Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2016-2017-2018
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
AUSTRALIAN CANNABIS AGENCY BILL 2018
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator Richard Di Natale)
AUSTRALIAN CANNABIS AGENCY BILL 2018
OUTLINE
This Act treats cannabis consumption as a health issue, not a law enforcement issue. In 2018,
nearly seven million Australians had used cannabis at some point in their lives. This statistic
demonstrates that, despite the current illegality of the drug, more people are continuing to use
cannabis. Creating a regulated legal market for cannabis, as this Act starts to establish, will
help ensure that people have accurate, up-to-date information about the potential harms
associated with those substances.
The Australian Cannabis Agency Bill 2018 will regulate the production and distribution of
recreational cannabis in the Australian Capital Territory and the Northern Territory. It
establishes the Australian Cannabis Agency with responsibility for issuing recreational
cannabis and distribution licenses. The bill provides for a range of conditions under which
these licences can be granted and revoked. This includes provisions to ensure that purchasers
are over 18 years of age, that the cannabis is provided in plain packaging and that the person
who distributes cannabis has received mental health first aid training and training in the
responsible distribution of cannabis.
The bill will not change any of the current provisions or arrangements for medicinal
cannabis. It applies only to recreational cannabis.
The bill is based on the territories power (section 122 of the Constitution). The scheme as
established by this bill does not apply nationally because the Commonwealth does not have
the power under the Constitution to do this. However, if all the States were to refer their
powers to regulate cannabis to the Commonwealth under paragraph 51 (xxxvii) of the
constitution, this could occur.
The bill will create offences and civil penalties relating to the unlicensed production of
distribution of recreational cannabis of seven or more recreational cannabis plants. Where an
individual possesses six or fewer recreational cannabis plants, they are able to distribute
recreational cannabis from those plants to other individuals so long as the distribution is free.
The Board of the Agency, established by this bill, will draw together state and territory
governments, and experts in the area.
The monitoring provisions in this bill will afford buyers of cannabis confidence as to what
they believe they are buying based on what is on the label.
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NOTES ON CLAUSES
Clause 1: Short Title
1. This clause provides for the Act to be cited as the Australian Cannabis Agency Act
2018.
Clause 2: Commencement
2. This clause provides that sections 1 and 2 commence the day after the Act receives
Royal Assent and sections 3 to 67 commence the day the Consolidated Revenue Fund is
appropriated to fund the Australian Cannabis Agency.
Clause 3: Simplified outline of the Act
3. Clause 3 sets out of the simplified outline of the Bill. It should be noted that, while
simplified outlines are included to assist readers to understand the substantive provisions, the
outlines are not intended to be comprehensive. It is intended that readers should rely on the
substantive provisions.
Clause 4: Act binds the Crown
4. Clause 4 would provide that the bill will bind the Crown in each of its capacities.
Clause 5: Definitions
5. Clause 5 would define the terms used throughout the Bill. Some important definitions
that warrant detailed explanation include the following:
'cannabis' and 'medicinal cannabis product'- have the same meanings as in the Narcotic
Drugs Act 1967.
Cannabis Agency - means the Australian Cannabis Agency that will be established by
proposed section 9.
cannabis licence - means a cannabis production licence or a cannabis distribution licence as
defined in proposed sections 42 and 47 respectively.
distribute - means the following:
(a) sell; or
(b) offer for sale; or
(c) otherwise supply (whether or not for consideration).
fixed price period -means the period of 2 years during which the Cannabis Agency may
perform the following functions:
(a) buy recreational cannabis from the holder of a cannabis production licence; and
(b) sell recreational cannabis to the holder of a cannabis distribution licence.
Clause 5 establishes that the fixed price period will begin on the day that section 11
commences.
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recreational cannabis -means cannabis other than cannabis that is, or is included in,
medicinal cannabis product. This definition is significant as the Bill applies only to
recreational cannabis, and will not change any of the current provisions or arrangements for
medicinal cannabis.
statutory wholesale price - means the price determined by the Cannabis Agency under
proposed section 11 at which the Agency may:
(a) buy recreational cannabis from the holder of a cannabis production licence; and
(b) sell recreational cannabis to the holder of a cannabis distribution licence.
Part 2- Constitutional Provisions
Clause 6: Application only within Australian Capital Territory and Northern Territory
4. This clause establishes that the bill will apply only within the Australian Capital
Territory and the Northern Territory. As noted in the outline, this is because the Bill is based
on the territories power (section 122 of the Constitution). The scheme could apply nationally
if all states were to refer their powers to regulate cannabis under paragraph 51 (xxxvii) of the
Constitution.
