Judge voices concerns about legal cannabis scheme’s ‘illicit’ sourcing of seeds and plants

A judge has expressed concern about licensed cannabis cultivators being legally allowed to source seeds and plants from "illicit sources", saying the process gives "the appearance of government-sanctioned cultivation of cannabis".

The issue was raised this month at the sentencing of drug dealers Garry Douglas McFarlane and Melanie June Afato, who claimed their cultivation activities were in part for lawful purposes.

The Ministry of Health has since confirmed licensed growers can source seeds and plants from "illicit sources", who do not need to be named, for the cultivation of cannabis for medicinal purposes.

Although it was "deemed necessary" at the beginning of the Medicinal Cannabis Scheme, which came into effect in April 2020 with the commencement of the Misuse of Drugs (Medicinal Cannabis) Regulations 2019, it was still allowed.

The health minister and Labour's health spokesperson have not answered questions put to them by NZME about whether the government was condoning the illegal cultivation of cannabis by allowing "illicit sources" to supply cannabis seeds and plants to the scheme.

McFarlane and Afato transformed their home into a "large, sophisticated" cannabis growing operation and allegedly banked more than $90,000 through sales of the drug.

While they were caught with more than 1kg of cannabis head stashed in jars, snaplock bags, and rolled into "tinnies", they claimed part of their cultivation activities were connected to providing seeds to licensed companies.

But it was only their intention because they had not reached the point where they had sold any seeds.

If they had, the couple, who both had previous drug-related convictions and did not have a licence to supply the companies, would have been considered an illicit source.

In New Plymouth District Court, Judge Gregory Hikaka was given letters in support of McFarlane and Afato from two licensed cannabis companies and submissions were made by defence counsel explaining how companies were allowed to buy seeds and plants from illicit, or unlicensed, sources.

Judge Hikaka voiced concern throughout the hearing about the process, and said it seemed unusual.

"It appears that there's an element of intent to provide something that the lawfully licensed people ... are entitled to buy from the black market.

"Perhaps I've overstated it but it gives the appearance of government-sanctioned cultivation of cannabis."

In response to questions from NZME, Chris James, group manager Medsafe, said if a licence holder with a cultivation activity wished to obtain illicit seeds and plants, a declaration must be submitted to the Medicinal Cannabis Agency.

He said a declaration could be made for up to 20 plants and 50 seeds of a variety of cannabis that was established in New Zealand and if accepted, medicinal cannabis products could be lawfully manufactured.

There was no limit to the number of declarations that could be made and the name of the illicit source was not required.

"The ability to source plants and seeds from illicit sources was deemed necessary at the beginning of the scheme to enable access to seed or plants with desirable genetics," James said.

"Now the scheme has been in place for a number of years, the number of declarations has reduced significantly."

James said the ability to submit declarations, which comes with a fee, was not affected by the current review of the Misuse of Drugs (Medicinal Cannabis) Regulations 2019.

But Labour health spokeswoman Dr Ayesha Verrall said: "This is an issue that would be suitable to be considered during the review of the act, which is currently underway."

Verrall did not answer whether Labour intended illicit sources supplying the Medicinal Cannabis Scheme to be a temporary measure when the former government brought it in, or whether Labour believed that it should now, four years on, come to an end.

Questions around whether this could potentially provide a defence for people if prosecuted for growing cannabis without a licence, or if it sent a confusing message to the public about the government's stance on illegal cannabis cultivation, also went unanswered.

Posed with similar questions, Minister of Health Dr Shane Reti said he had nothing further to add, given the Ministry of Health had already responded to an NZME query on the topic.

After pointing out it was a different line of inquiry to what the ministry had handled, a press secretary said Reti could not comment on any decision made by a judge or the courts.

When NZME clarified it was seeking a general response on the issue, and asked if the minister was refusing to comment on whether it was time to look at changing the law so illicit sources could no longer supply the Medicinal Cannabis Scheme, the press secretary did not respond.

A home transformed into a growing operation

At McFarlane and Afota's sentencing, defence lawyer Josie Mooney, who represented McFarlane, submitted the extent of their cultivation was for breeding seeds to then sell.

"They are in this difficult position where the labs that are lawfully manufacturing cannabis are themselves not engaging in breeding programmes for the cannabis and they are lawfully able to purchase the seeds but the seeds have to be of a certain quality so someone such as Mr McFarlane is breeding these seeds."

Mooney said they were yet to sell any seeds and McFarlane accepted they had gone about things wrong.

According to the Crown's summary of facts, Afato and McFarlane had been growing cannabis since 2021 in two bedrooms of their three-bedroom house in Clinton, South Otago.

On 23 September, 2022, police searched their home and found the "large, sophisticated" cannabis operation which comprised 221 separately potted plants, at all stages of maturity.

Jars that held a total of 526g of cannabis head and 275g of cannabis seeds were found, along with 17 snaplock bags containing 510g of cannabis between them, and 16 "tinnies", with a total weight of 28g.

According to the summary, between July 2021 and September 2022, the couple sold cannabis to people in the South Otago area.

A preliminary financial analysis showed during that period McFarlane had $12,310 of unexplained deposits made into his account, while Afato had about $79,000.

In October 2022, New Zealand Customs seized 18 cannabis seeds that had been sent in a letter addressed to Afato from an unknown supplier in Italy.

Home detention with a warning

Mooney said one of the cannabis companies the couple were involved with was willing to employ them voluntarily, meaning they would not need a license and would avoid the issue of having convictions.

"It has been a daunting and difficult process and there is very much no risk of [McFarlane] reoffending ... He has a path, he is going through it, and he does not want to lose that opportunity again."

In the meantime, he was looking at employment in other industries.

Mooney suggested that when assessing a starting point, Judge Hikaka could take into account the background with the licensed companies, and McFarlane's lesser role in the offending.

But Crown prosecutor Holly Bullock pointed out the background Mooney had raised was not a part of the summary of facts the couple had accepted and pleaded guilty to.

Defence lawyer Kylie Pascoe said her client, Afota, accepted she was the principal offender.

While she was assessed as a high risk of reoffending, Pascoe said Afota had genuine health issues and had previously grown cannabis for medicinal reasons but now had a prescription medicine to address that.

Her risk of reoffending would be further mitigated by her willingness to find work in other industries, as well as her motivation to work legally with cannabis.

The couple faced joint charges of selling cannabis, importing cannabis seed, cultivating cannabis and possession of cannabis for supply.

In sentencing them to 12 months of home detention, Judge Hikaka said it would test their commitment to abide by the law.

They were warned if they reoffended in related ways, the outcome would be prison.

An order was made for the destruction of the drugs and drug equipment and the Commissioner of Police has filed proceedings under the Criminal Proceeds (Recovery) Act 2009 in relation to the couple's money.

- This story originally appeared in the New Zealand Herald.