The New South Wales Government has announced plans to overhaul road laws affecting medicinal cannabis users, paving the way for eligible drivers to avoid losing their licences solely because they test positive to THC (tetrahydrocannabinol).

The proposed changes, which will be introduced to State Parliament, aim to create a new framework for drivers who legally use prescribed medicinal cannabis while maintaining existing penalties for motorists found to be impaired behind the wheel.

Under the current rules, drivers can lose their licence if roadside testing detects THC, regardless of whether they are impaired at the time. The proposed reforms would introduce a three-strike system for registered medicinal cannabis patients.

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Drivers enrolled in the scheme would still be required to undergo roadside drug testing and would face an immediate 24-hour driving prohibition if a sample is taken. However, if testing shows THC levels below a prescribed threshold, no further action would be taken.

Drivers who record THC levels above the threshold would receive a warning letter for a first or second detection within a two-year period. A third detection within the same timeframe could result in fines of up to $704 and a minimum three-month licence suspension.

Standard drug-driving penalties would continue to apply where alcohol is detected, multiple drugs are present, or a driver is found to be impaired.

The changes follow years of advocacy from medicinal cannabis patients and supporters who argued existing laws unfairly penalised people using legally prescribed medication.

Independent Sydney MP Alex Greenwich, who has publicly spoken about his own medicinal cannabis use, previously argued that patients were being forced to choose between following medical advice and retaining their ability to drive.

Greens MP Cate Faehrmann welcomed the proposed reforms, describing them as long overdue given medicinal cannabis has been legal in Australia for a decade.

Premier Chris Minns said the government was attempting to balance patient needs with community safety.

To qualify, drivers would need to register with Transport for NSW, provide evidence of a valid medicinal cannabis prescription and complete an online education program focused on cannabis and road safety.

The proposed scheme would apply only to unrestricted licence holders. Learner and provisional drivers, as well as commercial vehicle operators, would remain excluded.

Drivers involved in serious crashes would still be subject to blood and urine testing, and the reforms would be reviewed after their first year of operation.