Clause 7: Exclusion of Territory laws
5. This clause establishes that the bill will override existing laws of the Australian
Capital Territory and the Northern Territory in relation to the production of recreational
cannabis, the distribution of recreational cannabis or the possession of recreational cannabis.
Clause 8: Relationship with other Commonwealth laws
6. This clause establishes that the Bill would not have any impact on the operation of
Commonwealth laws that relate to medicinal cannabis and are not incompatible with this Bill.
It states the Parliament's intention that the Bill would override the application of other
Commonwealth laws, within the Australian Capital Territory and the Northern Territory, that
relate to the production, distribution and possession of recreational cannabis.
Part 3- Australian Cannabis Agency
Part 3 will establish the Australian Cannabis Agency (the Agency) and describe the functions,
powers and limits of the Agency.
Clause 9: Establishment of the Australian Cannabis Agency
7. This clause describes the form of the Agency, and notes that the seal of the Agency is
not to be used except as authorised by the Board of the Agency.
Clause 10: Function of the Cannabis Agency
8. This clause sets out the three functions of the Agency, which are to regulate the
production and sale of recreational cannabis and to undertake its recreational cannabis
price-setting function.
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Clause 11: Recreational cannabis price-setting function
9. This clause defines the recreational cannabis price-setting function and sets out that
this function only applies during the fixed price period. The fixed price period is the period of
time during the Agency may only buy and sell recreational cannabis at a fixed price. This
provision is included to set a base price for recreational cannabis. The provision is included to
assist readers only, as the instrument is not a legislative instrument within the meaning of
subsection 8(1) of the Legislation Act 2003.
Clause 12: Powers of the Cannabis Agency
10. This clause sets out the powers of the Agency. Principally it provides the Agency the
powers to do all things necessary for it to perform its functions (as established in Clause 10).
Clause 13: Cannabis Agency does not have privileges and immunities of the Crown
11. This clause provides that the Agency does not have the privileges and immunities of
the Crown in right of the Commonwealth.
Part 4- Cannabis Agency Board
12. Part 4 establishes that there is to be a Board of the Agency. It sets out the functions of
the board and outlines how the Board is to operate.
Division 1- Establishment and Functions
Clause 14: The Board
13. This clause establishes that the Agency is to have a Board.
Clause 15: Functions of the Board
14. This clause establishes the functions of the Board, which are to decide strategies and
policies to be followed by the Cannabis Agency and to ensure the proper, efficient and
effective performance of the Cannabis Agency's functions. It also sets out the powers of the
Board.
Division 2 - Board Members
Clause 16: Membership
15. This clause establishes that there will be a Board Chair and at least eight, and no more
than 10, members.
Clause 17: Appointment
16. Subclause 17(1) establishes that the Minister appoints Board members in writing, and
that the appointment is on a part-time basis.
17. Subclause 17(2) establishes that the Minister has the authority to decide the length of
time that Board members are appointed for, but that it must not exceed 5 years.
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18. Subclause 17(3) establishes the expertise and knowledge that must be present across
Board members at all times and that representation from each state and territory is required.
The range of expertise includes: harm reduction, clinical expertise, mental health, user
advocate and law enforcement sectors. The Act does not preclude expertise from other areas
being included in the Board.
Clause 18: Acting appointments
19. Subclause 18(1) establishes that the Minister appoints the Board Chair via written
instrument.
20. Subclause 18(2) establishes that the Minister appoints Board members.
21. Subclause 18(3) establishes that a person who would not be otherwise eligible for
appointment to the Board is not eligible to be appointed to fill a vacancy.
Clause 19: Remuneration
22. Clause 19 establishes that remuneration for Board members is to be determined by the
Remuneration Tribunal. Where the tribunal has not made a determination, the Minister is
authorised by this bill to create rules which specify the remuneration.
23. Subclause 19(3) establishes that Board member allowances are to be specified in
rules.
Clause 20: Leave of absence
24. This clause establishes that the Minister is the person authorised to grant a leave of
absence to the Chair of the board and to determine the terms and conditions on which this
granted. It also establishes that the Chair of the board is the person authorised to grant a leave
of absence to Board members and to determine the terms and conditions on which this leave
is granted.
Clause 21: Disclosure of interests to the Minister
25. This clause establishes that Board members are required to give, in writing, notice to
the Minister of all interests that conflict, or may conflict, with the proper performance of their
role as a board member.
