Why cannabis is in such short supply in NZ and why it’s not going to get better anytime soon

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There has been some media recently on the cannabis shortage in NZ, but not much understanding of why it is happening. No one seems to be putting the pieces together to help explain the market dynamics at play.

There are two main forces that are seeing cannabis shortages around the country. The first is the change of law that lowered the evidential threshold for Police to claim people are profiting from illegal activities and the other is the quiet tsunami of meth being imported that is now changing the economic model for drugs.

When the Police changed laws to lower the evidential threshold from beyond reasonable doubt to balance of probabilities when pursuing assets from the proceeds of crime, they inadvertently  changed the odds for criminals.

If you could have your house seized and property taken for making money from cultivating drugs, you may as well make as much as you can and rather than spend it on assets, live on cash. Cannabis cultivation – while extremely profitable – takes at least 3 months to get a payout on.

Meth is a far more lucrative product for cash payouts. Instead of waiting 3 months to make a profit from a  cannabis crop, gangs can make the same amount from a cook up of meth in a weekend.

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The Headhunters, whose ties with Triads give them access to huge amounts of pseudoephedrine -(the base ingredient for meth),  has given them an expansion throughout the regions that is fuelling a meth binge that is devastating the regions and the South Island.

This expansion is creating huge tensions with other gangs who have previously used cannabis as their main source of income. These gangs are now needing to turn to manufacturing their own meth to compete with the Headhunters market dominance and cashed up influence….

Gang warfare coming soon to a town near you

Simmering gang tensions will soon erupt into warfare, gang sources say.

It has to do with one gang’s nationwide expansion into the methamphetamine market. And multiple busts and millions of dollars’ worth of property and meth seized have not halted the gang’s trade.

The Head Hunters, the gang the public associate with Sir Paul Holmes’s step-daughter, Millie Elder-Holmes, and her slain boyfriend Connor Morris, are one of the top distributors of methamphetamine in New Zealand.

And it’s not just the police who’ve noticed. Other gangs have, too. And it’s going to come to a head.

“All I’m gonna say,” a Mongrel Mob source said, “is that everyone has their eye on what they’re gonna do now. We see them setting up in the hood – we just gonna let it lie for now. But they gonna push it soon and something will go down and it ain’t gonna be pretty,” he said.

Organised Crime Detective Superintendent Virginia Le Bas said the Head Hunters’ success so far is that unlike other gangs, members operate on a business model.

“Mongrel Mob and Black Power are individual groups,” Le Bas said. “They don’t have an allegiance to a national group, they work individually in their own centres.

“The Head Hunters have one strategy: They all report back to Auckland. They are organised.

“They could have expanded years ago, but they didn’t,” said a Black Power source who preferred to remain anonymous.

“Now they are and they’re going all out. I know they are setting up HQs in towns, heading south [from their Auckland base]. They are going to have a presence across the country soon. They are moving fast.”

The Head Hunters have been known to “patch over” small operators, bringing them into the business model. In November 2015, the Head Hunters patched over the Epitaph Riders in Christchurch. The headquarters there now flies a Head Hunters flag.

The Black Power source said the gang’s reach is strong both inside prisons and out on the streets. The police say the gang’s reach even extends outside New Zealand.

“It is obvious that the Head Hunters have connections with Asians involved in organised crime,” Le Bas said. “We believe this is how the gang is getting the precursors to methamphetamine from Asia.”

The Head Hunters are running a disciplined operation, says the Black Power source, which is backed up by a Head Hunter who wished not to be named.

“We don’t do P, we aren’t allowed to do P and we don’t want to, either. We keep fit and we are like a family,” he said.

“Yeah, we have heaps of whanau all over the country now, because the people want us there.”

The Black Power member said the Head Hunters are not allowed to smoke meth and are encouraged to do physical activity.

“They are not allowed to smoke the stuff. Bad for bizzo if you have crackheads selling crack. I know a few snort it to get around the rule.”

Le Bas said police know about the gang’s methamphetamine plans, which is the reason for the expansion.

“They are disproportionately represented in the manufacturing and distribution of methamphetamine around New Zealand.

“The Head Hunters come up regularly in many of our operations where we are investigating methamphetamine distribution throughout New Zealand.”

On January 12, Suman Eve Kumar was sentenced to three years’ jail in the Nelson District Court on seven drugs charges.

The court heard how she turned to P after the sudden death of a child.

