But a Dunedin shop is selling the product without a licence, apparently legally, as it awaits a decision on an interim licence.
The former Ha'pennys antique shop appears to be able legally to sell synthetic cannabis while the application, by Dunedin businessman Amrik Singh, is under consideration by the Psychoactive Substances Regulatory Authority.
Authority manager Dr Donald Hannah said while an interim licence was being considered, the applicant could sell until a decision was made.
A young salesman in the Princes St synthetic cannabis shop, who did not want to be named, said he had been selling six synthetic cannabis brands for more than two weeks.
A nearby retailer believes the applicant has breached the Act and wants the licence refused.
Scavengers' Paradise owner Jacqui Chilcott said she and other nearby businesses owners had submitted to the authority seeking a licence refusal because Mr Singh did not match all the criteria for an approval.
She doubted Mr Singh had sold synthetic cannabis for 28 days before applying, which was necessary to not be in breach of the Act.
Mr Singh said he had sold synthetic cannabis to two or three people online and therefore met the criteria.
Mrs Chilcott said she hoped the Dunedin City Council would create a policy so synthetic cannabis stores could not operate within 1km of schools, day-care or play premises, such as the nearby Chipmunks Playland.
''We're hoping that will get rid of that shop, but it all depends whether the council has the appetite for it or if they are so pro-business they don't really care what happens.''
Chipmunks Playland team leader Raewyn Napier said she disagreed with the shop being so close to the after-school care centre.
The Salvation Army Dunedin addiction services director Glen McLennan said he asked the ministry to refuse the shop's licence because addiction service clients walked past the shop.
''This is an unacceptable risk for our clients, who come to treatment with us at the most vulnerable time in their using lives,'' Mr McLennan said.
He said that part of town had high numbers of vulnerable people, including many in boarding houses who were ''mental health consumers''.
The services of other health providers would also be compromised by synthetic cannabis outlets.
The authority recently suspended the licence of Dong Zhou to sell synthetic cannabis in Ravensbourne Rd, in Dunedin.
A spokesman for the shop, who did not want to be named, said the licence was suspended after selling synthetic cannabis for seven weeks, because it was operating too close to a dairy.
In its best week, the synthetic cannabis shop made 35 sales so it did not make financial sense to open another shop.
Associate Health Minister Todd McClay said the suspension, and another at Hawera,in Taranaki, revealed the Act was effective in reducing the availability and accessibility of synthetic cannabis.
The action revealed the authority was not ''merely rubber-stamping applications'' and all interim retail licensees underwent a police vetting process to ensure the information provided was true and accurate.