Clause 22: Resignation
26. This clause establishes that the resignation of a Board member occurs via written
notice to the Minister and that it occurs on the day specified by the Board member.
Clause 23: Termination of appointment
27. Clause 23 sets out the scenarios under which the Minister is able to terminate the
appointment of a Board member.
28. Subclause 23(1) establishes that reasons for termination include misbehaviour and the
Board member being unable to perform the duties of their office because of physical or
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mental incapacity. Subclause 23(2) provides that the Minister may terminate the appointment
of a Board member if they fall into significant financial distress. Subclause 23(1) establishes
that absence from three consecutive board meetings is also grounds for termination of a
Board member.
Clause 24: Other terms and conditions
29. This clause grants the Minister the authority to impose additional terms and
conditions on a Board member's appointment.
Division 3 - Meetings of the Board
Clause 25: Convening meetings
30. This clause establishes that there must be at least four Board meetings in each
calendar year and that the Chair must convene a Board meeting within 30 days of receiving a
request to do so from a majority of other Board members. The clause also establishes that,
other than these requirements, the Board is able to determine the time and location of the
meetings.
Clause 26: Presiding at meetings
31. This clause establishes that the Chair must preside over all meetings that they are
present at and that, when they are not, board members must appoint one of their number to
preside.
Clause 27: Quorum
32. Clause 27 establishes that at board meetings, half plus one of the board membership
must be present for quorum to be constituted.
Clause 28: Voting at meetings
33. This clause establishes that a question at a board meeting is a resolved by a majority.
Clause 29: Conduct of meetings
34. This clause gives the Board the authority to choose how meetings are regulated.
Clause 30: Minutes
35. This clause establishes that, in addition to the authority given in Clause 29, minutes
are to be kept of Board meetings.
Clause 31: Decisions without meetings
36. Subclause 31(2) gives the Board the authority to decide if, and how, it is able to make
decisions of a particular kind without meeting. If such a decision has been reached,
subclauses 31(1), 31(3) and 31(4) provide directions as to the conditions under which this
type of decision can be made.
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Clause 32: Disclosure of interests to the Board
37. Clause 32 establishes the processes which are to be followed by Board members to
disclose conflicts of interest to the Board. This clause operates in addition to Clause 21
(which states that conflicts of interest are to be declared in writing to the Minister).
Clause 33: Chief Executive Officer
38. This clause establishes that the Agency is to be led by a Chief Executive Officer.
Clause 34: Appointment
39. This clause establishes that the CEO is to be employed in a full time capacity, that
they are to be appointed for no more than five years and that they must not be a member of
the Board. It also establishes that they are to be appointed by the Board (i.e., not the
Minister).
Clause 35: Acting appointments
40. This clause gives the Board the authority to appoint a person to act as the CEO in the
event of a vacancy, either short or long term.
Clauses 36- 40
42. Clauses 36 to 40 establish organisational parameters under which the CEO is
employed and set out terms for his or her remuneration, resignation, other paid work, leave
and termination.
Clause 41: Staff
43. This clause establishes that the Agency is to be staffed by Australian Public Service
employees, and that the Agency is a particular type of Commonwealth Agency: a statutory
agency.
Part 6- Cannabis licenses
Division 1 - Cannabis production license
Clause 42: Application for cannabis production license
44. Subclause 42(2) establishes that the Agency can specify the form through which a
person can apply for a license to produce cannabis (a cannabis production license). Subclause
1 establishes that a person can apply to the agency, using the form, for a license.
Clause 43: Cannabis Agency must decide whether to grant cannabis production license
45. Clause 43 establishes that the Agency has the authority to decide whether or not to
grant a license. It grants the Agency the authority to have regard to any matters that they
consider relevant in granting the license, but restricts the Agency to only grant a license to
someone the Agency is satisfied is a fit and proper person to hold a license.
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Clause 44: Cannabis Agency may impose licence conditions
46. Clause 44 establishes that, after deciding whether or not to grant a license, the Agency
has the authority to impose any restrictions they determine on a specific license.
Clause 45: Cannabis production license subject to conditions
47. This clause ensures that all production licenses are granted subject to the same two
conditions being imposed: the license holder cannot distribute recreational cannabis other
than by selling it to the Agency, and that the license holder must permit the Agency to inspect
the premises at which cannabis is being produced.
Clause 46: Matters to be specified in a cannabis production license
48. This clause establishes that a license must specify the name of the person who holds
the license, the period of time for which it applies, any conditions imposed by the Agency
and any other matter specified in the rules which can be created by the Minister.
