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Legal Highs Now Illegal

A bill banning the manufacture, sale and possession of synthetic highs from Thursday completed all stages tonight.

The Psychoactive Substances Amendment Bill completed its third reading by 107 votes with 14 Green MPs abstaining.

The bill ends all interim product approvals/licenses to sell the products once described as legal highs. No synthetic highs will be legal until they have been proven to be safe, though no regime exists to do this yet.

The bill completed all stages today with penalties for making, selling and possessing illegal highs from Thursday.

The bill would also restrict the use of animal testing by making any evidence from such trials inadmissible in proving they are safe.

The original bill passed by 119 to 1 with just John Banks opposing on the basis of animal testing being envisaged.

The bill repealing interim sales was supported by all parties with the exception of the Greens. The Greens said they were in favour of a ban on animal testing, but said prohibition on synthetic highs would just create a more dangerous black market.

Parliament will resume at 2pm tomorrow.

Some excerpts from a quickly put together regulatory impact assessment sums up problems with both the current law and the pros and cons of prohibition.

The problem with the current regime is regulations and approvals around safety have not been completed

“The regulations have not yet been made and are required to ensure the workability of the legislation. The most significant of these in terms of workability are the regulations that prescribe the information industry will be required to provide in applying for approval of a product. The development of these regulations will require decisions on the threshold of low risk and the evidence that will be needed, in terms of results of pre-clinical and clinical trials, to demonstrate it.

“Currently there are 35 products with interim approval, the majority of which are synthetic cannabis products designed to be smoked. The Ministry estimates that prior to the legislation there were between 200-300 products available for sale from shops, including dairies. The products that are subject to an interim approval are those products that were available in the three months leading up to enactment. This means that, since enactment, no new products have been brought to market. Twelve of the products that met this criterion at the time of enactment have since been removed from the market following concerns about their safety.”

The current market is large

“The Ministry estimates, based on data obtained from licence holders, that around three and a half million packets of products with an interim approval have been sold since July 2013, however we do not know how many people have purchased or used these products.

“The Ministry understands that the profit margins for product owners, manufacturers and sellers are large. Synthetic psychoactive substances typically, are imported from China at around $1,500-$2,000 per kilogram. A kilogram of psychoactive substance is sufficient active ingredient to manufacture around 10,000 small-medium sized packets of smokable product. The most popular products sell in packets of 1.5 to 2.5 grams and costs around $20. The Ministry understands that the cost of manufacturing a product (packaging and contents) is around $1-2 per packet.

“There are currently 149 retailers with interim licences to sell psychoactive products. Prior to enactment, the Ministry understands that there were between 3,000-4,000 retailers. This was a much larger number than the Ministry’s 2012 estimate of 1,000 retailers. Many of those retailers were dairies and outlets that are now prohibited from applying for licences under the Act.

“Since enactment, the Ministry estimates that around three and a half million packets of products have been sold with an approximate retail value of $70 million and that the annual retail sales is likely to be around $140 million.

A safety regime should have been in place by now and the interim regime was only meant to last six months

“These interim provisions were expected to last no more than six months and were introduced because of concerns about black market activity arising if no products were legally available. It was not a perfect solution as the provisions retain the pre-enactment problem of requiring the Government to react to concerns and take action, rather than putting the onus on industry to demonstrate a product meets a determined safety threshold. On balance, however, the Ministry considered that if certain products had been used prior to enactment without safety concerns, it was preferable to allow this small number of products to remain on the legal market, than expose users to a potentially more dangerous black market.

“However, since July 2013, there have been continuing concerns about the harms associated with the use of products with interim approvals, largely in relation to synthetic cannabis. While the PSRA can act quickly to take products off the market following reports of adverse reactions, this requires evidence of harm associated with specific named products. For many of the reports to the NPC and the Centre for Adverse Reactions Monitoring, it has not been possible to attribute reactions to a specific product and reports are generally a generic reference to “synthetic cannabis”. This means that the powers of the Authority are curtailed preventing the Authority from removing products from the market and to date, only 12 products have been recalled in this way.

“The work on developing the regulations that will make the Act fully workable is on-going. It is expected that the regulations will be in place by the end of 2014. In the meantime, the Ministry has considered options to address the problems with the interim approval provisions.”

The effects of prohibition

“People who use these products are expected to stockpile them for their own personal use and the black market is assumed to stockpile to supply future demand. Because these mechanisms will provide for the continued supply of these products irrespective of legal status, use and associated harms amongst dedicated users is expected to continue. However, the cessation of legal sale can reasonably be assumed to reduce the use of these products amongst casual users.

“Up to 161 retailers (including suspended retailers) and 9 manufacturers of psychoactive products will be affected and it is reasonable to assume that businesses will close if this option is progressed. The maximum impact is estimated at up to $60 million dollars in foregone revenue. This estimate is based on the intention that regulations to allow for product testing will be in place within 6 months. Following passage of regulations, the majority of products were expected to come off the market anyway, at least temporarily, while testing was undertaken. The figure also includes an allowance for a spike in sales before the amendment is passed.

“The most likely response by industry would be to off load excess supply through heavy discounting prior to the legislation coming into force. Some industry members may choose to wholesale their remaining supply to black market vendors such as gangs who we expect to take over trade in these products if this option is chosen.

“All people who use these products will suffer a loss of utility following their removal from the market. There will also be legal implications for them if they continue to use them. People caught in possession of these products will be liable to a fine (no conviction) of up to $500. However, if people decide to stockpile large quantities and on-sell, they will be subject to criminal penalties of up to 2 years imprisonment.”

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