Legalised cannabis market could grow NZ's coffers by $240m a year in tax

Jared Nicoll

STUFF

The price of cannabis, understood to be roughly $20 per gram, would be only slightly higher in a potential legal market.

Reforming New Zealand's "punitive" drug laws could benefit the country economically by $450 million a year.

A report commissioned by the NZ Drug Foundation – prepared by economist Shamubeel Eaqub from Sense Partners – said the country could earn $240m in tax from legal cannabis sales alone.

Decriminalising drugs, creating a legal cannabis market, and investing more in healthcare would, all up, benefit the country by about $450 million a year, the report said.

ROB KITCHIN/STUFF

Ross Bell, Executive Director of the NZ Drug Foundation, Shamubeel Eaqub (CFA), Sense Partners and Kathryn Leafe, Executive Director, NZ Needle Exchange Programme hold a press conference for drug reform in NZ.

A cost-benefit analysis found that doubling the $150m spent on treatment and education would create a net social benefit of at least $225m a year.

Meanwhile, regulating the cannabis market could create somewhere between $185m to $240m in tax revenue, along with saving the justice sector between $6m to $13m.

STUFF

The drug foundation's executive director, Ross Bell, said the Government had handed control of the cannabis market to the black market "so we're saying, regulate that market".

Replacing the Misuse of Drugs Act 1975 to decriminalise drugs in favour of a health-based drug law would bring a benefit of $34m to $83m.

The NZ Drug Foundation's executive director, Ross Bell, said the Government had handed control of the cannabis market to the black market.

"So we're saying, regulate that market," he said. "Take it out of the hands of the hands of the criminal black market and put tight regulations in place."

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Economist Shamubeel Eaqub has prepared a report showing the economic benefits of reforming New Zealand's drug laws.

Regulations could be similar to those imposed on alcohol and tobacco sales, such as age restrictions and quality controls – drawing from the experience of the United States and Canada.

The report comes at a critical time as the Government conducts reviews into mental health and addiction services, while also preparing for a referendum on legalising the personal use of cannabis before the next election.

Eaqub believed taking a health-based approach to dealing with drugs rather than a criminal one was the right thing to do.

"Police are not locking up people for use and possession like they used to," he said.

"Implicitly we understand that locking people up and a punitive approach to drugs isn't good."

The problem now is there is not enough being budgeted for their medical treatment.

On average, the cost of providing a user with health treatment is half that of putting them through the justice system, Eaqub said.

Tax from a legal market could be used to pay for health services, which also stopped it from going into the black market.

The price of cannabis – understood to be roughly $20 per gram – would be only slightly higher in a legal market.

"We'd make sure that prices are just a little bit higher than they are now, over time, so that we don't encourage more users," Eaqub said.

"But if you bring prices down it's very likely you would see an increase in consumption and that would defeat part of what we're trying to do."

Overseas experiences had shown convenience and legal accessibility meant most people "would prefer to just go to the shop and buy the stuff than go to a dodgy fellow to buy a tinny"