Division 2 - Cannabis distribution license
Clause 47: Application for cannabis distribution license
49. Subclause 47(2) establishes that the Agency can specify the form through which a
person can apply for a license to produce cannabis (a cannabis distribution license).
Subclause 1 establishes that a person can apply to the agency, using the form, for a license.
Clause 48: Cannabis Agency must decide whether to grant cannabis distribution license
50. Clause 48 establishes that the Agency has the authority to decide whether or not to
grant a license. It grants the Agency the authority to have regard to any matters that they
consider relevant in granting the license, but restricts the Agency to only grant a license to
someone the Agency is satisfied is a fit and proper person to hold a license.
Clause 49: Cannabis Agency may impose license conditions
51. Clause 49 establishes that, after deciding whether or not to grant a license, the Agency
has the authority to impose any restrictions they determine on a specific license.
Clause 50: Cannabis distribution license subject to conditions
52. This clause specifies six conditions which must be adhered to when distribution
licenses are granted by the Agency. These conditions would mean that:
● Recreational cannabis could not be distributed to people under 18 years of age
● The only recreational cannabis which could be distributed is that which was sold by
the Agency
● Recreational cannabis would be sold in plain packaging which has on it any warnings
determined by the Agency at the time of distribution
● Recreational cannabis would only be distributed by people who have been trained in
mental health first aid and the responsible distribution of it
● The premises at which cannabis is sold could be, at any time, inspected by the
Agency.
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Clause 51: Matters to be specified in a cannabis distribution license
53 This clause establishes that a cannabis distribution license must specify the name of
the person who holds the license, the period of time for which it applies, any conditions
imposed by the Agency and any other matter specified in the Rules which can be created by
the Minister.
Division 3 - Other matters
Clause 52: Renewal of cannabis license
54. This clause establishes that the holder of a license (either a distribution or production
license) may apply to have their license renewed. The renewal application must be made
before the license expires. The clause would provide that an application for renewal that is
made before a licence expires is taken to be an application for a new licence. The clause
provides that the process and conditions set out in Divisions 1 or 2 of the bill would apply to
that renewal application depending on whether the licence is for production or distribution
Clauses 53 and 54
55. These clauses will allow the Agency to revoke a license if the Agency has reason to
believe that the conditions of the license have been contravened. They will require the
Agency to give written notice to licensees, including the reasons for and date of effect of the
revocation. Clause 54 establishes that in addition to revocation under proposed section 53,
subsequent legislation enacted may provide for the cancellation, termination or variation of
licences. It states that no compensation is payable to the license holder for licences revoked,
cancelled, terminated or varied.
Part 7 - Offences and civil penalties relating to cannabis
Clause 55: Physical elements of offences
56. This clause refers to the structure of clauses 56, 57, 57A and 58, all of which will
establish new criminal offences. Specifically, it specifies that subclause (1) of each clause
outlines the actions or 'physical elements' that if undertaken would amount to an offence
against this bill. The clause and note both refer to Chapter 2 of the Criminal Code which
contains general principles that apply to all criminal offences.
Clause 56: Unlicensed production of recreational cannabis
57. This clause establishes the offence of unlicensed production of recreational cannabis'.
58. Subclause 56(1) establishes that this subsection is contravened if a person possesses 7
or more recreational cannabis plants and they produce recreational cannabis without holding
a cannabis production license.
59. Subclauses 56(2), 56(3) and 56(4) establish the fault-based offence, strict liability
offence and civil penalty provisions for this offence.
60. The provision of strict liability is used in this bill because the burden of proving intent
in relation to violating a license condition is too much of an unnecessary burden on the State.
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When weighed against the need to ensure compliance with license conditions, a strict liability
offence is reasonable under these circumstances.
Clause 57: Unlicensed distribution of recreational cannabis where person possesses 7 or
more plants
61. This clause establishes the penalties that apply to person who commits an offence of
distributing recreational cannabis without a license when a person possesses 7 or more plants.
62. Subclause 57(1) establishes that the conditions under which this offence is
committed- possessing 7 or more recreational cannabis plants, distributing recreational
cannabis and not holding a licence.
63. Subclauses 57(2), 57(3) and 57(4) establish the fault-based offence, strict liability
offence and civil penalty provisions for this offence. See Paragraph 60 for the justification of
the use of a strict liability provision.
Clause 57A: Unlicensed sale etc. of recreational cannabis where person possesses fewer
than 7 plants
64. This clause establishes the penalties that apply to a person who commits an offence of
selling, offering for sale or otherwise supplying for consideration recreational cannabis when
the person possesses 6 or fewer recreational cannabis plants.
