It’s been just over a year since recreational cannabis was legalised in the Australian Capital Territory (ACT), home to the nation’s capital city of Canberra.

Announced on September 25, 2019, and brought into effect on January 31, 2020, the rules make it legal to possess and personally use small amounts of cannabis.

The territory was the first jurisdiction in Australia to put a policy like this in place, and it’s still the only part of the country where cannabis is recreationally legal. So what are the biggest takeaways investors should consider after this monumental change? Here’s a closer look at what happened.


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Cannabis in the ACT: The territory’s path to legalisation

As mentioned, the changes in the ACT’s cannabis laws were first revealed on September 25, 2019, although they didn’t come into effect until January 31, 2020. Recreational legalisation ultimately pulled through, but it faced strong opposition from the federal government.

Attorney-General Christian Porter was particularly displeased. He was quoted by Reuters in October 2019 as calling the reforms “crazy” — he pointed out that the new rules go against Commonwealth law, rendering them essentially ineffective.

“The ACT laws removed the criminal component at a territory level but didn’t establish anything that is a positive right to possess, which means that there’s no defense to the Commonwealth law that criminalizes amounts under 50 grams,” Porter said.

“My advice and the advice that I’ve provided to the ACT attorney-general is that it is still against the law of the Commonwealth to possess cannabis in the ACT.”

Ultimately the ACT did do what it set out to do. The reforms came in large part thanks to Australian Labor Party backbencher Michael Pettersson, who introduced a private members bill in 2018 that he deemed “sensible” — after being redrafted, it was passed.

“This model is different to what most people think of cannabis legalisation,” he said. “This isn’t Colorado, this isn’t Canada. There are no dispensaries getting set up under the system. This (bill) simply means that individuals caught with small amounts … for personal use will not face criminal charge.”

Cannabis in the ACT: What are the rules?

Since January 31, 2020, adults in the ACT have been permitted to grow two cannabis plants (with a maximum of four per household). There are also specific rules about where and how plants can be propagated — they cannot be accessed by the public or grown using hydroponics or artificial light.


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Adults can also possess up to 50 grams of dry cannabis per person, or 150 grams of wet cannabis, for use in their own home — this has been dubbed personal use.

But it is still an offence to smoke or use cannabis in a public setting, or to expose a child to cannabis. In fact, selling, gifting or giving weed or even cannabis seeds is still an offence. It’s also worth noting that — as Porter pointed out —  the new ACT rules still carry a degree of risk as they directly conflict with Commonwealth law regarding cannabis.

“This does not entirely remove the risk of people being arrested under Commonwealth law, and we are being up front with the community about that,” ACT Attorney-General Gordon Ramsay said at the Legislative Assembly in September 2019.

“The ACT’s legislation attempts to provide a clear and specific legal defence to an adult who possesses small amounts of cannabis in the ACT, but is prosecuted under Commonwealth law.”

Cannabis in the ACT: Lessons from year one

In some ways it’s still too early to tell how successful the ACT’s new cannabis program may be. With limitations from Commonwealth law, the likelihood of a regulated commercial cannabis market in the ACT appears unlikely at this time.

That said, data from ACT police given to ABC shows no meaningful or dramatic increase in drug arrests or drug-driving charges since legalisation.

Aside from that, it’s possible that the ACT may make progress on decriminalising other substances. In 2021, the territory’s Legislative Assembly is set to introduce a new bill to make Canberra the first place in Australia to decriminalise illicit drugs, including MDMA, heroin and methamphetamines.

Savvy investors would be wise to closely monitor the ACT, although changes to Commonwealth law to legalise cannabis aren’t on the horizon quite yet.

Don’t forget to follow @INN_Australia for real-time updates! 

Securities Disclosure: I, Ronelle Richards, hold no direct investment interest in any company mentioned in this article.


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