NZ Herald 8 September 2020
A legal cannabis market for recreational use could generate $675 million a year for the Government to spend on reducing cannabis-related harm, new economic modelling shows.
Two reports by Business and Economic Research Ltd (Berl) also say that legalisation would see an initial spike in cannabis use, accompanied by more cannabis-related hospitalisations.
But this would recede in the longer term and, with excise tax revenue put towards effective health interventions, cannabis users would have improved health outcomes while the justice system would save $11.4 million a year.
Berl’s modelling was done for the Ministry of Justice in the lead-up to next month’s referendum on legalising cannabis for personal use.
It was going to be published after the referendum in case it might unduly influence voters, but it has been released today following Official Information Act requests.
Justice Minister Andrew Little has so far been coy about the value of any levy on legal cannabis products, which would be ring-fenced for health services such as therapy or addition treatment.
But Berl estimated the level of excise tax based on the current price of cannabis and three different levels of potency of THC – the psychoactive ingredient in cannabis.
It estimated the tax would net the Government $640 million per year.
Adding the revenue from licensing fees minus the cost of administering the scheme, Berl says there would be $675m a year that could be used for health services.
READ MORE: https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12363248
Legalised cannabis would create thousands of jobs, earn around $1 billion per year in taxes – report
TVNZ One News 9 September 2020
If cannabis is legalised after this year’s referendum, it could see up to 5000 new jobs created in the sector and bring in more than $1 billion in taxes, according to two newly released reports.
The Business and Economic Research Limited (BERL) report was commissioned by the Ministry of Justice and was proactively released to media today.
It recommends a limit of 110 to 120 tonnes of dried cannabis produced per annum – a significant increase on its current modelling, which estimates around 74 tonnes of cannabis is currently consumed each year in New Zealand.
“Using the suggested minimum prices of $20 for low THC products, $30 for medium THC products, and $40 for high THC products, it is likely that a total of $335 million in GST will be raised by the sale of 110 tonnes of recreational cannabis,” the report says.
On top of that GST income, it also forecasts around $640 million from excise tax and $440 million from a specific harm reduction levy.
In total, it would mean more than $1 billion a year coming in from taxes on legalised cannabis.
READ MORE: https://www.tvnz.co.nz/one-news/new-zealand/legalised-cannabis-would-create-thousands-jobs-earn-around-1-billion-per-year-in-taxes-report