65. Subclauses 57A(2), 57A(3) and 57A(4) establish the fault-based offence, strict
liability offence and civil penalty provisions for this offence. See Paragraph 60 for the
justification of the use of a strict liability provision.
Clause 58: Breach of cannabis license condition
66. This clause establishes the penalties that apply if a person contravenes the conditions
of their cannabis license.
67. Subclauses 58(2), 58(3) and 58(4) establish the fault-based offence, strict liability
offence and civil penalty provisions for this offence. See Paragraph 60 for the justification of
the use of a strict liability provision.
Part 8- Enforcement of civil penalty provisions
Clause 59: Appointment of authorised officers
68. This clause establishes that the CEO of the Agency is authorised to appoint a member
of the staff of the Agency to act as an authorised officer to enforce the civil penalty
provisions outlined in Part 7 of the Act.
Clause 60: Monitoring powers
69. This clause establishes that proposed provisions in this bill will be subject to the
monitoring provisions outlined in the Regulatory Powers(Standard Provisions) Act 2014.
This Act provides a standard set of provisions, including for monitoring and investigation
powers, and to monitor whether information given to the Commonwealth is correct.
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70. Subclause 3 describes how Part 2 of the Regulatory Powers Act applies in relation to
the provisions of this Act. It specifies which officers are the authorised officers and which
courts have apply to this Act.
Clause 61: Investigation powers
71. This clause establishes that the civil penalty provisions in this bill and an offence
against the Crimes Act 1914 or the Criminal Code that relates to this bill are subject to
investigation under Part 3 of the Regulatory Powers Act.
Clause 62: Civil penalty provisions
72. This clause will establishes that the civil penalty provisions of this Act are
enforceable under Part 7 of the Regulatory Powers Act. Part 7 of the Regulatory Powers Act
creates a framework for using injunctions to enforce provisions.
73. Subclauses 62(1) and 62(2) are included to establish how the enforceable civil penalty
provisions operates in relation to the Regulatory Powers Act.
Clause 63: Infringement notices
74. This clause is included to establish how the infringement notices relate to Part 5 of the
Regulatory Powers Act.
Clause 64: Injunctions
75. This clause is included to establish how the civil penalty provisions are enforceable
under the Part 7 of the Regulatory Powers Act.
Part 9- Miscellaneous
Clause 65: Review of decisions by Administrative Appeals Tribunal
76. This clause establishes that a person may appeal to the Administrative Appeals
Tribunal for a review of any decisions made by the Agency.
Clause 66: Rules
77. This clause allows the Minister to make rules, by legislative instrument, with regards
to this bill.
Clause 67: Independent review
78. This clause establishes that an independent review of the scheme established by this
bill must be completed within two years after commencement. This review must include
public consultation, include a report to the Minister and be made publicly available via the
Agency's website and tabled in the Australian Parliament.
79. If the report makes recommendations, the Minister must respond to these
recommendations as soon as practicable, and within 6 months after receiving the report, table
this response in the Australian Parliament.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Australian Cannabis Agency Bill 2018
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill
The Bill has the effect of regulating the production and distribution of recreational cannabis,
other than for personal use. It establishes the Australian Cannabis Agency and a licensing
scheme that will be used to regulate the production and distribution of recreational cannabis.
It introduces penalties for contravening the conditions of the licenses.
Human rights implications
This Bill engages human rights.
The Bill introduces offences of strict liability. These provisions are considered acceptable
because the defence of mistake of act is still available to a person.
The following human rights are promoted by this Bill:
Article 1 of the International Covenant on Economic, Social and Cultural Rights, which
states:
"All peoples have the right of self-determination. By virtue of that right they freely
determine their political status and freely pursue their economic, social and cultural
development.
All peoples may, for their own ends, freely dispose of their natural wealth and
resources ... "
Article 1 of the International Covenant on Civil and Political Rights states that:
"All peoples have the right of self-determination. "
By regulating the production and distribution of recreational cannabis, other than for personal
use, this bill will allow people to exercise their right to self-determination by engaging in
drug use in a way that is regulated and therefore safer and more transparent.
Conclusion
This Bill is compatible with human rights because, to the extent that it may impact human
rights, the impact is for a legitimate objective, and is reasonable, necessary and proportionate
as outlined above.
This Bill does not raise any issues with the human rights recognised in the international
instruments referred to in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Senator Richard Di Natale
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