, which in practice will mean that no fine is imposed.

However, the ACT government believed that this would offer adults an excuse for the use of cannabis, and encourage them to seek support for their addiction. This is reflected by the use of ‘dependency’ in the legislation’s name.

However, like with the ACT’s legislation and medical cannabis laws, this bill would not remove criminal offences like driving while under the influence of drugs.

Decriminalisation does not involve regulating standards for the production of cannabis, nor does it impose a tax on it.

There are two incentives for producers to comply with the regulatory requirements. The first of these is obvious, as failure to comply with the legislation will result in punishment.

However, there is a second incentive. The standards imposed will prevent dealers, now treated as ‘producers,’ from diluting or ‘cutting’ their cannabis to allow them to sell a greater quantity of the drug, at a weaker strength.

The risk here is that this practice of cutting imposes further health risks for consumers. However, this regulation would require more transparency by producers, and by moving the drug trade out of the dark alleyways would allow consumers greater freedom to choose which producer to use.

If word got around that a particular producer was producing poorer-quality cannabis, because legalisation removes the ‘beggars can’t be choosers’ mindset from consumers, that producer would quickly be out of business.

For those reading the bill, Section 14 may appear to be unusual, as it mentions intellectual property. Specifically, it states that just because a strain is registered with the CANA does not mean that each producer loses their intellectual property over their product.

This is because the constitutional basis for this legislation is Section 51(xvii) of the Australian Constitution, granting Parliament legislative power over intellectual property.

The connection between cannabis and intellectual property law may seem unconventional at first, but 6 news interviewed Senator Shoebridge on this topic last year. In that interview, Senator Shoebridge referred to the High Court ruling in Grain Pool of WA v Commonwealth (2000). In that case, the High Court had to consider whether the ‘intellectual effort’ involved in breeding species of plants can be treated the same as ‘authorship’ of a book or, in the case of Nintendo Company Ltd v Centronics Systems Pty Ltd & Ors (1994), a circuit board, and thus is protected as intellectual property.

Section 14, therefore, exists to clarify that just because each producer is required to register their strain of cannabis with the CANA does not mean that they are transferring their intellectual property rights over to the CANA as well.

The Greens will be facing an uphill battle in getting this legislation passed, especially given their recent conflict with Labor over housing legislation, but 6 News will be closely following the progress of this bill through Parliament.

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Grain Pool of WA v Commonwealth (2000) 202 CLR 479; [2000] HCA 14.

Williams v Commonwealth (No 1) (2012) 248 CLR 156; [2012] HCA 23.

Williams v Commonwealth (No 2) (2014) 252 CLR 416; [2014] HCA 23.


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