Cannabis aficionados around the globe will be closely watching the general election in New Zealand this weekend as our neighbours across the Ditch vote on whether to give the thumbs up to legal recreational marijuana.

Legalisation would bolster the Australian cannabis industry by adding to its global respectability and perhaps adding pressure for ending the prohibition on recreational marijuana here, analysts say. One company executive calls it a “major milestone” for the industry.

But we won’t know whether the referendum has passed for nearly another two weeks – and even if it does, it won’t immediately create any market opportunity for ASX-listed cannabis companies.

That’s because the regulatory framework that Kiwis are voting on specifically prohibits cannabis imports (except for cannabis seeds) in favour of creating a domestic industry. Exports are also forbidden.

Pot referendum too close to call

Recent polls suggest turnout will be crucial for the referendum, with a recent Newshub-Reid Research Poll putting the “no” ahead with 50.5 per cent support and just 37.9 per cent favouring legal weed. But a different poll by UMR put the “yes” vote up, 49 per cent to 45 per cent.

“The polls have been moving quite a lot over the last six months or longer,” Cassandra Hunt, managing director of cannabis analytics company FreshLeaf Analytics in North Sydney, told Stockhead.

“Really, according to the polls and most people I know in the industry, no one knows which way it will go.”

Some 1.4 million Kiwis have already cast ballots ahead of the Election Day on Saturday, but under New Zealand’s byzantine electoral system a tally of the cannabis referendum votes won’t be taken this weekend. It will instead be taken during a mandatory election recount.

Preliminary results of both the cannabis referendum and a referendum to legalise assisted dying will be released on Friday, October 30, New Zealand’s Electoral Commission says. The final results will be released a week later, on November 6.

The party and candidate results will, however, be released this Saturday night, with centre-right National and Judith Collins trying to unseat Prime Minister Jacinda Ardern of the Labour Party.

Ardern is heavily favoured but hasn’t said how she’s voting on the cannabis initiative.

The Green Party is backing it, however, and a better than expected vote for them on Saturday might be good news for the movement for legal weed.

Legalisation in Australia?

“I think the cannabis community is watching very closely, hoping that the outcome is in the favour of the bill, that it might reignite the conversation about the legalisation of recreational cannabis in Australia,” Hunt said.

Just a few years ago that was a hot topic for debate, but the conversation has died down recently and the industry has pivoted to pharmaceutical cannabis to treat medical issues. Companies are hoping that might change if the Kiwis legalise, Hunt said.

In the United States, sentiment has shifted dramatically in favour of legalisation since Colorado and Washington became the first two states to controversially permit recreational cannabis in 2012.

In 2016, cannabis referendum measures passed in eight out of nine states, and on November 3 voters in four states – Arizona, New Jersey, South Dakota and Montana – will vote on whether to legalise pot at the same time as they cast ballots for Donald Trump or Joe Biden.

The New Zealand measure could raise about $NZ490 million in tax, including GST, according to a report by the NZ Institute of Economic Research.

The measure asking Kiwis if they support the proposed Cannabis Legalisation and Control Bill is nonbinding on the government, but if it passes the incoming government would be in a position to legalise cannabis by simply passing the bill.

The legislation would permit recreational cannabis for those 20 years old and older, with purchases limited to physical stores rather than e-commerce or mail order venues. Advertising would be forbidden and smoking cannabis would be limited to in private.

Commercial growers would need to be licensed and getting one might not be easy,  with priority given to growers who can show their business would help Maori and people from economically deprived areas.

What ASX-listed cannabis companies say

Perth-based medical cannabis producer Little Green Pharma (ASX:LGP), which Tuesday announced it had been granted a Therapeutic Goods Administration Good Manufacturing Practices license for its recently commissioned manufacturing facility in southwest WA, called the initiative good news.

“Little Green Pharma welcomes the upcoming NZ cannabis legalisation referendum as evidence of the continuing global trend towards broader, mainstream acceptance of cannabis as a product with high-value properties, to be explored and safely utilised by the global community,” said Paul Long, chief operating officer.

“As for the impact on Australian industry, given their existing in-market brand credibility and production experience LGP believes those ASX listed companies who are presently producing are most likely to benefit from a legalisation determination.

“As always, the Company welcomes any initiative that improves access for suitable patients to safe, high-quality cannabis products.”

Pharmaceutical cannabis company Incannex Healthcare (ASX:IHL) sees the initiative in perhaps even more bullish terms.

“The forthcoming referendum in NZ is a major milestone in the history of the cannabis industry,” chief medical officer Dr Sud Agarwal told Stockhead in an email.

“Whilst my interest is exclusively in the medical space, one of the major challenges with prescribing to some patients (particularly the elderly) is that they can view cannabis as a drug of addiction and something illegal.

“New Zealand are now voting on creating a society which tolerates cannabis and, in effect, socially normalises cannabis consumption.

“This would assist physicians who battle with the stigma of being prescribers of medicinal cannabis, and patients who struggle with the stigma of being recipients of medicinal cannabis.”

But Alex Keach, co-founder and managing director of Tasmanian hemp grower ECS Botanics (ASX:ECS), was a little more subdued about any possible impact in Oz.

“Apart from making cannabis more mainstream and showing good precedence for Australia to follow suit, that is about it!” he said in an email.

“Australian cannabis companies cannot export or supply the recreational market in NZ, so there is no direct opportunity!

“In our view the trick is not ‘recreational cannabis’, rather making medicinal cannabis cheaper and easy to access from a regulatory point of view.

“This will also ensure the correct products are prescribed appropriately and readily accessible to those who need it most.”