Later, she fell in with the Head Hunters gang, fronting a lucrative commercial drug dealing operation with at least four employees, supplying methamphetamine and LSD in Nelson Bays.

On December 21, a raid on the Head Hunters netted drugs, $20,000 in cash, $6500 worth of melted-down gold jewellery and a five-tonne digger.

Also seized were a stolen motorcycle and 1kg of ephedrine, enough to make 68 grams of methamphetamine.

Police seized the items after searching five properties in Whangarei with 11 people connected to the gang arrested and charged with a range of meth charges.

It’s not just items seized. Police are also investigating the Head Hunters’ property portfolio.

“We know, and most people around the communities [where the gang has recently expanded] will know, the Head Hunters have got properties and their fight clubs. They don’t make any secret of what they’ve got,” Le Bas said.

“That’s something we’re interested in – how they’ve established the funds to purchase the properties. And if it’s related to crime, then there’s work that we can do in recovering those assets,” she said, through the Criminal Proceeds (Recovery) Act (2009).

Many of the crack-contaminated houses people read about are Head Hunter properties, she said.

A Mongrel Mob source said the expansion across the country is because the P trade has become a big money-spinner in rural centres.

And that explains why the Head Hunters are flouting the unwritten rules that New Zealand gangs operated on for so many years – everyone knew whose turf was which and all kept, generally, to their own.

“The Head Hunters have now said, screw the rules. We want it all,” the Mongrel Mob source said.

“It’s pretty massive how fast they are rolling out across the country, but you know something’s gonna give soon. When you start trying to dictate how things should roll in towns you’ve just moved into, the people and gangs can only stand so much, eh?”

But all three gang members agree that when the shooting starts, those not in a gang have nothing to fear.

Indeed, in a minor incident in a Waikato town recently, some Head Hunters new to the town were shot at. Police have refused to comment over the incident.

“If you’re not in it, then you’re all good,” the Mob source said.

Le Bas agrees.

“There’s a lot more maturity around gangs and what their retaliation looks like.”

…we are seeing the unintended blowback of prohibition laws and it’s going to spark a massive amount of violence as provincial gangs fight for power.

There is no surprise that so many houses are now being tested for meth.

One way of taking the pressure out of this would be the decriminalisation and legalisation of cannabis. That would give those gangs being pushed around by the meth dominated gangs a legitimate means of business with all the regulation that would bring while keeping the tough proceeds of crimes act laws to tackle those meth dominated gangs.

Unfortunately, the Government and Police seem incapable of understanding the market dynamics at play here and are pursuing policy that will now end with an eruption of violence.

 

28 COMMENTS

  1. The point here is that if/when pot is regulated anybody with a criminal record will be immediately excluded from the industry.
    No gang will ever make another penny from weed once it is regulated.
    I have a mate in Colorado. Made the best concentrates in the State. Was excluded from any industry involvement due to a drink driving charge 30 years ago.
    The answer is legalization and regulation, but I am afraid there will be no money it in for ex crim’s.

    • My last experience with cannabis was over 20 years ago & I have no idea about today’s drug scene but most for users I knew it was an occasional thing for a good time & they led productive lives. The odd person who had to use every day tended to lose interest in useful things but were mostly harmless unlike the greater number who developed problems with alcohol & could be dangerous. Martins (and Kofi Annan, Don Brash etc) suggestion that drug use is a health issue rather than a criminal issue is the only way that things will get better with the added benefit that criminal supply of drugs will reduce using economic logic rather than police force.
      The money involved in the alcohol industry are totally against this idea as grow your own would destroy their profits.

  2. Hah! Cause and effect; the great reality.

    You get back what you put out; including the Police; and including the government.

  3. Maybe, just maybe if they relaxed a little didn’t jail and otherwise socially hobble our youth we may have the chance to get a better idea as to how just to tackle regulation.
    If you look at the estimated 500 000 New Zealand cannabis smokers, assume that each would comfortably consume 1 gram per week,(some less others more.) then you sold that gram to them @~$20 per gram, taxing it @15% on sales amounts to nearly $104 million in annual taxation revenue. I only imagine it may save the courts a bit of coin and just to top it off the freeing up of police time to go deal with meth. Just a couple of simple and direct ideas to offer this debate as it seems to me to be a no brainer.

