New Zealand could legalise recreational marijuana in 2020 — and this Aussie cannabis company wants a toke of the booming market to follow

• Sydney-based Greenfield MC will be the first Australian-owned company to be allowed to cultivate cannabis in New Zealand under a new research joint venture with Wepiha Health Co.

• The drug is tightly regulated in New Zealand but Jacinda Ardern's government has agreed to hold a referendum in November 2020 which could see cannabis legalised for recreational use.

• Were New Zealanders to vote in favour of legalisation, Greenfield says it will be well placed to service the emerging market for cannabis-based wellness products and 'nutraceuticals'.

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New Zealand might be world-renowned as a producer of high-quality reggae, but cannabis — the plant so hallowed in the musical genre's sub-culture — remains tightly controlled in the country.

Cannabis is defined as an illegal substance under New Zealand's Misuse of Drugs Act and cultivating or supplying the drug can land you as many as 14 years in prison – and even possession could get you three months.

Even in the medicinal market, the usually-progressive Kiwis maintain a reasonably hardline stance. Just one cannabis-based medicine — multiple sclerosis treatment Sativex — has been approved for doctors to prescribe to patients in New Zealand. All other medicinal cannabis products need ministerial approval before they can be prescribed.

But all that may be about to change with a vote slated for November 2020 that could see the floodgates opened to a booming recreational market. In handing down the nation's budget in May 2019, Prime Minister Jacinda Ardern announced an $13.4 million allocation to hold a referendum on legalisation of cannabis — and one Australian company looks set to capitalise.

The emerging green fields of New Zealand's cannabis industry

Fresh off the heels of its deal with Canadian company EPHS to cultivate cannabis in Australia, Sydney-based Greenfield MC is turning its attention to New Zealand.

The company has announced a joint venture with New Zealand's Wepiha Health Co. and EPHS to cultivate the drug, making it the first Australian-owned company to do so across the Tasman, it announced in a statement to the media. The project will initially be for research purposes only, in line with current regulations, with a specific focus on developing cannabis treatments for health conditions that disproportionately impact indigenous Maori communities.

But Greenfield could also see itself moving well beyond the research, and even medicinal, market if the legal environment changed — as it very well could.

"If [the 2020 referendum] is passed into legislation then Greenfield MC will be ideally positioned on the ground in NZ to branch out into new areas beyond medicinal cannabis," a Greenfield spokesperson said in an email.

The spokesperson clarified to Business Insider Australia the primary focus of any foray beyond medicine would be on the "nutraceuticals and wellness products", which are considered recreational under New Zealand law.

But when asked directly whether Greenfield would consider supplying product to recreational dispensaries if a 'yes' vote was successful, the company's CEO Nicholas Hanna — a lawyer with a lot of experience navigating Australia's drug regulations — left the door open.

“Greenfield MC is currently focused on the medical and wellness markets, though will adapt as the industry evolves," Hanna told Business Insider Australia.

If they were ever to go beyond wellness products and push further into the recreational market, it would be somewhat at odds with comments the company's chief medical officer Sree Appu has previously made.

Dr Appu, a top oncologist, previously told Business Insider Australia that Greenfield's competitive advantage is its medical clout and clinical credentials.

“There’s a lot of buzz around the enormous potential of the medicinal cannabis market and people from all walks of life are jumping on board ... however, we’re talking about medicine here — we’re talking about a product that needs to be prescribed by doctors and dispensed by pharmacists," Appu said.

Asked whether the medical board he chairs would support the use of cannabis for recreational purposes, Appu said Greenfield's doctors wouldn't be involved in that side of the business were it to eventuate.

"The role of the medical board is limited to advising on the medical applications of cannabis, including patient access and drug efficacy," he said.

Greenfield's directors declined to answer whether it would support legalisation of recreational marijuana in Australia.

But of course, any ambitions the company — or anyone else — may have to supply weed to customers for recreational use in New Zealand is at this stage entirely hypothetical. The 'yes' vote would first need to win the referendum.

New Zealand's hazy record of honouring the outcomes of referendums

And even if Kiwis do vote in favour of legalisation, there is conjecture over whether the vote would even be binding.

Even though both Prime Minister Jacinda Ardern and Justice Minister Andrew Little have described the vote as a "binding referendum", public broadcaster Radio New Zealand points out that technically it is not and that the country has a chequered history of implementing the wishes of the people.

Of the seven non-binding referendums held in recent years in New Zealand, just once did the government and parliament act in accordance with the positive vote, RNZ reminds us.

Maybe that's why — more than 12 months out from the vote — the campaign for hearts and minds on the topic of recreational marijuana is well under way.

Former Labour Prime Minister Helen Clark has been vocal just this week in favour of the proposition. In an article published by The Guardian, Clark makes the case that prohibition "doesn't work anywhere" and especially not in New Zealand, where she says the Maori population has been particularly victimised by the hardline stance.

"A 'yes' vote in the 2020 referendum will be positive for social justice and equity, contribute to reducing the country’s excessively large prison population, and enable those health issues associated with cannabis to be dealt with upfront," Clark wrote, following a report by her public policy foundation which came to a similar conclusion.

Clark also notes that 76.7% of New Zealanders have tried the drug by the age of 25 despite its illegal status and harsh penalties, indicating the market opportunity may be especially large for recreational marijuana.

No wonder medicinal cannabis companies like Greenfield are considering taking the toke.