The penalty for possessing a small amount of a psychoactive substance was a $500 fine. Possessing a large amount with intention to supply was punishable by up to two years' jail or a fine of $500,000.
Retailers and manufacturers would not be compensated for their losses.
The emergency law change would stop tests on animals being used to seek approval for psychoactive products.
Mr Ryall clarified that the psychoactives testing regime would accept overseas animal drug trials which proved that a product was unsafe.
"No one will be doing animal testing to support an application here because it will not be able to be used for consideration."
Labour associate health spokesman Iain Lees-Galloway said Labour planned to support the bill.
But he blamed National for "making a hash" of implementing the new rules for psychoactives. National had last year opposed a Green Party proposal to ban animal testing, but later admitted that concerns about animal harm was holding up the much-needed testing regime. Its ban on animal testing was belated, Mr Lees-Galloway said.
The Green Party planned to abstain on the bill because it supported a ban on animal drug trials but believed the blanket ban on synthetics would create an untested black market.
Act Party leader John Banks, the only MP to oppose the original bill, accused his colleagues of acting like "fruit loops".
"The process we're going through this afternoon is a time-honoured process of dead rat-swallowing. We got it wrong."
Mr Ryall said the 41 products which had temporary waivers were not linked to adverse reactions when they were approved last year.
But since the bill passed in August, health authorities had reported an increase in serious reactions including vomiting, seizures and psychotic episodes.
The Government already had power to remove specific products from the market. But because it was difficult to link cases to individual products, all of them were being removed until a robust testing regime was in place.
*The Green Party tabled an amendment to rule out animal testing in the Psychoactive Substances Act, not the Labour Party as reported in an article yesterday.