  4. The answer is to decriminalize all drugs meth included. You could obtain free meth if you agree to registration as an user and agree to treatment and monitoring. Canabis should be legal to grow and smoke but not to sell. There is no way it should be licensed and taxed as that is what Big Tobacco is waiting for. While your at it make the rule the same for tobacco. Problem solved, Head Hunters retired.

    • “There is no way it should be licensed and taxed as that is what Big Tobacco is waiting for.”

      Exactly. I can’t believe so many on the left echo David Seymour and right wing libertarians. Let capitalism replace the drug war? What a stupid idea.

      Harm reduction, not marketisation.

    • Its worked well for Portugal so far.

      Decriminalisation of all drugs, in that it is an “administrative” crime to possess more than 10 days supply. A small supply? No consequence.

      Less criminalisation. Less crime related to drugs. Less drug addicts in Portugal by all accounts. Less health problems with less addicts, a dramatic decrease in deaths and disease related to drug use.

      The evidence of this experiment from Portugal since 2000, 16 years of it now, is clear.

      Decriminalisation works. It saves money, reduces crime, saves lives.

      If we wanted to follow an evidence fact based route we’d follow the example set and documented by Portugal.

      To do any less is to base our law on emotion, not fact. And that’s just bloody stupid.

    • Yes. That’s the most sensible thing I’ve read yet. It’s ludicrous that drugs are criminalized or controlled for the good of the people, but there’s damn all help for those who have been damaged by them.

    • You can grow your own tobbacco, for personal use, legally, now. The stuff grows like a weed. The art is in the drying, flavouring and shredding process.

  5. I’m not sure I agree with the idea that gangs take up legal grow ops. On the one hand you have a criminal organisation who’s whole existence is to flip the bird to authority, and on the other you would be asking them to comply with all the government regulation, constant harassment from police and regulators, banks want touch them. At least the retail side I would keep gangs away from for sure.

    Nah, I don’t think there is any business men amount gangs at all. All the smarter ones left ages ago and became priests. The guys that are left are just muscle. They’ll get left behind real quick in the legitimate business world. There are a number of reasons gang members and the populous they recruit from haven’t started up legitimate business.

    I think we should attack gang membership in other ways by making sure poor people are not poor any more.

    • IMO Gangs also produce some of the WORST cannabis in the country , when its legalised no one will want to purchase their product because it is consistently of the LOWEST quality , not even properly ripened most of the time , leta lone cured like it should be …

    • Make selling illegal – but possession, consumption, cultivation or gifting would be legal?
      Basically – we don’t want a tobacco or alcohol-style ‘market’ appearing.

      • First off I have an extreme prejudice against meth.

        When you look at what cannabis prohibition in New Zealand and across the world has done. It has forced growers to use more sophisticated methods of manufacturing drugs every time there is a bust. So instead of using an acre of land to grow doop and ear a million bucks in a stationary fashion, you can now earn a million cooking meth in a room, and you can move around more easily in the hopes of evading police.

        Secondly half my mates from school are hooked on P and there all drop kicks. This one guy has his hand permanently stuck in the air like a spastic. I use my old freeing as an example because the effects of the meth trade is at a point where drastic measures must be taken.

        Legalise marijuana, do it any way you can, in home or in store, what ever. Attack the meth supply chain, there are huge sums of money being transferred, in the age of terrorist propaganda it is a ridiculous notion that large amounts of cash be allowed to flow unchecked around the black markets, bankers heavily involved in this area.

        It depends how the tax revenue derived from this new legal trade is spent. It would be stupid if this initiative ended up funding tax cuts. There is a lot of soul searching to do, a lot of question being thrown up but I think legalising canabis to the point of sale in shops would be the most politically exceptable in the short term.

  6. Yes. That’s the most sensible thing I’ve read yet. It’s ludicrous that drugs are criminalized or controlled for the good of the people, but there’s damn all help for those who have been damaged by them.

  7. Interesting perspective.

    Wasn’t cutting down on P one of National’s war on crime?

    I guess they got distracted in case someone managed to upload copywrite of their Hollywood buddies or get emails off Hager.

  8. “The hot and humid weather doesn’t help either, when growing indoors”

    Spider mite and sciarid fly population has EXPLODED this year…

  9. An additional problem with the shortage of outdoor cannabis is the proliferation of people making ‘synthetic’ cannabis in their kitchens. How much easier to get random herbs and pour chemicals over them, than go out and actually garden.

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